Patent Docs

Bio-Rad Laboratories, Inc. v. International Trade Comm. (Fed. Cir. 2021)

By Kevin E. Noonan --

Last week, the Federal Circuit affirmed imposition of an exclusion order under 19 U.S.C. § 1337 (Section 337 of the Tariff Act of 1930) by the Federal Trade Commission against 10X Genomyx (an intervenor in this appeal) over importation of patented microfluidic chips, in Bio-Rad Laboratories, Inc. v. International Trade Commission.  (10X Genomyx obtained a similar exclusion order against Bio-Rad in a case appealed last month; see "Bio-Rad Laboratories, Inc. v. Int'l. Trade Comm".)

In this action, Bio-Rad filed a complaint against 10X Genomyx alleging that importation of certain microfluidics chips infringed claims of U.S. Patent Nos. 9,500,664, 9,636,682, and 9,649,635.  Representative claims set forth in the opinion are these:

The '664 patent:

1.  A system for forming a plurality of sample-containing droplets suspended in a back- ground fluid, comprising:
    a substrate having a bottom surface and a top surface;
    a sample well, a background fluid well, and a droplet well each having an upper region protruding from the top surface of the substrate;
    a network of channels formed in the bottom sur- face of the substrate and fluidically interconnecting the sample well, the background fluid well, and the droplet well; and
    a droplet generation region defined by the network of channels and configured to generate sample-containing droplets suspended in the background fluid;
    wherein the droplet generation region is de- fined by the intersection of a first channel, a second channel, and a third channel;
    wherein the first channel is configured to transport sample-containing fluid from the sample well to the droplet generation region, the second channel is configured to transport background fluid from the background fluid well to the droplet generation region, and the third channel is configured to transport sample-containing droplets from the droplet generation region to the droplet well; and
    wherein the substrate and the upper region of each well are injection molded as a single piece.

The '682 patent:

14.  A system for generating droplets, comprising:
    a device including a row of sample wells each configured to receive sample-containing fluid, a row of continuous-phase wells each configured to receive continuous-phase fluid, and a row of droplet wells, the device also including a corresponding channel network for each sample well, the channel network including a droplet-generation region and fluidically connecting the sample well to one of the continuous-phase wells and one of the droplet wells;
    a holder for the device;
    a gasket configured to be attached directly to the holder, such that the gasket extends over each sample well, each continuous-phase well, and each droplet well; and
    an instrument configured to
        (a) receive an assembly including the device, the holder, and the gasket,
        (b) engage the gasket with a manifold, and
        (c) apply positive pressure and/or negative pressure to the device via the manifold, such that sample-containing fluid flows from each sample well to the corresponding droplet-generation region, continuous-phase fluid flows from each continuous-phase well to the corresponding droplet-generation region, and sample-containing droplets flow from each droplet-generation region to the corresponding droplet well.

The '635 patent:

1.  A system to form and concentrate an emulsion, comprising:
    a device including a sample well configured to receive sample-containing fluid, a continuous-phase well configured to receive continuous-phase fluid, and a droplet well, the device also including a channel network having a first channel, a second channel, and third channel that meet one another in a droplet-generation region; and
    an instrument configured to operatively receive the device and to create
        (a)    a first pressure differential to drive sample- containing fluid from the sample well to the droplet-generation region via the first channel, continuous-phase fluid from the continuous-phase well to the droplet-generation region via the second channel, and sample-containing droplets from the droplet-generation region to the droplet well via the third channel, such that the droplet well collects an emulsion including sample- containing droplets disposed in continuous-phase fluid, and
        (b)    a second pressure differential to decrease a volume fraction of continuous-phase fluid in the emulsion, after the emulsion has been collected in the droplet well, by selectively driving continuous-phase fluid, relative to sample-containing droplets, from the droplet, from the droplet well via the third.

(wherein the text in italics and boldface is the claim term at issue).

The technology at issue was related to microfluidics chips for performing bioanalytic assays using small amounts of sample contained in microdroplets, defined in the opinion as "a contiguous amount of one type of fluid that is encapsulated within a different fluid," wherein "the inner fluid is aqueous or water-based, while the outer fluid is oil" in typical embodiments.  Generally, the sample is contained in the aqueous inner fluid.  An advantage of this arrangement was that each sample could be subject to chemical reactions in its own droplet (a "mini-test tube" according to the '664 patent) and that a larger number of chemical reactions can be performed in parallel.  Such reactions are performed on microchips as claimed in the patents-at-issue (the opinion noting that such microchips were known in the art at the priority dates of these patents).

As set forth in the opinion, the named inventors of the asserted patents previously worked for a company (QuantaLife, Inc.) that was thereafter acquired by Bio-Rad.  These inventors had agreed in their employment contracts with QuantaLife to promptly assign to the company their rights to the provisional applications that matured into the three patents-in-suit, which they assigned to Bio-Rad after the acquisition.  These inventors later left Bio-Rad and formed 10X Genomics, where they developed the technology asserted by Bio-Rad to infringe the patents-in-suit.  Two embodiments of these chips were at issue in this case:

• GEM Chips, having "input wells for three different materials—gel beads, sample, and oil—and one output well to collect droplets.  The microfluidic channels on the GEM Chips intersect each other such that the gel bead and sample fluid are mixed at a first intersection, the resulting mixture enters into a microfluidic channel referred to as a 'singulation channel,' and the mixture then mixes with the oil at a second intersection."

• Chip GB, which 10X Genomyx utilizes "to generate droplets that are used to make the gel beads that are packaged with the GEM Chips and sold to customers.  The Chip GB contains one input well that holds an aqueous monomer solution, a second input well that holds oil, and channels from each of the wells that intersect each other to allow for the formation of droplets that are collected in a droplet well.  Over time, the monomers within each droplet polymerize, and the droplet becomes a gel bead."

Responsive to Bio-Rad's complaint, an Administrative Law Judge (ALJ) granted summary determination that the doctrine of assignor estoppel precluded 10X Genomyx from challenging the validity of the asserted patents.  The ALJ then construed the claims with regard to the term "droplet-generation region" to mean "the intersection of (1) a sample-containing dispersed phase fluid inlet channel, (2) a continuous phase fluid inlet channel, and (3) a droplet outlet channel."  The parties agreed that the term "sample" meant "a compound, composition, and/or mixture of interest, from any suitable source(s)."

Under this construction, the ALJ determined that 10X Genomyx's GEM Chips infringed the three patents, but that while the GB Chips infringed the claims of the '682 and '635 patents they did not infringe asserted claims 1 and 14 of the '664 patent because the monomer solution used with those chips was not a "sample" under the agreed-upon construction.  The Commission reviewed the ALJ's findings and adopted them, that the GEM chips infringed the three asserted patents (either literal, induced, or contributory infringement) but that the GB chips did not literally infringe the '644 patent.  The parties appealed each of the adverse determinations against them.

The Federal Circuit affirmed, in an opinion by Judge Lourie, joined by Judges Newman and Dyk.  With regard to Bio-Rad's appeal, the panel addressed two assertions that the ALJ erred.  The first was that because the GB chips did not involve a sample they did not have structures corresponding to "a 'sample well,' a sample channel, sample-containing droplets, or the claimed 'droplet generation region.'"  Second, Bio-Rad argued that due to the structural nature of the elements of the claims (wells and channels), infringement could not depend on what was in those wells and channels.  The "sample" limitation was assessed based on the parties' agreed-upon definition (which was taken from the '664 specification), and the Federal Circuit found no error in the ALJ relying on witness testimony that what was encapsulated in 10X Genomyx's GB Chip was not a sample under the agreed-upon definition but rather was "an input for a reagent production process" (emphasis in opinion).  This determination was also consistent with distinctions made in the '664 specification regarding the differences between a sample ("something that the customer cares about and wants to analyze") and a reagent ("which 'are of no interest'").  And this interpretation was also consistent with exemplified samples ("blood and plasma, and research samples such as culturued [sic] cells or bacteria") and reagents, defined as ""a compount [sic], set of compounds, and/or composition that is combined with a sample in order to perform a particular test(s) on the sample")(emphasis in opinion).  Bio-Rad's challenge was on these definitions, which they argued imported unsupported additional limitations into the claim term and were based on faulty conclusions (such as the monomer being "of no interest" under circumstances where "10X care-fully designed the monomer solution with particular concentrations of ingredients to serve as a gel bead precursor solution").  The Court agreed with the Commission and 10X Genomyx that Bio-Rad's arguments in this regard were directed to the Commission's factual determinations, and that under the Administrative Procedures Act the Commission's factual determinations were entitled to deference and "substantial evidence" review (which Bio-Rad did not satisfactorily challenge).  In this regard, the opinion states that "[t]he compelling factor here is the distinction between 'samples' and 'reagents'" as set forth (and relied upon by the Commission) in the '644 patent specification.  And, in particular, the panel did not find that consideration of the term "of interest" in construing the meaning of the claims and applying that construction to 10X Genomyx's GB chips imported any untoward subjectivity to the analysis.

Turning to Bio-Rad's second argument, the Federal Circuit considered this argument to "fail[]" for several substantive and procedural reasons.  The opinion states that it is "not clear" that Bio-Rad made this argument before the Commission, and accordingly should be precluded from presenting it on appeal in the first instance, citing Interactive Gift Express, Inc. v. CompuServe Inc., 256 F.3d 1323, 1346 (Fed. Cir. 2001).  Even if this procedural hurdle had been overcome, the panel asserted Bio-Rad would not prevail because its argument rested on "rewriting the claims in an oversimplified form and removing all limitations that differentiate the recited structures from each other."  The opinion illustrates this defect in Bio-Rad's argument by comparing the description of what is claimed in their brief with the actual claims, saying that the former "is not remotely close to what the claim says" it is.  "Inventors are masters of their claims, and the words they use to describe and claim their invention are decisive and binding," said the Court, and in the panel's view the '664 inventors did not claim their invention as broadly as it would need to have been claimed for Bio-Rad to prevail in its infringement argument here.  It was the inventors' decision "to characterize the wells and channels based on the material contained within them," according to the Court, and this choice cannot be "escaped" by recourse to the principle that "apparatus claims cover what a device is, not what a device does."  See Hewlett-Packard Co. v. Bausch & Lomb, Inc., 909 F.2d 1464, 1468 (Fed. Cir. 1990) (emphasis in original opinion).

10X Genomyx's appeal challenged the Commission's determination that its GEM chips infringed the asserted claims of the three patents-in-suit.  The first of two challenges by 10X Genomyx was based on whether their GEM chips contained the "droplet-generating region" required by the claims.  10X Genomyx's other challenge was directed to whether the evidence supported the Commission's determination regarding indirect infringement.  The challenge regarding whether GEM chips comprised the "droplet-generating region" was on claim construction, where 10X Genomyx asserted this alternative construction of the term:

[T]he intersection of the sample input channel that receives the dispersed phase fluid from the sample well, the oil input channel that receives the continuous-phase or background fluid from the oil well, and the droplet outlet channel that outputs to the droplet well, at which droplets are generated.

Bio-Rad (and the Commission) countered that 10X Genomyx had waived this argument three times:  "first, by failing to propose it in the parties' Joint Claim Construction Chart; second, by failing to seek review by the Commission of the ALJ's waiver finding; and third, by failing in its principal brief to ask this court to overturn the ALJ's waiver finding."  The Court was not convinced, citing instances in the record (including that the construction proposed here was identical to 10X Genomyx's initial construction asserted before the ALJ and maintained before the Commission), and that this consistent assertion of its construction did not constitute waiver that would preclude 10X Genomyx from making its alternative claim construction argument on appeal.

Nevertheless, on the merits, the panel found that the ALJ had correctly construed the term, based on the plain meaning of the claims and the specifications of the patents-in-suit.  The Court held that 10X Genomyx's proposed alternative construction would impermissibly impose requirements on the claimed invention not supported by the intrinsic evidence.  The Court also rejected 10X Genomyx's argument that the ALJ erred by applying the doctrine of assignor estoppel to preclude it from challenging construction based on the prior art, for the simple reason that the Court found evidence in the record that the ALJ had permitted these art-based challenges and that they had failed (which is not the same thing).  The opinion states that the ALJ had properly construed the claims using the intrinsic evidence under Phillips v. AWH Corp., 415 F.3d 1303, 1312–15 (Fed. Cir. 2005) (en banc), and the fact that prior art considerations did not make their way into the Commission's opinion (which the Court termed "less relevant arguments") did not indicate error.

With regard to the Commission's finding of indirect infringement, the Federal Circuit recognized 10X Genomyx's argument to be a factual one (was there enough evidence presented to support the determination?) that is entitled to the substantial evidence standard of review.  The facts at issue revolved around whether 10X Genomyx had knowledge of the patents (on contrast with the priority applications, where such knowledge was not in doubt).  In finding that the Commission's determination was supported by substantial evidence, the opinion states that "10X's various arguments attempt to distract from the reality of this case: named inventors of the asserted patents sold their company and patent rights to Bio-Rad, worked for Bio-Rad for a short time, left Bio-Rad to start a new company, and launched new products that have been determined to infringe the patents they assigned to Bio-Rad."  In addition, the opinion states that 10X Genomyx's arguments "largely attack the ALJ's credibility determinations and weighing of the evidence" (which fails the substantial evidence challenge), particularly with regard to the ALJ's credibility determinations of the witnesses (including the named inventors).  And regarding the existence of non-infringing uses relevant to the Commission's contributory infringement determination, the Court rejected 10X Genomyx's assertion of "hypothetical" systems (which 10X Genomyx asserted were relevant due to the statutory language that an accused product be "suitable" for non-infringing use) as being contrary to precedent (for which the panel sets forth examples including Fujitsu Ltd. v. Netgear Inc., 620 F.3d 1321, 1330–31 (Fed. Cir. 2010), and Golden Blount, Inc. v. Robert H. Peterson Co., 438 F.3d 1354, 1363 (Fed. Cir. 2006).  In sum, because "[i]t is not within [the Court's] purview to reweigh the evidence or to question the ALJ's credibility determinations" the Court affirmed the Commission's infringement determinations against 10X Genomyx.

Over the past six weeks, 10X Genomyx has obtained an exclusion order against Bio-Rad's importation of certain of their microfluidic chips over 10X Genomyx's patents and Bio-Rad in this case has obtained an exclusion order against 10X Genomyx's importation of certain of their microfluidic chips over Bio-Rad's patents.  The relationship and history between the companies argues against settlement, but under these circumstances settlement seems a sensible solution for both parties (depending of course on the relative market share and competitive positions of the parties excluded goods).

Bio-Rad Laboratories, Inc. v. International Trade Comm. (Fed. Cir. 2021)
Panel: Circuit Judges Newman, Lourie, and Dyk
Opinion by Circuit Judge Lourie

Bio-Rad Laboratories, Inc. v. Int'l. Trade Comm. (Fed. Cir. 2021)

By Kevin E. Noonan --

Last month, the Federal Circuit affirmed an exclusion order imposed by the International Trade Commission against Bio-Rad for importing infringing microfluidic systems and components used for gene sequencing or related analyses, in Bio-Rad Laboratories, Inc. v. Int'l. Trade Comm.

The ITC's decision followed a complaint by 10X Genomics, an intervenor in this appeal, for infringement of U.S. Patent Nos. 9,689,024, 9,695,468, and 9,856,530.  An ITC Administrative Law Judge found importation of the accused articles infringed claims in each of the asserted patents, that Bio-Rad had not established that the patents were invalid, and that 10X Genomics practiced the claims (and thus satisfied the "domestic industry" requirement of the Tariff Act of 1930, 19 U.S.C. § 1337(a)(2)).  Also, the ALJ rejected Bio-Rad's affirmative defense that it was a co-owner of these patents under terms of a prior employment contract with certain of the inventors.

The following claims are representative for each of the asserted patents:

Claim 1 of the '024 patent:

1.  A method for sample preparation, comprising:
    a) providing a droplet comprising a porous gel bead and a target nucleic acid analyte, wherein said porous gel bead comprises at least 1,000,000 oligonucleotide molecules comprising barcode sequences, wherein said oligonucleotide molecules are releasably attached to said porous gel bead, wherein said barcode sequences are the same sequence for said oligonucleotide molecules;
    b) applying a stimulus to said porous gel bead to release said oligonucleotide molecules from said porous gel bead into said droplet, wherein upon release from said porous gel bead, a given oligonucleotide molecule from said oligonucleotide molecules attaches to said target nucleic acid analyte; and
    c) subjecting said given oligonucleotide molecule attached to said target nucleic acid analyte to nucleic acid amplification to yield a barcoded target nucleic acid analyte.

Claim 1 of the '468 patent:

1.  A method for droplet generation, comprising:
    (a) providing at least 1,000,000 oligonucleotide molecules comprising barcode sequences, wherein said barcode sequences are the same sequence for said at least 1,000,000 oligonucleotide molecules, wherein said at least 1,000,000 oligonucleotide molecules are releasably attached to a bead, wherein said bead is porous;
    (b) combining said at least 1,000,000 oligonucleotide molecules and a sample comprising a nucleic acid analyte each in an aqueous phase at a first junction of two or more channels of a microfluidic device to form an aqueous mixture comprising said at least 1,000,000 oligonucleotide molecules attached to said bead and said sample; and
    (c) generating a droplet comprising said at least 1,000,000[ ]oligonucleotide molecules attached to said bead and said sample comprising said nucleic acid analyte by contacting said aqueous mixture with an immiscible continuous phase at a second junction of two or more channels of said microfluidic device.

Claim 1 of the '530 patent:

1.  A method for nucleic acid preparation or analysis, comprising:
    (a) providing:
        (i) at least 1,000 gel beads;
        (ii) releasably attached to each of said at least 1,000 gel beads, at least 1,000 barcode molecules comprising identical barcode sequences that are distinct from barcode sequences of at least 1,000 barcode molecules releasably attached to any other gel bead of said at least 1,000 gel beads; and
        (iii) a plurality of cells each comprising a plurality of polynucleotide molecules;
    (b) generating a plurality of droplets, wherein at least 1,000 droplets of said plurality of droplets each comprise:
        (i) a single gel bead from said at least 1,000 gel beads; and
        (ii) a single cell from said plurality of cells; and
    (c) in each of said at least 1,000 droplets, using said plurality of polynucleotide molecules from said single cell and barcode molecules of said at least 1,000 barcode molecules from said single gel bead to generate a plurality of barcoded polynucleotide molecules,
    wherein said barcode molecules become detached from said gel bead.

The factual history as set forth in the Federal Circuit's opinion is as follows.  Two of the named inventors of the asserted patents previously worked for a company (QuantaLife, Inc.) that was thereafter acquired by Bio-Rad.  These inventors had agreed in their employment contracts with QuantaLife to promptly disclose and assign to the company "the full details of any and all ideas, processes, recipes, trademarks and service marks, works, inventions, discoveries, marketing and business ideas, and improvements or enhancements to any of the foregoing ("IP")" that they "conceive[d], develop[ed] or create[d] alone or with the aid of others during the term of Employee's employment with the Company," and assign any such IP to the company (emphasis added).  These inventors signed similar agreements with Bio-Rad after the acquisition.

These inventors then left Bio-Rad in April 2012 and formed 10X Genomics in July 2012, where they developed the technology claimed in the asserted patents.  As set forth in the opinion, the 10X Genomics technology had a "gel bead in emulsion" (GEM) architecture that differed from the more conventional "capsule-in-capsule and capsule-in-droplets architecture."  The relevant features of this technology as claimed included that it "involves 'partitioning nucleic acids, DNA or RNA, in droplets together with gel beads that are used to deliver the barcodes into the droplet,' where the 'barcodes are released from the gel beads using a stimulus.'"  According to the opinion, there was no evidence that the inventors conceived of their technology prior to January 2013.

The basis for 10X Genomics' complaint was that Bio-Rad's products practiced the invention claimed in each asserted patent.  With regard to the '024 patent, the ALJ determined that Bio-Rad's accused methods practiced the step of "applying a stimulus to said porous gel bead to release said oligonucleotide molecules from said porous gel bead" (emphasis in opinion).  Bio-Rad unsuccessfully contended that the stimulus in its method acted on the oligonucleotides themselves rather than the gel bead, but the ALJ held (and the Commission affirmed) that the oligonucleotides were part of the gel bead and thus Bio-Rad's method satisfied this limitation.  For the '468 patent, Bio-Rad argued a distinction over the claim requirement of  "combining said at least 1,000,000 oligonucleotide molecules and a sample comprising a nucleic acid analyte . . . at a first junction of two or more channels of a microfluidic device to form an aqueous mixture."  Bio-Rad argued that the sample and oligonucleotide combination did not form an aqueous mixture at the first junction of the apparatus but were separate until droplets formed thereafter.  The ALJ disagreed based on testimony from 10X Genomics' expert, and the Commission agreed.  Concerning the '530 patent, Bio-Rad argued that its method did not fulfill the ALJ's construction of the claim that the second step (generating at least 1,000 droplets) was complete prior to the third step ("generating a plurality of barcoded polynucleotide molecules").  Bio-Rad supported this argument by the contention that the enzymes that provide the stimulus in its product "begin to form barcoded molecules immediately upon droplet formation" rather than after at least 1,000 droplets are formed.  The ALJ rejected this argument because the evidence showed that in practice the enzyme did not act sufficiently quickly to have "finish[ed] cleaving all barcoded molecules from the gel bead within the droplets before 1,000 droplets are formed."

The ALJ also rejected Bio-Rad's assertions that the 10X Genomics' product did not practice the invention claimed in the '530 patent any more than its own product did, a decision affirmed by the Commission on a slightly different basis, as well as rejecting Bio-Rad's argument that the claims of the '530 patent were indefinite.

Turning to Bio-Rad's affirmative defense that it was a co-owner of the asserted patents, the ALJ rejected the argument because there was no evidence that the invention(s) claimed in these patents had been conceived prior to January 2013 (after the inventors had left Bio-Rad's employ) and "'[n]o provision of any of the applicable contracts governs future inventions' merely because the future inventions 'are based on or developed from work done during employment.'"  In agreeing, the Commission also stated that the "ideas" identified by Bio-Rad purportedly worked on by the inventors during their employment terms were too "generic" to support co-ownership because the lacked the specifics required by the claims (and in particular that their work at Bio-Rad involved "droplet-in-droplet" not "gel-bead" architecture).  Also supporting the Commission's decision was their determination that many of the ideas asserted by Bio-Rad were to be found in Bio-Rad's prior art U.S. Patent No. 9,347,059 that named one of the inventors (showing, according to the Commission, that Bio-Rad had received the "benefit of its bargain" from the employment contract).

The Commission having affirmed the ALJ's decision, this appeal followed.

The Federal Circuit affirmed, in a decision by Judge Taranto joined by Judges Chen and Stoll.  The Federal Circuit held that substantial evidence supported the Commission's decision that Bio-Rad's accused imported articles infringed the asserted claims of the '024 patent.  The opinion notes that the plain meaning of the claim language recites that the oligonucleotides are releasably attached to the porous gel bead, and release is caused by applying a stimulus; Bio-Rad's system satisfies those requirements according to the Court.  The panel rejected Bio-Rad's arguments to the contrary, based on the distinction between the oligonucleotides and the porous gel bead being distinct entities, and differences in how its stimulus differs from what is exemplarily disclosed in the '024 specification.

The Court also rejected Bio-Rad's distinctions between what is claimed in the '468 patent and its accused imported articles based on the details of mixing the nucleic-acid-sample solution and reagent solution.  The opinion states that the evidence Bio-Rad relied upon to make a spatial distinction between where these solutions are mixed and where droplets are formed was "hazy" and that without record evidence supporting Bio-Rad's argument the Court "cannot say that the Commission lacked substantial evidence to find that Bio-Rad infringed the '468 patent."

The opinion also set forth and rejected the arguments Bio-Rad raised against the Commission's determination that its accused imported articles infringed the asserted claims of the '530 patent.  As a threshold matter the opinion states that:

Bio-Rad's argument must fail unless the Commission erred, as a matter of claim construction, in determining that the claim permits some barcode detachment (from the gel of the bead) to occur before 1,000 droplets are formed—as long as the claim-required number of detachments occur after 1,000 droplets have formed.

But Bio-Rad made no objection or argument regarding the Commission's claim construction, and the panel found none.  The claim recites that the second step of claim 1 of the '530 patent be completed before the third step.  But the panel opinion states that "[c]ritically, that conclusion does not mean, and the claim language does not require, that there be no barcode detachment before 1,000 droplets are generated" (which was the basis for Bio-Rad's argument).  The opinion states that the Commission's determination was supported by substantial evidence that "barcode molecules are not released from the gel beads instantaneously and that, instead, the barcoding process merely begins to occur upon droplet formation, with enough barcode detachment still occurring after 1,000 droplets are formed to meet the claim requirement" and, if that was the case, the Commission was correct in finding that "[t]he fact that barcoding of other polynucleotides also happened before 1,000 droplets were generated is irrelevant."

Bio-Rad turned this argument on its head in contending that 10X Genomics' product did not practice the invention claimed in the asserted claims of the '530 patent and thus did not satisfy the domestic industry requirement in the statute for relief from the ITC under Section 1337(a)(2).  But because "[t]he test for satisfying the 'technical prong' of the [domestic] industry requirement is essentially [the] same as that for infringement, i.e., a comparison of domestic products to the asserted claims," Alloc, Inc. v. Int'l Trade Comm'n, 342 F.3d 1361, 1375 (Fed. Cir. 2003), the Federal Circuit also rejected this challenge to the Commission's determination.  According to the opinion, Bio-Rad failed to show the Commission's determination was not supported by substantial evidence, being based on documentary evidence and expert testimony.

Bio-Rad also asserted (and the Federal Circuit rejected) that the claims of the '530 patent are indefinite, which the panel reviewed de novo in the absence of any challenge to the Commission's material findings.  The opinion affirmed the Commission's determination that Bio-Rad had forfeited this defense by raising it for the first time during the Commission's consideration of the ALJ's determination (Bio-Rad did not contest this decision until its Reply brief below).  But in addition, the panel rejected the basis for Bio-Rad's indefiniteness contention, that the Commission had to clarify the ALJ's initial claim construction.  The opinion notes that "[m]odifications are proper and sometimes necessary steps as disputes sharpen during litigation," citing Pfizer, Inc. v. Teva Pharms. USA, Inc., 429 F.3d 1364, 1377 (Fed. Cir. 2005), and that in this case all that occurred before the Commission was "[m]ere amplification of an initial construction to resolve a material dispute about claim meaning," which "provides an even weaker potential basis for a suggestion of indefiniteness."

Finally, the Court turned to Bio-Rad's argument that it is a co-owner of the asserted patents based on an employment contract with some of the inventors.  As the Court understood Bio-Rad's contentions:

First, Bio-Rad asserts, if [inventors] Drs. Hindson and Saxonov, when working at Bio-Rad (or its predecessor QuantaLife), had ideas that contributed to the post-employment inventions at issue, and if those contributions would make them co-inventors (regardless of post-employment contributions to the inventions), then the assignment provisions required assignment of their co-ownership interest to Bio-Rad.  Second, Bio-Rad asserts, Drs. Hindson and Saxonov did in fact have such co-inventorship-qualifying ideas while employed at Bio-Rad (specifically, while working for QuantaLife).

The Court assessed these assertions under California law as matters of contract interpretation; under that law interpretation of a contract is a matter of law subject to de novo review according to the opinion.  The opinion comes directly to the point:  "Bio-Rad has furnished no persuasive basis for disturbing the Commission's conclusion that the assignment provisions do not apply to a signatory's ideas developed during the employment (with Bio-Rad or QuantaLife) solely because the ideas ended up contributing to a post-employment patentable invention in a way that supports co-inventorship of that eventual invention."  Specifically, the panel appreciated that the employment contracts by their terms were limited to intellectual property that arose in the course of employment at the time the inventors were employed by Bio-Rad's predecessor-in-interest, QuantaLife (i.e., "before the termination of employment").  Under these circumstances, the Court noted that "Bio-Rad does not argue, much less demonstrate, that a person's work, just because it might one day turn out to contribute significantly to a later patentable invention and make the person a co-inventor, is itself protectible intellectual property before the patentable invention is made."  For a patent, "the pertinent intellectual property does not exist until at least conception of that invention" the opinion states, citing, inter alia, Burroughs Wellcome Co. v. Barr Labs., Inc., 40 F.3d 1223, 1227–28 (Fed. Cir. 1994).  None of the precedent Bio-Rad advanced in support of its co-ownership argument was to the contrary (and remarkably did not support its argument in the Court's opinion), in particular Bd. of Trustees of the Leland Stanford Junior Univ. v. Roche Molecular Sys., Inc., 583 F.3d 832, 837 (Fed. Cir. 2009).  Finally, the panel understood California law to "recognize[] significant policy constraints on employer agreements that restrain former employees in the practice of their profession, including agreements that require assignment of rights in post-employment inventions" insofar as "[s]uch an agreement might deter a former employee from pursuing future work related to the subject matter and might deter a future employer from hiring that individual to work in the area."  And the panel did not find any reversible error by the Commission in deciding, on the merits, that nothing the inventors had done during the course of their employment had sufficient specificity to support Bio-Rad's claims of an ownership interest in any of the asserted patents.

Bio-Rad Laboratories, Inc. v. Int'l. Trade Comm. (Fed. Cir. 2021)
Panel: Circuit Judges Taranto, Chen, and Stoll
Opinion by Circuit Judge Taranto

Bayer Healthcare LLC v. Baxalta Inc. (Fed. Cir. 2021)

By Kevin E. Noonan --

Last week, the Federal Circuit affirmed a jury verdict against Baxalta Inc., Baxalta US Inc., and Nektar Therapeutics for infringing Bayer Healthcare's patent to human blood clotting factor conjugates in Bayer Healthcare LLC v. Baxalta Inc.

Bayer Healthcare sued Defendants on U.S. Patent No. 9,364,520, alleging willful infringement by Baxalta's product, Adynovate®.  This product is a recombinant human Factor VIII (the blood clotting factor responsible for causing Hemophilia A) having the protein structural domains A1-A2-B-A3-C1-C2, wherein the B portion was specifically modified by addition of polyethylene glycol (PEG).  PEGylation is important because Factor VIII has an 11-hour half-life which requires frequent injections and leads to reduced patient compliance.  The prior art had disclosed "random" modification of Factor VIII with PEG, which had "several drawbacks" due to the multiplicity of PEGylations sites ("158 lysines, the two N-termini, and multiple histidines, serines, threonines, and tyrosines") in the Factor VIII protein, which led to heterogeneity in the species produced, including ones having deleterious effects on Factor VIII activity and ones having a multiplicity of PEG residues conjugated to the protein.

The '520 patent specification disclosed site-specific PEGylation at a site not at an N-terminal amine; claim 1 is representative:

1.  An isolated polypeptide conjugate comprising a functional factor VIII polypeptide and one or more biocompatible polymers, wherein the functional factor VIII polypeptide comprises the amino acid sequence of SEQ ID NO: 4 or an allelic variant thereof and has a B-domain, and further wherein the biocompatible polymer comprises polyalkylene oxide and is covalently attached to the functional factor VIII polypeptide at the B-domain.

(wherein the italicized portions of the claim identify claim language disputed in the litigation).

At trial, the District Court construed the term "isolated polypeptide conjugate" to mean "a polypeptide conjugate where conjugation was not random."  Specifically, the District Court held that during prosecution of the '520 patent, Bayer had disclaimed embodiments having random PEGylation.  Further, the District Court construed the term "at the B-domain" to mean "attachment at the B-domain such that the resulting conjugate retains functional factor VIII activity," rejecting Baxalta's proposed construction that the phrase should be construed to mean "at a site that is not any amine or carboxy site in factor VIII and is in the B-domain."  The District Court granted Defendants' pre-trial motion as a matter of law that there was no willful infringement, and a jury found that Defendants infringed claims 1-3 and 8 of the '520 patent.  The jury found against Defendants' counterclaim of non-enablement, and awarded Bayer $155,190,264 in reasonable royalty damages, based on a 17.78% royalty rate for $872,836,128 in Defendants' profits.  The District Court also denied Defendants' JMOL motions on the issues of infringement, enablement, and damages.  Bayer filed a motion under Federal Rule of Civil Procedure 59(a) for pre-verdict supplemental damages, which the District Court granted and awarded Bayer another $18,324,562.  The District Court also denied Bayer's motion for JMOL on willful infringement.  Both parties appealed.

The Federal Circuit affirmed, in an opinion by Judge Stoll, joined by Judges Newman and Linn.  The opinion first opined on the District Court's claim construction, which (because the District Court had not relied upon extrinsic evidence) was performed de novo, with regard to the interpretation of the terms "at the B-domain" and "random" PEGylation of the B portion of Factor VIII.  The opinion rejected Defendants' argument that the term "at the B-domain" should have been interpreted to exclude amine/lysine PEG conjugation.  The opinion sets forth its claim construction analysis by way of the factors enunciated in Phillips v. AWH Corp., 415 F.3d 1303 (Fed. Cir. 2005) (en banc):  plain meaning of the claim terms, the specification, and the prosecution history.  The Federal Circuit found the plain meaning of the term "'[a]n isolated polypeptide conjugate' in which PEG 'is covalently attached to the functional factor VIII polypeptide at the B-domain'" does not require any particular amino acid residue to be PEGylated, saying that the claim "broadly requires PEGylation at the B-domain as a region."  The panel identified statements in the specification that supported this construction, and while acknowledging that PEGylation at cysteine residues was expressly disclosed, held that this disclosure did not limit the scope of site-specific PEGylation to just cysteine residues.  The Federal Circuit also disagreed with Defendants that the specification disparaged amine/lysine PEG conjugation, expressly based on Indivior Inc. v. Dr. Reddy's Laboratories, S.A., 930 F.3d 1325 (Fed. Cir. 2019); Gaus v. Conair Corp., 363 F.3d 1284 (Fed. Cir. 2004); and SciMed Life Systems, Inc. v. Advanced Cardiovascular Systems, Inc., 242 F.3d 1337 (Fed. Cir. 2001) (although the opinion states that it was a close question).  Rather than disparaging or disclaiming any particular type of conjugation with PEG, the panel held that the '520 patent specification disparaged random PEGylation (which is not the same thing).  Finally, the opinion held that nothing in the prosecution history was to the contrary, specifically in that it did not contain "a clear and unmistakable surrender of claims directed to non-random amine/lysine PEGylation."  While art cited by the USPTO included amine/lysine conjugation sites, taken as a whole and as understood by a person of ordinary skill in the art, the Federal Circuit held the rejection and cited art was directed to random PEGylation.  (And Defendants' citation of statements made in the prosecution of related European Patent Application No. 11153287.4 were unavailing, both on the merits and, in agreement with the District Court, "varying legal and procedural requirements for obtaining patent protection in foreign countries might render consideration of certain types of representations inappropriate for consideration in a claim construction analysis of a United States counterpart.")

With regard to the term "random," the Federal Circuit rejected Defendants' argument that the District Court had erred by not expressly defining the term, thus improperly leaving construction of this term to the jury.  The panel held that the District Court had "resolved the parties' differences" with regard to this term by addressing (and rejecting) Defendants' arguments that "(1) that 'random' conjugation means any conjugation at amines or carboxy sites; and (2) that 'random' conjugation means all heterogenous conjugation."  The Federal Circuit understood the District Court's construction did not exclude any degree of heterogeneity from PEG conjugation but rather that Bayer had disparaged embodiments with "a high degree of heterogeneity" (which was the problem with prior art embodiments of PEGylated Factor VIII preparations that distinguished Bayer's invention).  Reciting the District Court's construction, the opinion states that the District Court found (correctly) that "non-random conjugation neither required that each FVIII protein in a product such as Adynovate® be PEGylated in the same places (homogeneity among conjugates in the product) nor required that every PEG on each FVIII protein be in the B-domain (homogeneity within each conjugate)."  Accordingly, the Federal Circuit held that limiting the term "random" with reference to construction of the term "isolated polypeptide conjugate" to mean "a polypeptide conjugate where conjugation was not random" sufficiently defined the meaning of the word "random" in the claimed context, and that this was consistent with other district court decisions, including denial of Defendants' motion in limine on this issue.

The panel also affirmed as being supported by substantial evidence the jury's infringement decision, and consequently, that the District Court did not err in denying Defendants' motion for JMOL.  The opinion provided a synopsis of the parties' evidence, including differing expert witnesses on infringement, supported by Baxalta's submissions to FDA regarding the specificity with which its Factor VIII product comprised "controlled, targeted chemical addition of 20 [kilodalton] PEG conjugates to this FVIII B-domain" (emphasis in opinion), statements inconsistent with random PEGylation.

Similarly, the Federal Circuit held that there was substantial evidence for the jury's rejection of Defendants' non-enablement defense, particularly with regard to embodiments comprising non-random lysine PEGylation.  According to the opinion, "Bayer presented substantial evidence from which a reasonable juror could find that the specification's disclosure of instructions as to the reaction conditions required to practice the claimed invention using cysteine PEGylation were sufficient to enable not only non-random cysteine PEGylation at the B-domain, but also non-random lysine PEGylation at the B-domain."  Somewhat in contrast to recent, more stringent applications of the Federal Circuit's standards for enablement (see Amgen Inc. v. Sanofi and Idenix Pharmaceuticals LLC v. Gilead Sciences Inc.), this panel held that "the specification need not include a working example of every possible embodiment to enable the full scope of the claims," citing Alcon Rsch. Ltd. v. Barr Labs., Inc., 745 F.3d 1180, 1189–90 (Fed. Cir. 2014), and Amgen Inc. v. Hoechst Marion Roussel, Inc., 314 F.3d 1313, 1336–37 (Fed. Cir. 2003).

Defendants also appealed the jury's damages calculations and the basis thereof.  While agreeing with the District Court in rejecting Bayer's expert's 50-50 split royalty rate, the panel disagreed with several other assertions of error by Defendants.  These included the basis for the 17.78% reasonable royalty rate, which Defendants' argued relied on a "a flawed and speculative methodology—namely, asking the jury to pick a rate between the range of feasible rates presented by [Bayer's expert] as the reasonable rate."  The Federal Circuit held that "[t]he district court properly exercised its discretion in allowing Bayer to ask the jury to select a rate between the range presented," within the confines of a damages expert using "reliable methodology for determining the range of possible hypothetical negotiation royalty rates."  When, as here, a jury's damages award "fell within the range suggested by the patentee's damages expert" the Federal Circuit stated it was supported by substantial evidence, citing Rembrandt Wireless Techs., LP v. Samsung Elecs. Co., 853 F.3d 1370, 1382 (Fed. Cir. 2017), and that the District Court had not erred in permitting the jury to received Bayer's damage expert's testimony.  Defendants had had (and had exercised) the opportunity to cross-examine Bayer's expert on his methodology and damaged calculation, according to the opinion, and "ultimately, the jury evaluated his opinions and adopted a rate within his proposed range."  In the Federal Circuit's opinion there was nothing improper about the jury's damages calculation or award.

Finally, Defendants argued that the District Court had violated their Seventh Amendment rights by awarding pre-judgment damages under Fed R Civ Pro 59.  In doing so, according to the Federal Circuit, the District Court used actual sales data instead of projected amounts and applied the same 17.78% royalty rate on the amount of these actual sales.  "Under these circumstances," said the Federal Circuit, "we are not persuaded that the District Court's award constitutes an impermissible additur or an otherwise 'bald addition of something which in no sense can be said to be included in the verdict,'" citing Dimick v. Schiedt, 293 U.S. 474, 486 (1935) (the remainder of the Court's opinion making it clear that its judgment was limited to the facts in this case).

Regarding Bayer's appeal on the District Court's grant of Defendants' motion for JMOL on willful infringement, the panel held that there was insufficient evidence of the necessary "state of mind" having "a specific intent to infringe at the time of the challenged conduct" to support willfulness, citing Halo Elecs., Inc. v. Pulse Elecs., Inc., 136 S. Ct. 1923, 1933 (2016) ("willful, wanton, malicious, bad-faith, deliberate, consciously wrongful, flagrant, or—indeed—characteristic of a pirate").  The panel affirmed the District Court's decision even though "there was no dispute that Baxalta was 'aware of the '520 patent,'" because "Bayer merely 'assume[d] that [Baxalta] knew Adynovate[®] infringed because it involved pegylation at the B-domain of factor VIII."  The Federal Circuit rendered this opinion even in the face of testimony by Defendants' witnesses "concerning their awareness of the patent application that issued as the '520 patent" and representations to FDA regarding non-random PEGylation in Defendants' Adynovate® product.

Bayer Healthcare LLC v. Baxalta Inc. (Fed. Cir. 2021)
Panel: Circuit Judges Newman, Linn, and Stoll
Opinion by Circuit Judge Stoll

Bracco Diagnostics Inc. v. Maia Pharmaceuticals, Inc. (Fed. Cir. 2020)

By Kevin E. Noonan --

Stipulating to infringement after a contrary claim construction is a conventional stratagem for a losing party to have a final judgment that can be challenged before the Federal Circuit.  The risk of course, is that if the Court finds the district court's construction to be correct, the stipulation precludes appellate challenge of the infringement judgment.  Defendant Maia Pharmaceuticals suffered those consequences recently in Bracco Diagnostics Inc. v. Maia Pharmaceuticals, Inc.

The case arose as ANDA litigation over Maia's generic sincalide product, that Bracco asserted infringed Orange Book-listed U.S. Patent No. 6,803,046 concerning its Kinevac® product.  This product is a synthetic peptide hormone used to stimulate gallbladder contraction, pancreatic secretion, and "accelerate the transit of a barium meal through the small bowel."  The '046 claims encompass drug formulations "purer than prior art formulations, and have fewer degradants and more consistent potency" than prior art forms, achieved according to the specification "through addition of excipients such as buffers, surfactants/solubilizers, and surfactants."  Claim 1 is representative of the asserted claims:

1.  A stabilized, physiologically acceptable formulation of sincalide comprising:
    (a) an effective amount of sincalide,
    (b) at least one stabilizer,
    (c) a surfactant/solubilizer,
    (d) a chelator,
    (e) a bulking agent/tonicity adjuster, and
    (f) a buffer.

[Wherein the italicized limitations were relevant to the District Court's claim construction and this appeal.]

Maia's products contain amino acids in addition to the synthetic peptide hormone, which Bracco contended satisfy the "buffer," "surfactant" and/or "solubilizer" limitations recited in the claims.  The issue thus resolved as whether these claim limitations encompassed amino acids.  One aspect of the District Court's construction was that dependent claims recited Markush groups for these limitations that contained amino acids for each.  Another aspect was that the specification recited particular definitions of these terms that encompassed amino acids within their scope.  These characteristics of the specification formed the basis for the District Court's construction of the terms "buffer," "surfactant," and "solubilizer" to include amino acids (among in each instance many other species).  Following claim construction, Maia stipulated infringement of certain claims and dismissal of all other claims and defenses without prejudice, and the District Court entered judgment against defendant; this appeal followed.

The Federal Circuit affirmed in an opinion by Judge Lourie, joined by Judges Clevenger and Chen.  The issue for the panel was whether the District Court erred in including amino acids within the generically claimed limitations for buffers, solubilizer, and surfactants, concluding that it had not.  (The panel also reviewed and affirmed how the District Court construed "the backslash between surfactant/solubilizer to mean "and" or "or," and erroneously included "may" in its definition of surfactant.)

The Court started, consistent with Phillips v. AWH Corp., 415 F.3d 1303 (Fed. Cir. 2005) (en banc), with the language of the claims.  The opinion notes that the use of Markush language in the dependent claims removes the responsibility (or the option) for construction by the Court, due to the closed nature of this claim form (a cautionary tale with regard to using Markush claims).  With regard to the term "buffer" in the independent claims, the Court rejected Maia's contention that the claim should be construed with regard to its function in the claimed formulation, and that the District Court had improperly imported limitations from the specification into the claims (a perennial problem in claim construction (see "Claim Construction at the Federal Circuit: A District Court Judge's View").  Maia supported this argument, ultimately to no avail, on the grounds that many amino acids have no buffering capacity, and that to the extent an amino acid comprising its sincalide formulation is not a buffer its infringement stipulation should not preclude its ability to litigate infringement (i.e., it should not be construed as an admission).  The Federal Circuit agreed that the District Court's construction was technically in error regarding the difference in various amino acids in buffering capacity, but also agreed with Bracco that the error was harmless.  And with regard to whether the stipulation should be given effect as an admission of infringement, the panel was clear:

The key language of its stipulation reads as follows: "Under the Court's construction of the disputed claim terms of the '046 patent, . . . Maia's 505(b)(2) NDA Product would literally infringe the 36 claims. ". . . That stipulation forecloses the argument for noninfringement.

To rule otherwise, according to the opinion, would be to "reinterpret the [district] court's construction to mean" what Maia now contends it should have meant (which of course the Federal Circuit refused to do).  The panel similarly refused Maia's other arguments (claim inoperability for inoperativeness), and affirmed without recourse to remand, citing SUFI Network Servs., inc. v. United States, 755 F.3d 1305, 1312 (Fed. Cir. 2014), and Shinyei Corp. of Am. v. United States, 524 F.3d 1274, 1284 n.3 (Fed. Cir. 2008).

Maia made substantially the same arguments with regard to the surfactant/solubilizer limitation(s), with the same effect on the Federal Circuit.  Once again, the panel considered the District Court erred in its claim construction, but held that the error was harmless because "inclusion of the list of exemplary surfactant/solubilizer agents, while technically incorrect, is essentially correct in its functional definition." And once again:

When Maia stipulated to infringement under the court's claim construction, it stipulated to infringing every limitation of the claims, not just to having amino acids. Having entered into a stipulation, Maia is bound by it [emphasis in opinion].

Regarding the District Court's consideration of the "/" between surfactant and solubilizer to mean "and" or "or" rather than that surfactants falling within the scope of the claims were also solubilizers, the panel agreed with Bracco's argument that this was an attempt to improperly read a limitation from the specification into the claims.  (To be fair, the patentee's repeated use of "/" in the specification for species having both surfactant and solubilizer properties could just as readily been seen to be construing the claims in light of the specification and how this convention was used by the patentee.)  But to the panel the use of "/" in the specification was "ambiguous" and other claim language could be construed to describe sincalide formulations not to have surfactants at all.

Regarding construction of the term "surfactant," Maia argued error for including "an excipient that may reduce the interfacial tension" (emphasis in opinion), and argued that the District Court should have used the plain and ordinary meaning of the term, wherein the compound "must" reduce interfacial tension.  Maia also cited portions of the specification supporting (in its view) this construction.  The panel expressly rejected Maia's argument that "may" rendered the term ambiguous, saying "'may,' standing alone, presents some ambiguity.  However, the plain and ordinary meaning of "may" within the context of this specification is properly understood as indicating an inherent measure of likelihood or possibility.  It is not used by a person of skill to describe an event that has no likelihood of occurring."  In addition, the Federal Circuit expressly rejected Maia's argument that the specification requires that a surfactant "must" reduce interfacial tension, saying "none of Maia's references indicates that the patentee intended to limit the claim scope in the manner that it asserts" and "[w]e have repeatedly 'cautioned against limiting the claimed invention to preferred embodiments or specific examples in the specification,' where, like here, the patentee has not made a clear disavowal of the claim scope," citing Imaginal Systematic, LLC v. Leggett & Platt, Inc., 805 F.3d 1102, 1109–10 (Fed. Cir. 2015).  Finally, the opinion states that the District Court's construction was supported by extrinsic evidence (expert testimony), which can properly be used to support a construction consistent with the intrinsic evidence.

Bracco Diagnostics Inc. v. Maia Pharmaceuticals, Inc. (Fed. Cir. 2020)
Panel: Circuit Judges Lourie, Clevenger, and Chen
Opinion by Circuit Judge Lourie

Chevron U.S.A. Inc. v. University of Wyoming Research Corp. (Fed. Cir. 2020)

By Kevin E. Noonan --

Interferences were rendered unnecessary with the passage of the Leahy-Smith America Invents Act in 2011, but they linger in disputes between patents and applications claiming priority to applications filed before the change to a "first-inventor-to-file" system.  The Federal Circuit recently upheld the Patent Trial and Appeal Board's priority determination in Chevron U.S.A. Inc. v. University of Wyoming Research Corp. in a decision based on the Board's construction of an undisputedly dispositive term.

U.S. Interference No. 106,064 was declared between the University of Wyoming Research Corp. (over involved U.S. Patent No. 8,367,425 and Chevron U.S.A.'s Application No. 12/883,814).  The Count in the interference (which defines the interfering subject matter) was defined in the alternative as Claim 1 of the '814 application:

1.  A method for determining asphaltene stability in a hydrocarbon-containing material having solvated asphaltenes therein, the method comprising the steps of:
    (a) precipitating an amount of the asphaltenes from a liquid sample of the hydrocarbon-containing material with an alkane mobile phase solvent in a column;
    (b) dissolving a first amount and a second amount of the precipitated asphaltenes by gradually and continuously changing the alkane mobile phase solvent to a final mobile phase solvent having a solubility parameter at least 1 MPa^0.5 higher than the alkane mobile phase solvent;
    (c) monitoring the concentration of eluted fractions from the column;
    (d) creating a solubility profile of the dissolved asphaltenes in the hydrocarbon-containing material; and
    (e) determining one or more asphaltene stability parameters of the hydrocarbon-containing material.

or

Claim 5 of the '425 patent:

5.  A method for determining asphaltene stability in a hydrocarbon-containing material having solvated asphaltenes therein comprising the steps of:
    (a) intentionally precipitating an amount of the asphaltenes from a liquid sample of the hydrocarbon-containing material with an alkane mobile phase solvent in a column that has a substantially chemically inert stationary phase established therein, wherein the substantially chemically inert stationary phase is substantially chemically inert relative to the precipitated asphaltenes;
    (b) dissolving a first amount and a second amount of the precipitated asphaltenes by changing the alkane mobile phase solvent to a final mobile phase solvent having a solubility parameter that is higher than the alkane mobile phase solvent;
    (c) monitoring the concentration of eluted fractions from the column;
    (d) creating a solubility profile of the dissolved asphaltenes in the hydrocarbon-containing material; and
    (e) determining one or more asphaltene stability parameters of the hydrocarbon-containing material;
    wherein said step of dissolving comprises the step of dissolving by gradually and continuously changing the alkane mobile phase solvent to a final mobile phase solvent having a solubility parameter that is at least 1 MPa^0.5 higher than the alkane mobile phase solvent.

Wyoming copied this claim to provoke the interference.  Wyoming was designated as the Junior Party in the interference as declared, the Board recognizing their earliest priority date as September 23, 2011 (the filing date of U.S. Application No. 13/243,782, now U.S. Patent No. 8,273,581) and Chevron as Senior Party, having the benefit priority to U.S. Provisional Application Nos. 61/242,280, filed 14 September 2009 and 61/312,765, filed 11 March 2010).  However, in its Decision on Motions, the Board granted Wyoming benefit of priority to U.S. Provisional Application 60/711,599 (filed Aug. 25, 2005), and U.S. Application No. 11/510,491 (filed Aug. 25, 2006), and declared Wyoming the Senior Party.  Chevron filed a Priority Statement establishing its earliest conception date (supported by evidence of diligence from conception to its earliest filing date) of March 1, 2009.  Accordingly, the Board held that Chevron was unable to establish its date of invention to be earlier than Wyoming's earliest priority date (the '599 application filing date) and entered judgment in favor of Wyoming.  This appeal followed.

The Federal Circuit affirmed, in an opinion by Judge Schall joined by Judge Lourie; Judge Newman filed a dissenting opinion.  The basis of Chevron's appeal was that the Board had erred in determining that Wyoming was entitled to its earliest filing date based on an erroneous claim construction.  Specifically, Chevron contended that the Board had misconstrued the limitation "gradually and continuously changing the alkane mobile phase solvent to a final mobile phase solvent" to mean "the alkane mobile phase solvent is incrementally removed from the column over a period of time by continuously adding a final mobile phase solvent" (for the meaning of "gradually") and "without interruption" for the term "continuously."  Chevron urged that this limitation should be construed to mean "the amount of alkane mobile phase solvent fed into the column is incrementally decreased from 100% to 0% over a period of time without interruption while the amount of final mobile phase solvent fed into the column is incrementally increased from 0% to 100% over the same period of time," as Chevron had argued before the Board.  (Neither party disputed the construction given by the Board to the term "continuously.")  The panel recognized that the appeal concerned that "one, narrow issue" of claim construction, because there was no dispute that "Wyoming's '425 patent and the priority applications have written description support for the limitation under the Board's construction, but that they lack such support under the construction urged by Chevron."  Accordingly if the Board properly construed this term, Chevron was not entitled to priority for the Count.

The Federal Circuit majority (as had the Board) based its decision affirming the Board on express disclosure in the '814 specification regarding the term "gradually":

The term gradually as used herein shall be understood to mean that the alkane mobile phase solvent is incrementally removed from the column over a period of time by continuously adding a final mobile phase solvent having a solubility parameter at least 1 MPa^0.5 higher than the alkane mobile phase solvent to the column.

(And because the Board thus relied on intrinsic evidence, it did not consider the testimony of either of the parties' expert witnesses and the Court's review was de novo.)  On this basis, the Board (giving the limitation its broadest reasonable interpretation) held that the term "gradually and continuously changing" referred to the change of solvents in the column rather than at the inlet of the column (neglecting the physical reality that the introduction of the continuously changing solvent occurs, as it must, at the inlet, then proceeding through the column as chromatography continues).  Chevron for its part argued (before the Board and here) that the '814 specification contained several instances wherein the solvent change was described as occurring at the column inlet.  And Wyoming countered that these citations were directed to disclosure reciting where the solvent was gradually and continuously added not where the solvent was gradually and continuously changed.

The panel majority agreed that the Board had properly construed the dispositive limitation under the broadest reasonable construction standard, particularly in view of the express definition of the term "gradually" in the '814 application specification.  The Court also found reliance to be supported by other disclosure in the specification in adjacent paragraphs.  The majority rejected Chevron's legal argument that the Board decision was contrary to the Federal Circuit's precedent from In re Suitco Surface, Inc., 603 F.3d 1255 (Fed. Cir. 2010), stating that unlike in that case here, the Board's construction was not "unreasonably broad" and was supported by express disclosure.  Because the majority found that the Board's construction was consistent with express disclosure and its own precedent regarding proper use of disclosure from the specification in construction under the broadest reasonable construction standard, the Federal Circuit affirmed the Board's priority determination in Wyoming's favor.

Judge Newman dissented.  In the Judge's view, "[t]he Wyoming specification does not describe and does not support the claims copied from Chevron.  In its chain of applications Wyoming describes and claims a different method."  Thus the proper outcome would have been a determination that there was no interference in fact, particularly because the priority benefit accorded to Wyoming precludes Chevron's disclosure from being prior art to Wyoming's claims.  The Judge expressly disagrees with the majority's lack of consideration of the standard of the Court's "uniform precedent that requires that the interference count is construed in light of the application from which it arose; that is, Haemonetics Corp. v. Baxter Healthcare Corp., 607 F.3d 776, 781 (Fed. Cir. 2010) and Bicon, Inc. v. Straumann Co., 441 F.3d 945, 951 (Fed. Cir. 2006)."  As a consequence, in Judge Newman's view, the majority was able to ignore dispositive differences between the inventions claimed in the parties applications, namely that "Wyoming's method differed [from the claimed Chevron method] in that Wyoming required an abrupt and discontinuous solvent change" yet nevertheless granted priority to Wyoming.  These differences (or the consequences thereof) were for Judge Newman illustrated in each of the parties disclosures:

Wyoming:

Chevron:

And the Board understood these differences:

The underlying facts in this situation are, for the most part, not in dispute.  [Wyoming's] example utilizes abrupt solvent input changes . . . , while [Chevron's] examples use solvent changes that are less so.

Because "[w]hen claims are copied to provoke an interference, the copied claims are [to be] construed in light of the application from which the claims are copies" the Judge opines, citing Agilent Techs., Inc. v. Affymetrix, Inc., 567 F.3d 1366, 1375 (Fed. Cir. 2009).

In addition, in light of these differences, Judge Newman believes that "Wyoming proved neither conception nor reduction to practice of the Count" (which is a function of the parties' priority status regarding Wyoming being declared the Senior Party and thus not having this burden).  But both the law and PTAB rules (specifically 37 C.F.R. § 41.202) contain that requirement which was not complied with here.  Seeing this as threshold issue, Judge Newman would have dissolved the interference and permitted both parties to have patents claiming their distinct inventions.

Chevron U.S.A. Inc. v. University of Wyoming Research Corp. (Fed. Cir. 2020)
Panel: Circuit Judges Newman, Lourie, and Schall
Opinion by Circuit Judge Schall; dissenting opinion by Circuit Judge Newman

Par Pharmaceutical, Inc. v. Hospira, Inc. (Fed. Cir. 2020)

By Kevin E. Noonan --

It has long been understood that claim construction can, and frequently is, dispositive in patent litigation.  This truism was the basis for the Federal Circuit affirming the District Court's decision against a generic drug producer in its recent decision in Par Pharmaceutical, Inc. v. Hospira, Inc.  And the case being decided on whether Hospira's formulation described in its ANDA would constructively infringe Par's patented formulation, the clear error standard of view also had a part to play in the outcome.

These issues arose in ANDA litigation, wherein Plaintiffs asserted U.S. Patent Nos. 9,119,876 and 9,925,657 against Hospira over Par's Adrenalin® product (epinephrine) and methods for administering the drug (by injection).  Hospira asserted non-infringement and invalidity as defenses (the District Court ruled against Hospira on the latter and they were not on appeal).  The Par patents were directed to formulations that overcame deficiencies in prior art epinephrine formulations, principally short shelf life due to three different routes of degradation (oxidation, racemization, and sulfonation).  Claim 1 of the '876 patent is representative:

A composition comprising:
    in the range of about 0.5 to 1.5 mg/mL of epinephrine and/or salts thereof,
    in the range of about 6 to 8 mg/mL of a tonicity regulating agent,
    in the range of about 2.8 to 3.8 mg/mL of a pH raising agent,
    in the range of about 0.1 to 1.1 mg/mL of an antioxidant,
    in the range of about 0.001 to 0.010 mL/mL of a pH lowering agent, and
    in the range of about 0.01 to 0.4 mg/mL of a transition metal complexing agent,
    wherein the antioxidant comprises sodium bisulfite and/or sodium metabisulfite.

(where boldface type is used in the opinion to designate limitations relevant to Hospira's appeal).  After defining these limitations, the opinion set forth the District Court's construction of the word "about" as it was used for each limitation.  Specifically, the parties agreed that this term be given its plain and ordinary meaning, i.e., "approximately"; significantly for the Federal Circuit in this appeal, Hospira did not assert a contrary construction.

The parties proffered expert testimony regarding the three limitations emphasized above.  Par's expert testified that the tonicity range -- 6-8 mg/mL -- could be satisfied for the court's infringement determination by 9 mg/mL sodium chloride (Hospira's concentration, although concentrations as low a 8.55 mg/mL were also used) because it would suffice for the intended purpose, i.e., "maintain[ing] the integrity of living cells following the injection of epinephrine into the bloodstream."  Hospira's expert only disputed his counterpart with regard to whether the skilled artisan would consider 9 mg/mL to fall within the range of "about" 6-8 mg/mL.

For the transition metal complexing limitation, the District Court relied on evidence that citric acid was a known chelating agent, and that the amount of elemental impurities (metals) was represented by Hospira in its ANDA as being within international standards (specifically, the ICH Q3D guidelines).  The correspondence between this standard and the concentration of metal chelating agent recited in the claim was attested by Par's expert to fall within the claimed range.  Hospira's expert again did not contest Par's expert in general but did testify that the upper limit of the ICH Q3D guidelines were an inappropriate standard for the District Court to apply.  Rather, in his view the proper amount should be derived from Hospira's test batches, which he opined would require a much lower amount of citric acid as a chelator.

The parties contested the concentration of the pH lowering agent, Hospira's ANDA specifying citric acid as a buffer (with its sodium citrate salt), which together are considered in the art to be pH raising (whereas it was undisputed that citric acid by itself is a pH lowering agent).  According to Par's expert, subtracting the amount of citric acid in Hospira's formulation left sufficient citric acid to fall within the range of Par's claimed pH lowering agent, "even while those same citric-acid molecules would be part of the buffer system (citric acid combined with sodium citrate) that would serve as a pH raising agent."  (Despite the apparent paradox it is helpful to remember that infringement is a question of fact and the Federal Circuit reviews factual determinations by the District Court in a bench trial for clear error.)  Hospira's expert disagreed with Par's expert, testifying (reasonably, on its face) that the citric acid molecules in the formulation should not be considered as both pH-lowering and pH raising components of the formulation.  Nevertheless, the District Court ruled in Par's favor, that Hospira's formulation would infringe Par's patent claims.  This appeal followed.

The Federal Circuit affirmed, in an opinion by Judge Taranto, joined by Judges Dyk and Stoll.  Hospira addressed on appeal the District Court's determinations for each of the three limitations at issue.  The Federal Circuit in its opinion first affirmed the District Court's finding that Hospira's 9 mg/mL sodium chloride concentration in its formulation fell literally within Par's claim limitation of "about" 6-8 mg/mL.  The panel noted that when the term "about" is used, it "avoids a strict numerical boundary to the specified parameter," citing Cohesive Techs. v. Water Corp., 543 F.3d 1351 (Fed. Cir. 2008), relying on Pall Corp. v. Micron Separations, Inc., 66 F.3d 1211, 1217 (Fed. Cir. 1995).  The extent to which a claimed numerical range can extend outside that range when modified by "about" in a claim is limited to what the skilled worker would "reasonably consider" the claim would encompass according to the opinion, citing Monsanto Tech. LLC v. E.I. DuPont de Nemours & Co., 878 F.3d 1336, 1342 (Fed. Cir. 2018).  In cases like these, where no party argues for a narrower claim construction, the determination is governed by the Cohesive standard.  The elements of this standard include whether the accused infringing formulation differs from the claimed range by a "modest amount" (Conopco, Inc. v. May Dep't Stores Co., 46 F.3d 1556, 1562 (Fed. Cir. 1994)), and how critical the claimed range is to the purpose of the limitation (not the invention) itself.  Although recognizing the contribution of claim construction to a Court's decisions on this question, the Federal Circuit stated that "it is a question of technologic fact whether the accused device meets a reasonable meaning of 'about' in the particular circumstances," citing Modine Manufacturing Co. v. U.S. Int'l Trade Comm'n, 75 F.3d 1545, 1554 (Fed. Cir. 1996).  Here, the panel opined that the District Court had properly applied its precedent as set forth herein, and that its basis for the decision was dependent on expert testimony.  The District Court found Par's expert to be more persuasive than Hospira's, particularly to the extent that it was dependent on "the technological facts, the importance of the purpose of the limitation, and the limitation's noncriticality."  In contrast, the District Court found that Hospira's expert "did not provide a meaningful analysis of the technologic context or the function of the claimed amount of tonicity regulating agent."  On these facts the panel found no clear error.

With regard to the transition metal complexing agent limitation, the Federal Circuit rejected Hospira's argument that the District Court should have focused on its proposed generic formulation rather than on what was set forth in its ANDA.  The panel found that the District Court correctly considered citric acid to be a transition metal complexing agent as recited in the claim, which was consistent with the expert testimony from both parties.  The opinion rejected Hospira's argument that it did not intend citric acid to function as a chelating agent, in light of testimony that citric acid actually does act as a chelating agent.  The standard for finding infringement in ANDA litigation under 35 U.S.C. § 271(e)(2) is what is described in the ANDA (the filing of which is, as the Court noted, the constructive act of infringement), citing Sunovion Pharm., Inc. v. Teva Pharm., USA, Inc., 731 F.3d 1271, 1279 (Fed. Cir. 2013).  And Hospira's reliance on the ICH Q3D standard for its ANDA supported the District Court's finding, not at least because this citation was added to the ANDA after the FDA requested "alternative information" in this regard.  The ANDA not being silent on this question the Federal Circuit held that the District Court had sufficient evidence for finding that Hospira's formulation literally corresponded to this limitation.

Finally, with respect to pH-affecting properties of citric acid and buffers made therefrom, the Federal Circuit affirmed based on Hospira not having preserved a claim-construction argument on this issue.  Moreover, the Federal Circuit understood that the (identical) specifications of the '876 and '657 patents, in the panel's view "at least strongly suggest[ed] the opposite."  Because it had not challenged claim construction on this (or any other) point, the Federal Circuit held that the District Court had not clearly erred in concluding that Hospira's formulation infringed the claims as construed (which, inter alia, depended on the disclosures in the specification), and affirmed.

Par Pharmaceutical, Inc. v. Hospira, Inc. (Fed. Cir. 2020)
Panel: Circuit Judges Dyk, Taranto, and Stoll
Opinion by Circuit Judge Taranto

Baxalta Inc. v. Genentech, Inc. (Fed. Cir. 2020)

By Kevin E. Noonan --

The Federal Circuit recently vacated a District Court decision by Federal Circuit Judge Dyk, sitting by designation, based on erroneous claim construction in Baxalta Inc. v. Genentech, Inc.

The case arose over Genentech's Hemlibra^® (emicizumb-kxwh) product, which Baxalta alleged infringed its U.S. Patent No. 7,033,590.  Baxalta asserted claims 1, 4, 17, and 19; these claims were directed to certain elements of the "blood clotting cascade" for treatment of hemophilia A.  The invention claimed in the '590 patent involved using antibodies or antibody fragments to replace binding of Factor VIII (which is deficient or inhibited in hemophiliacs) to Factor IX, which permits restoration of the cascade (wherein Factor IX activates Factor X) as set forth in the following drawing:

The Federal Circuit found Claims 1, 4, and 19 to be illustrative:

1.  An isolated antibody or antibody fragment thereof that binds Factor IX or Factor IXa and increases the procoagulant activity of Factor IXa.

4.  The antibody or antibody fragment according to claim 1, wherein said antibody or antibody fragment is selected from the group consisting of a monoclonal antibody, a chimeric antibody, a humanized antibody, a single chain antibody, a bispecific antibody, a diabody, and di-, oligo- or multimers thereof.

19.  The antibody or antibody fragment according to claim 4, wherein the antibody is a humanized antibody.

At trial, the parties proposed alternative claim constructions for the terms "antibody" and "antibody fragment."  Baxalta's proposed claim construction defined "antibody" as "[a] molecule having a specific amino acid sequence comprising two heavy chains (H chains) and two light chains (L chains)."  Genentech's proposed construction was that "antibody" should be construed as "[a]n immunoglobulin molecule, having a specific amino acid sequence that only binds to the antigen that induced its synthesis or very similar antigens, consisting of two identical heavy chains (H chains) and two identical light chains (L chains)" (emphasis added).  These differences were relevant because Genentech's Hemlibra® product was a bispecific antibody, i.e., the heavy and/or light chains comprising the antibody were different, thus permitting the two portions of the antibody to recognize and bind to different antigens.  Judge Dyk, sitting by designation, held that the term "antibody," without more, could have different meanings to the skilled worker and both parties' definitions were consistent with these different meanings.  In deciding to adopt Genentech's proposed construction, Judge Dyk held that Baxalta's specification contained a definition of the term that was dispositive:

Antibodies are immunoglobulin molecules having a specific amino acid sequence which only bind to antigens that induce their synthesis (or its immunogen, respectively) or to antigens (or immunogens) which are very similar to the former.  Each immunoglobulin molecule consists of two types of polypeptide chains.  Each molecule consists of large, identical heavy chains (H chains) and two light, also identical chains (L chains).

This definition was inconsistent with the remainder of the '590 specification, that disclosed bispecific antibodies, and also inconsistent with other naturally occurring antibody embodiments, such as IgM and IgA.  Judge Dyk also dismissed the inconsistencies that this construction raised between claim 1 and claims 4 and 19 based in the one instance of express disclosure in the '590 specification.  The District Court also relied on amendments made during prosecution of the '590 patent claims, wherein Baxalta amended claim 1 as filed to replace "antibody derivatives" with "antibody fragments."  In Judge Dyk's view, these amendments amounted to a disclaimer of bispecific antibodies and limited the claims to antibody fragments.

With regard to the District Court's construction of the phrase "antibody fragments."  Baxalta proposed construction of "[a] portion of a molecule having a specific amino acid sequence comprising two heavy chains (H chains) and two light chains (L chains)," whereas Genentech proposed to construe this term to mean "[a] fragment of an antibody which partially or completely lacks the constant region; the term 'antibody fragment' excludes all other forms of antibody derivatives."  Again relying on express language in the specification ("antibody fragments . . . partially or completely lack the constant region" and identifying examples of fragments (Fv, Fab, Fab' [and] F(ab)'2)," Judge Dyk construed the phrase "antibody fragment" to mean "a fragment of an antibody which partially or completely lacks the constant region" and that "the term 'antibody fragment' excludes bispecific antibodies."

Based on these constructions, the parties stipulated that Genentech's Hemlibra® product did not infringe, and after the District Court entered judgment, Baxalta appealed.

The Federal Circuit vacated Judge Dyk's claim construction and final judgment and remanded, in an opinion by Judge Moore joined by Judges Plager and Wallach.  The panel opinion reviewed Judge Dyk's construction de novo because the only evidence relied upon in Judge Dyk's decision was intrinsic evidence and thus the Federal Circuit owed the District Court no deference; see Teva Pharma. USA, Inc. v. Sandoz, Inc., 574 U.S. 318 (2015)).  Under this standard, the Federal Circuit found that Judge Dyk erred in construing the term "antibody."  Relying on the plain language of the claim (the first canon of claim construction under Phillips v. AWH Corp., 415 F.3d 1303 (Fed. Cir. 2005) (en banc); Judge Dyk joined 9 other Federal Circuit judges in this opinion), the Federal Circuit held that "nothing in the plain language of claim 1 limits the term "antibody" to a specific antibody consisting of two identical heavy chains and two identical light chains or an antibody that only binds the antigen that induced its synthesis or very similar antigens."  The panel also opined that the dependent claims "confirm[ed] that [the term] "antibody" is not so limited," inter alia, wherein dependent (and asserted) claim 4 expressly recited a bispecific antibody as a species of antibody or antibody fragment.  Construing a term in an independent claim to exclude expressly recited species in dependent claims is "inconsistent with the plain language of the claims," according to the panel, citing Intellectual Ventures I LLC v. T-Mobile USA, Inc., 902 F.3d 1372, 1378 (Fed. Cir. 2018); and Ortho-McNeil Pharm., Inc. v. Mylan Labs., Inc., 520 F.3d 1358, 1362 (Fed. Cir. 2008).  Genentech argued (at trial and before the Federal Circuit) that the proper outcome was to invalidate any such inconsistent dependent claims, which the panel refused to do based on the plain language of the claims.

Turning to the specification, the panel also rejected the District Court's reliance on specific disclosure set forth above.  While acknowledging that, in isolation, that paragraph could be interpreted as providing a definition, "claim construction requires that we 'consider the specification as a whole, and . . . read all portions of the written description, if possible, in a manner that renders the patent internally consistent,'" citing Budde v. Harley-Davidson, Inc., 250 F.3d 1369, 1379–80 (Fed. Cir. 2001).  Judge Dyk's use of the specification to support his claim construction was also inconsistent with the practice of the Court, inter alia, because this excerpt is devoid of language that renders such "general statements" limiting, as set forth, for example, in Luminara Worldwide, LLC v. Liown Elecs. Co., 814 F.3d 1343, 1353 (Fed. Cir. 2016). Considering the specification as a whole, the panel notes that it contains "specific disclosures regarding bispecific, chimeric, and humanized antibodies and methods of production thereof," all of which rebut the District Court's construction.  The specification also expressly discloses methods for producing humanized or chimeric antibodies which are also inconsistent with Judge Dyk's claim construction.

Finally, the Federal Circuit considered the prosecution history and concluded that it did not support the District Court's claim construction based on prosecution history disclaimer.  According to the panel, the disclaimer perceived by Judge Dyk was not "sufficiently clear and unmistakable" to amount to clear disclaimer, citing 3M Innovative Properties Co. v. Tredegar Corp., 725 F.3d 1315, 1325 (Fed. Cir. 2013). The District Court's construction was also inconsistent with allowance of claim 4, which expressly recites bispecific antibody fragments.

The panel concludes by mandating the construction to be used on remand, wherein "antibody" is construed to mean "an immunoglobulin molecule having a specific amino acid sequence comprising two heavy chains (H chains) and two light chains (L chains)."

Turning to construction of the phrase "antibody fragments," the Federal Circuit held Judge Dyk erred in his construction of this term, and held that on remand the phrase be construed to mean "[a] portion of an immunoglobulin molecule having a specific amino acid sequence comprising two heavy chains (H chains) and two light chains (L chains)."  The Federal Circuit based its finding of error on the District Court's reliance on a portion of the specification that recited:

The term factor IX/IXa activating antibodies and antibody derivatives may also include . . . e.g., "technically modified antibodies" such as synthetic antibodies, chimeric or humanized antibodies, or mixtures thereof, or antibody fragments which partially or completely lack the constant region, e.g. Fv, Fab., Fab' or F(ab) etc.

The error was in confining claims to specific embodiments recited in the specification, about which the opinion states the court "has repeatedly warned against," citing Thorner v. Sony Comput. Entm't Am. LLC, 669 F.3d 1362, 1365 (Fed. Cir. 2012).  The panel also notes that the specification contained language ("may also include," "e.g.," "such as," and "etc.") indicting that the patentee did not intend to provide a limiting definition of the phrase "antibody fragments."

Thus, the Federal Circuit remanded the action back to the District Court, awarding costs to Baxalta.

Baxalta Inc. v. Genentech, Inc. (Fed. Cir. 2020)
Panel: Circuit Judges Moore, Plager, and Wallach
(note: after oral argument, Judge Plager replaced Judge Stoll, who recused)
Opinion by Circuit Judge Moore

Genentech, Inc. v. Iancu (Fed. Cir. 2020)

By Kevin E. Noonan --

The Federal Circuit affirmed the Patent Trial and Appeal Board's (PTAB) claim construction (and inter partes review (IPR) decision invalidating claims for obviousness) in it recent Genentech, Inc. v. Iancu decision, and also had the occasion to review and affirm the Board's procedure-based denial of patent owner Genentech's motion to amend when Petitioner requested the Board to enter adverse judgment on one ground of IPR institution.

The IPR involved U.S. Patent Nos. 7,846,441 (claims 1-14) and U.S. Patent No. 7,892,549 (claims 1–17) and was brought (in separate petitions consolidated after institution) by Hospira, Samsung Bioepsis, Celltrion, and Pfizer.  The patents were directed to methods for treating disorders characterized by overexpression of Her2 (encoded by the erbB2 gene), which include breast cancer, by administering an anti-ErbB2 antibody (such as Herceptin) and a taxoid, in the absence of an anthracycline derivative (in the '441 patent claims) or in the presence of "a further growth-inhibitory agent" or "a further therapeutic agent."  Claim 1 of the '441 patent and claims 1 and 5 of the '549 patent are representative:

The '441 patent:

1.  A method for the treatment of a human patient with a malignant progressing tumor or cancer characterized by overexpression of ErbB2 receptor, comprising administering a combination of an in-tact antibody which binds to epitope 4D5 within the ErbB2 extracellular domain sequence and a taxoid, in the absence of an anthracycline derivative, to the human patient in an amount effective to extend the time to disease progression in said human patient, without increase in overall severe adverse events.

The '549 patent:

1.  A method for the treatment of a human patient with breast cancer that overexpresses ErbB2 receptor, comprising administering a combination of an antibody that binds ErbB2, a taxoid, and a further growth inhibitory agent to the human patient in an amount effective to extend the time to disease progression in the human patient, wherein the antibody binds to epitope 4D5 within the ErbB2 extracellular domain sequence.

5.  A method for the treatment of a human patient with breast cancer characterized by overexpression of ErbB2 receptor, comprising administering an effective amount of a combination of an anti-ErbB2 antibody which binds epitope 4D5 within the ErbB2 extracellular domain sequence, a taxoid, and a further therapeutic agent, to the human patient.

(where the italicized limitations were relevant to the Board's decision).

The Board rendered Final Written Decisions finding all claims in these patents to be obvious.  The Board's decision was based on its construction of the phrases "an amount effective to extend the time to disease progression in the human patient" and "an effective amount" to be in the context of situations where there is no treatment.

The Federal Circuit affirmed, in an opinion by Judge Moore joined by Judges Lourie and Wallach.  The Federal Circuit noted that Genentech did not challenge the Board's obviousness determination, just the claim construction upon which it was based.  The panel reviewed the Board's claim construction de novo, under Teva Pharm. USA, Inc. v. Sandoz, Inc., 135 S. Ct. 831, 841 (2015), and focused on the prosecution history in its analysis, because neither the claim language nor the specification "clearly define[d]" the terms at issue before the Court.  The Examiner rejected the term "extend the time to disease progression" as being indefinite, without the specification providing "a standard for ascertaining the requisite degree," wherein "one of ordinary skill would not be reasonably apprised of the scope of the invention."  The opinion sets forth the "give and take" between the Examiner and applicant on this issue:

The Examiner:

Specifically, it is never set forth what the extension of time to disease progress is relative to, for example, is the extension of time to disease progress relative to untreated patients?  Patients who received antibody or taxoid alone?  Patients who received antibody and an anthracycline?

Applicant's response:

[T]he expressions "extend the time to disease progression" and "response rate" are clear from the specification (see, in particular, page 15, lines 15-17; and pages 42-43) and would be readily under-stood by a skilled oncologist.  Clearly, the combination of an anti-ErbB2 antibody and a taxoid is administered in an amount effective to extend the time to disease progression relative to an untreated patient.

The Board considered Genentech to have made an "express choice" in making this response, and that the Examiner allowed the claims of the '441 patent based on this response.  The Federal Circuit agreed with the Board's apprehension in this regard, saying that Genentech had "provided an unequivocal, direct response to the examiner's inquiry—that the term 'extend the time to disease progression' was compared to an untreated patient."  The construction Genentech advocated before the Board and on appeal was one the Examiner suggested and that Genentech rejected, according to the opinion.

On these facts, the panel found no error in how the Board had construed the claims.  Specifically, the panel held that "[t]he Board's construction of the term 'extend the time to disease progression' as requiring comparison to an untreated patient is consistent with the claims, specifications, and prosecution histories of the '441 and '549 patents."

The Federal Circuit also upheld the Board's decision not to grant Genentech's motion to amend, based on failure to show good cause.  The Board rejected Genentech's argument that it had a statutory right to amend under § 316(d)(1) and based its "good cause" requirement on 37 C.F.R. § 42.121(c).  In addition, because Petitioner had requested an adverse judgment on one of the grounds for institution under 37 C.F.R. § 42.73(b), the Board held (and the Federal Circuit agreed) the issue was mooted.  And the Court responded to Genentech's argument that the rules do not permit "partial" adverse judgment by relying on 37 C.F.R. § 42.5(b), which gives the Board discretion to "waive or suspend a requirement of part[] . . . 42." The Board's use of this discretion was consistent with the Supreme Court's statement in SAS Inst., Inc. v. Iancu, 138 S. Ct. 1348 (2018), that "Congress chose to structure a process in which it's the petitioner, not the Director, who gets to define the contours of the proceeding."  The significance of these procedural issues was that Genentech had submitted a motion to amend in the remaining IPR ground and in the absence of any showing of prejudice (that the opinion states Genentech had not shown) the Board was within its discretion require a showing of good cause, and in its absence, to deny a further motion to amend.  And, on appeal, Genentech was unable to satisfy the stringent requirement of establishing an abuse of discretion by the Board.  ("The Board abuses its discretion if the decision: (1) is clearly unreasonable, arbitrary, or fanciful; (2) is based on an erroneous conclusion of law; (3) rests on clearly erroneous fact findings; or (4) involves a record that contains no evidence on which the Board could rationally base its decision."  Ultratec, Inc. v. CaptionCall, LLC, 872 F.3d 1267, 1271 (Fed. Cir. 2017)).

Genentech, Inc. v. Iancu (Fed. Cir. 2020)
Panel: Circuit Judges Lourie, Moore, and Wallach
Opinion by Circuit Judge Moore

Amgen Inc. v. Amneal Pharmaceuticals LLC (Fed. Cir. 2020)

By Kevin E. Noonan --

Transitional terms in patent law (conventionally, "comprising," "consisting of," and the more arcane "consisting essentially of") have their own provenance and meaning, denoting limitations that are "open" (comprising) or "closed" (consisting).  But how should a court construe instances where these terms seem to be at odds with one another?  The Federal Circuit provided an answer, at least with regard to the interplay between "comprising" and Markush group language ("selected from the group consisting of") in one of its first opinions of the New Year, Amgen Inc. v. Amneal Pharmaceuticals LLC.

The case arose in ANDA litigation over generic versions of Amgen's Sensipar^® formulation for treating "secondary hyperparathyroidism in adult patients with chronic kidney disease who are on dialysis and to treat hypercalcemia in patients with parathyroid cancer and primary and secondary hyperparathyroidism."  Amneal (and its affiliated companies), Piramal Healthcare UK Ltd., and Zydus Pharmaceuticals (and its affiliated companies) each filed an ANDA to market a generic version of the drug, and Amgen brought suit, asserting various claims of U.S. Patent No. 9,375,405 against the three defendants (claims 1, 2-4, 6, 8-12, and 14-18 against Amneal, claim 1-6 and 8-20 against Piramal, and claims 1-4, 6, 8-9, 15-17, and 19 against Zydus).  The parties agreed (for the purposes of the appeal) that claim 1 was representative:

A pharmaceutical composition comprising:
    (a) from about 10% to about 40% by weight of cinacalcet HCl in an amount of from about 20 mg to about 100 mg;
    (b) from about 45% to about 85% by weight of a diluent selected from the group consisting of microcrystalline cellulose, starch, dicalcium phosphate, lactose, sorbitol, mannitol, sucrose, methyl dextrins, and mixtures thereof,
    (c) from about 1% to about 5% by weight of at least one binder selected from the group consisting of povidone, hydroxypropyl methylcellulose, hydroxypropyl cellulose, sodium carboxymethylcellulose, and mixtures thereof; and
    (d) from about 1% to 10% by weight of at least one disintegrant selected from the group consisting of crospovid[o]ne, sodium starch glycolate, croscarmellose sodium, and mixtures thereof,
    wherein the percentage by weight is relative to the total weight of the composition, and wherein the composition is for the treatment of at least one of hyperparathyroidism, hyperphosphonia, hypercalcemia, and elevated calcium phosphorus product.

The District Court bifurcated proceedings and determined infringement first.  The panel opinion states that "[t]he prosecution history is particularly relevant to [this] appeal."  The relevant portions of this history involved introduction of the Markush groups in subparts (b), (c), and (d), which were not recited in the claim as filed.  The applicant introduced this language into subpart (b) and the Examiner (by Examiner's amendment) introduced the language into subparts (c) and (d) as a condition for allowance to overcome rejections over the prior art (to which the applicant acquiesced).  The significance of this history before the District Court related to whether or not the claim elements should be open to the presence of other components in formulations that would be infringing; Amgen contended such infringing formulations could comprise these unrecited components and the District Court disagreed.  According to the opinion, the District Court held that "Amgen ha[d] not overcome the very strong presumption that the Markush groups for the binder and disintegrant elements are closed to unrecited binders and disintegrants," relying on Multilayer Stretch Cling Film Holdings, Inc. v. Berry Plastics Corp., 831 F.3d 1350 (Fed. Cir. 2016).  Under this construction, the District Court found that Amneal did not infringe because its accused formulation contained as a binder Opadry Clear YS-1-7006, a product that contains hydroxypropyl methylcellulose ("HPMC"), polyethylene glycol 400, and polyethylene glycol 8000, which was not recited in subpart (c) (which recited HPMC).

Similarly, the District Court found that Piramal's accused formulation used pregeletinized starch as a binder which the District Court held was not equivalent to povidone, a compound recited in the Markush language recited in subpart (c) of the claim.  That Amgen accepted the Examiner's amendment to obtain allowance of the claim raised prosecution history estoppel that precluded the District Court from considering any purported equivalents to the compounds expressly recited in the claim according to the District Court.

On the other hand, the District Court found that Zydus's accused formulation was infringing under § 271(e)(2) because the function of pregelatinized starch in its formulation was as a diluent, and starch was recited as a diluent in the claim.  Thus, the District Court found Zydus literally infringed the claim.

The Federal Circuit vacated and remanded as to the District Court's decision that Amneal did not infringe based on incorrect claim construction, but affirmed with regard to Piramal's non-infringement under the doctrine of equivalents and Zydus's literal infringement.  The opinion notes that, "as a preliminary matter," the panel needed to consider its jurisdiction over Zydus, because Zydus had pending defenses and counterclaims of invalidity against Amgen and thus the District Court's judgment was not final.  The opinion further noted, however, that Zydus's counsel at oral argument agreed to abandon these defenses should the Federal Circuit affirm the District Court's infringement decision, resolving any jurisdictional concerns.

Regarding the District Court's claim construction, that the presence of the phrase "consisting of" in the Markush language introduced during prosecution prevented Amgen from extending its claim to formulations containing other elements, the Federal Circuit held that the District Court had "read more into Multilayer and Shire [Dev., LLC v. Watson Pharm., Inc., 848 F.3d 981, 984 (Fed. Cir. 2017)] than is properly found there."  Further the opinion states that:

Multilayer and Shire did not hold broadly that, whenever "consisting of" Markush group language is present in a particular claim limitation, even when the limitation follows a general claim transition phrase of "comprising," all components of an accused product that perform the general function of the particular limitation must meet the requirements of that limitation, thus precluding components outside the Markush group.  No such issue was presented in those cases.  Rather, each decision held only that the terms of a particular claim limitation that used "consisting of" Markush group language were restricted to members of the Markush group.

Here, the question before the panel was whether the "binder" and "disintegrant" limitations, written in Markush format, precluded other binders or disintegrants from being in the claimed composition (or an accused infringing embodiment thereof), and the Federal Circuit held that they did not.  The Court's explication of both Multilayer and Shire supported this conclusion (because if not, this panel could not overturn the earlier panels' decision to the contrary).  The panel finds as a "critical[] differen[ce]" here that "[t]here is no language in Amgen's claim indicating that every binder or disintegrant in the claimed formulation must be within the Markush group" because the claim also recites "at least one" of a binder or disintegrant.  Moreover, the opinion states that the remaining limitations in the claims with regard to these components "merely require that those particular binders or disintegrants meet the specified weight-percentage requirements," which the panel asserted "is not inconsistent with the overall composition containing other binders or disintegrants."  Relying on the plain meaning of the claim language (and finding that the specification and prosecution history do not mandate a different conclusion), the Federal Circuit held that the Markush language is not sufficient to support the District Court's construction that the claims do not encompass formulations containing other disintegrants or binders.

The opinion also found it significant that the claims recite "comprising " with regard to the components contained in the claimed formulations.  Having found nothing in the expressly recited limitations that would be "inconsistent with the presence of binders and disintegrants beyond those identified in those limitations" recited in Markush language, the panel further relied on Amgen's use of the term "comprising" to "reinforce[] the conclusion that the language of those limitations is best construed not to foreclose such additional binders and disintegrants."

Accordingly, the panel held that the claims properly construed do not preclude infringement if the accused formulation included an "additional component [that is] functionally similar to the component identified in the Markush group limitation," unless there was another basis, not found here, for such a finding.  The panel found that the District Court's claim construction was incorrect and vacated the determination that Amneal's ANDA formulation did not infringe, remanding to the District Court for further proceedings based on the panel's construction.

The Federal Circuit also vacated the District Court's finding that Amneal's formulation, comprising Opadry, did not satisfy the claim limitation that an infringing formula comprise HPMC, holding that on remand the District Court should determine whether the amount of Opadry in Amneal's formulation comprises 1% to 5% by weight of HPMC.

Regarding Piramal's product, the question before the Court was whether Amgen was precluded by prosecution history estoppel from a finding that this formulation infringed under the doctrine of equivalents.  The District Court found, and the Federal Circuit affirmed, that Amgen had narrowed the claims for "reasons related to patentability" by accepting the Examiner's amendment that inserted Markush language regarding the binder and disintegrant limitations.  Thus, Amgen was estopped from asserting that the Piramal formulation's pregelatinized starch was an equivalent to the expressly recited povidone in its claims (despite a paper submitted on the record during prosecution after the Examiner issued a Notice of Allowance that "[t]hese amendments have not been made in response to a prior art rejection but rather to place the claims in proper format and to better define the claimed subject matter, including equivalents").  And the panel also found unavailing Amgen's argument that these amendments were tangential to patentability because they were made to avoid the prior art.

Finally, with regard to Zydus's product, the Federal Circuit affirmed the District Court's finding that its product would infringe Amgen's claims.  In this case, Zydus's product comprised starch as a diluent, a component expressly recited amongst the Markush group of diluents in Amgen's claims.  The panel did not find credible Amgen's expert testimony (proffered with regard to Piramal's product and asserted by Zydus against Amgen's infringement contentions) that starch was a binder and not a diluent (on the ground that the expert proffered inconsistent testimony, changing it somewhat three times).  The panel held that the District Court did not err in it infringement finding and affirmed that Zydus's ANDA formulation literally infringed Amgen's asserted claims.

Amgen Inc. v. Amneal Pharmaceuticals LLC (Fed. Cir. 2020)
Panel: Circuit Judges Newman, Lourie, and Taranto
Opinion by Circuit Judge Lourie

Allergan Sales, LLC v. Sandoz, Inc. (Fed. Cir. 2019)

By Kevin E. Noonan --

Late last month, the Federal Circuit affirmed a District Court grant of a preliminary injunction based on claim construction involving the effect of two "wherein" clauses in Allergan Sales, LLC v. Sandoz, Inc.

The litigation involved Allegan's U.S. Patent Nos. 9,770,453, 9,907,801, and 9,907,802, which are directed to the ophthalmic drug Combigan®.  As explained in the opinion, the claimed invention is "topical ophthalmic use of brimonidine in combination with timolol . . . for treatment of glaucoma or ocular hypertension . . . preferably formulated as 0.01 to 0.5 percent by weight brimonidine and 0.1 to 1.0 percent by weight timolol solution in water at a pH of 4.5 to 8.0, e.g. about 6.9," where the formulation described in the claims is Combigan® and generic versions of it.  Claim 1 of the '453 patent is representative:

A method of treating a patient with glaucoma or ocular hypertension comprising topically administering twice daily to an affected eye a single composition comprising 0.2% w/v brimonidine tartrate and 0.68% w/v timolol maleate, wherein the method is as effective as the administration of 0.2% w/v brimonidine tartrate monotherapy three times per day and wherein the method reduces the incidence of one o[r] more adverse events selected from the group consisting of conjunctival hyperemia, oral dryness, eye pruritus, allergic conjunctivitis, foreign body sensation, conjunctival folliculosis, and somnolence when compared to the administration of 0.2% w/v brimonidine tartrate monotherapy three times daily.

At issue were the two "wherein" clauses italicized in the claim.  According to the Federal Circuit, these clauses found support in Example II of the common specification between these related patents.

The District Court construed each of the wherein clauses as being limiting, i.e., that they were "material to patentability and express the inventive aspect of the claimed invention."  This aspect was the ability of Combigan® to reduce frequency of administration from three times (TID) to twice (BID) per day without a reduction in efficacy and with a decrease in adverse side effects.  Sandoz argued that these clauses were merely a statement of intended results and were not so limiting, inter alia, because the only affirmative steps recited in the claim were to administer the drug formulation.  Under the District Court's construction, the Court held that Allergan had shown a reasonable likelihood of success in showing infringement by Sandoz' generic product, and granted the injunction.  This appeal followed.

The Federal Circuit affirmed in an opinion by Judge Wallach, joined by Chief Judge Prost and Judge Newman; the Chief Judge also wrote a concurring opinion.  Regarding claim construction, the panel reviewed the plain meaning of the claim language, the specification, and the prosecution history; because the District Court did not consider extrinsic evidence their review was de novo.  While the opinion notes "some overlap" between the language of the wherein clauses and the results set forth in the specification of administering the formulation, the panel opined that proper claim construction requires the claim language to be considered in view of the specification as a whole, citing Sinorgchem Co., Shandong v. Int'l Trade Comm'n, 511 F.3d 1132, 1145 (Fed. Cir. 2007), and Trs. of Columbia Univ. v. Symantec Corp., 811 F.3d 1359, 1363 (Fed. Cir. 2016).  The specification describes experimental comparative results of the formulation administered according to the asserted claims on the patents-in-suit and the prior art, demonstrating the disclosed formulation to be "superior."   In the Court's view, "the specification demonstrates that Allergan believed the increased efficacy and safety of the claimed methods to be material to patentability."  The panel found evidence of similar reliance on these superior properties in the prosecution history, the opinion citing specific passages where patentee argued that the claims were patentably distinct from the prior art based on the properties recited in the wherein clauses.  Finally, the opinion states that the Examiner relied on the distinctions found in the wherein clauses to find the claims "novel and non-obvious over the prior art."  Accordingly, the Federal Circuit affirmed the District Court's claim construction and the grant of summary judgment, explaining in a footnote that the parties agreed the correctness of that decision would "stand or fall" on the claim construction issue.

The Chief Judge wrote separately in concurrence because while agreeing with the panel decision her reasoning regarding the limiting nature of the "wherein" clauses took a different logical path.  She characterized the posture of the case as being "unusual," due to the reliance by all on the claim construction issue.  The Chief Judge found no fault with the panel's application of the claim construction rubrics established by case law that she says constitute "a well-established set of legal standards governing claim construction," and also stating that "the majority has already ably articulated those standards in detail."  To this able articulation, the Chief Judge added "one narrow but crucial point" that bears consideration in her view.  And that is that the plain meaning of the language of the claims, which is mentioned almost summarily in the main opinion, "on its face confirms that these clauses give meaning and purpose to the other manipulative steps of claim 1."  The Chief Judge then makes her case that the claim, written in "open" claim language ("comprising") has no basis for limiting the combination of components, expressly recited or encompassed by "comprising," with any language other than the "wherein" clauses:

Without the "wherein" clauses, the only other limitation guiding the physician is that the drug is administered "twice" per day.  . . .  Sandoz provides no basis for us to conclude with any certainty that the safety and efficacy requirements of the "wherein" clauses would always result from two doses of (1) any formulation of the combination at (2) any interval in a 24-hour period.

The Chief Judge used these circumstances to conclude that in these claims the "wherein" clauses bear the burden of limiting the formulations and administration of those formulations to those that satisfy the limitations recited in the "wherein" clauses (which is an operable definition of what a claim limitation does).  She also found that these clauses each recite with specificity and particularity what is required to satisfy them, in contrast with wherein clauses in other contexts that operate (as Sandoz unsuccessfully argued here) merely to recite an intended result.  And as in the main opinion, the Chief Judge found these conclusions are supported by both the specification and the prosecution history.

The Chief Judge ends her concurring opinion with a discussion of the role of claim language in the claim construction exercise:

As it is, claim construction can be difficult.  For instance, litigants often encounter uncertainty over whether a claim's preamble is limiting or not.  I see no reason to inject further uncertainty into the notice provided by the body of a claim.  Given the specificity, clarity, and material limits the "wherein" clauses add to the scope of claim 1 on their face, Sandoz's position deserves rigorous scrutiny from the start.  We should not begin with the presumption that text in the body of the claim may be meaningless and can only be saved by clear statements in the specification or prosecution history.

For Chief Judge Prost, the name of the game is the language of the claim, and resort to the specification and prosecution history is only taken to ensure that the claim language has been properly interpreted.

Allergan Sales, LLC v. Sandoz, Inc. (Fed. Cir. 2019)
Panel: Chief Judge Prost and Circuit Judges Newman and Wallach
Opinion by Circuit Judge Wallach; concurring opinion by Chief Judge Prost

iNO Therapeutics LLC v. Praxair Distribution Inc. (Fed. Cir. 2019)

By Kevin E. Noonan --

Albert Einstein once famously (albeit perhaps apocryphally) said that "[c]ompound interest is the most powerful force in the universe."  Not to contradict the creator of 20th Century physics, but it is just as likely that the most powerful force in the universe is the power of unintended consequences.  The Federal Circuit illustrated this power in its recent decision in iNo Therapeutics LLC v. Praxair Distribution Inc. with regard to Justice Breyer's exhortation, in his Mayo Collaborative Serv. Inc. v. Prometheus Laboratories opinion, regarding the need to beware of "interpreting patent statutes in ways that make patent eligibility 'depend simply on the draftsman's art' without reference to the 'principles un­derlying the prohibition against patents for [natural laws],'" citing Flook v. Parker.

Plaintiffs iNO Therapeutics, LLC, Mallinckrodt Hospital Products Inc., and Mallinckrodt Hospital Products IP Inc. asserted U.S. Patent Nos. 8,282,966; 8,293,284; 8,795,741; 8,431,163; and 8,846,112, which the opinion "collectively [termed the] 'heart failure patents' or 'HF patents'" against Praxair Distribution Inc. and Praxair Inc.  Plaintiffs also asserted U.S. Patent Nos. 8,573,209; 8,776,794; 8,776,795; 9,265,911; and 9,295,802 which the opinion "collectively [termed the] 'delivery system infrared patents' or 'DSIR patents'" and which were directed to devices for administering nitric oxide gas.  As explained in the opinion, inhaled nitric oxide (iNO) gas had been "used to treat infants experiencing hypoxic respiratory failure" since at least the early 1990's.  However, in certain cases this treatment results in increased pulmonary edema for infants having a congenital defect, left ventricular hypertrophy.  The patents-in-suit were directed to methods and a gas delivery device to ameliorate this side-effect, as exemplified by the following claims:

The '741 patent:

1.  A method of treating patients who are candidates for inhaled nitric oxide treatment, which method reduces the risk that inhalation of nitric oxide gas will induce an increase in pulmonary capillary wedge pressure (PCWP) leading to pulmonary edema in neonatal patients with hypoxic respiratory failure, the method comprising:
    (a) identifying a plurality of term or near-term neonatal patients who have hypoxic respiratory failure and are candidates for 20 ppm inhaled nitric oxide treatment;
    (b) determining that a first patient of the plurality does not have left ventricular dysfunction;
    (c) determining that a second patient of the plurality has left ventricular dysfunction, so is at particular risk of increased PCWP leading to pulmonary edema upon treatment with inhaled nitric oxide;
    (d) administering 20 ppm inhaled nitric oxide treatment to the first patient; and
    (e) excluding the second patient from treatment with inhaled nitric oxide, based on the determination that the second patient has left ventricular dysfunction, so is at particular risk of increased PCWP leading to pulmonary edema upon treatment with inhaled nitric oxide.

The '794 patent:

1.  A gas delivery device comprising:
    a gas source to provide therapy gas comprising nitric oxide;
    a valve attachable to the gas source, the valve including an inlet and an outlet in fluid communication and a valve actuator to open or close the valve to allow the gas through the valve to a control module that delivers the therapy gas comprising nitric oxide in an amount effective to treat or prevent hypoxic respiratory failure; and
    a circuit including:
    a memory to store gas data comprising one or more of gas identification, gas expiration date and gas concentration; and
    a processor and a transceiver in communication with the memory to send and receive signals to communicate the gas data to the control module that controls gas delivery to a subject and to verify one or more of the gas identification, the gas concentration and that the gas is not expired.

(where the italicized limitations are relevant to the Court's decision).  The opinion also notes that the Court had earlier affirmed the PTAB's invalidation of the '112 patent in inter partes review (see "Praxair Distribution, Inc. v. Mallinckrodt Hospital Products IP Ltd. (Fed. Cir. 2018)").

The District Court held the claims of the HF patents to be directed to patent-ineligible subject matter under 35 U.S.C. § 101, and that Praxair did not infringe the claims of the DSIR patents.  Mallinckrodt appealed.

The Federal Circuit affirmed-in-part, vacated-in-part, and remanded, in an opinion by Chief Judge Prost joined by Judge Dyk; Judge Newman concurred in part and dissented in part (but the thrust of her opinion dissented from the majority's routine and now conventional, but not capable of being well-understood, affirmance that the claims were not eligible for patenting under § 101).  The Court applied its now well-worn (and unnecessarily expansive) interpretation of the Supreme Court's Mayo/Alice test in affirming the District Court.  Dissecting the claims in furtherance of its patent-invalidating efforts, the panel majority first states that:

It is undisputed that treatment of infants experiencing hypoxic respiratory failure with iNO gas has existed for decades.  The inventors observed an adverse event that iNO gas causes for certain patients.  The patent claim does no more than add an instruction to withhold iNO treatment from the identified patients; it does not recite giving any affirmative treatment for the iNO-excluded group, and so it covers a method in which, for the iNO-excluded patients, the body's natural processes are simply allowed to take place.  Consequently, the claim here is directed to the natural phenomenon.  The claim, apart from the natural phenomenon itself, involves only well-understood, routine, and conventional steps.  For the reasons below, claim 1 of the '741 patent fails to recite eligible subject matter.

What follows is the majority's justification for this conclusion.  The natural phenomenon is "undisputed" (because the majority defines it as such), the majority saying "[a] neonate patient's body will react to iNO gas in a certain way depending on whether or not the patient has a congenital heart condition called LVD," followed by a recitation of the consequences thereof.  The panel majority then parsed the claim language to find that the claims are "directed to" an observation of the natural phenomenon they have defined, because the exclusion (from treatment) step "merely restates the natural law" (nature it seems providing a caregiver who can give the gas as well as knowing without benefit of the invention when to refrain from giving it).  According to the majority:

Properly understood, this added step [characterized by Mallinckrodt as an "exclusion" step] is simply an instruction not to act.  In effect, the claim is directed to detecting the presence of LVD in a patient and then doing nothing but leaving the natural processes taking place in the body alone for the group of LVD patients.  Accordingly, the claim is directed to the natural phenomenon.

And to avoid any correspondence with Vanda Pharmaceuticals Inc. v. West-Ward Pharmaceuticals International Ltd., 887 F.3d 1117 (Fed. Cir. 2018), the majority asserted:

Indeed, Mallinckrodt cannot dispute that the patented method does not propose a new way of treating LVD patients that leverages this discovery (e.g., by titrating the iNO dose).  Instead, the claim simply requires that the patient not be treated with iNO.  This is significant because a claim not to treat—i.e., not to disturb these naturally-occurring physiological processes within the LVD patient's body—risks monopolizing the natural processes themselves.

And returning to the opinion's theme:

A closer look at the claim language as a whole confirms that the focus of the invention is not on a new way of actually treating the underlying condition of hypoxic respiratory failure.  Nor does it recite a way of reducing the risk of pulmonary edema while providing some level of treatment to those patients.  Rather, the focus of the invention is screening for a particular adverse condition that, once identified, requires iNO treatment be withheld.  A treatment step of administering a prior art dosage is also present.  But that step is plainly not the focus of the claimed invention.  Mallinckrodt concedes this step is not innovative.  Mallinckrodt does not point to "any innovation other than its [purported] discovery of the natural law," citing Athena Diagnostics, Inc. v. Mayo Collaborative Servs., LLC, 915 F.3d 743, 750 (Fed. Cir. 2019).

The opinion also cites Nat. Alternatives Int'l, Inc. v. Creative Compounds, LLC, 918 F.3d 1338 (Fed. Cir. 2019), and Endo Pharm. Inc. v. Teva Pharm. USA, Inc., 919 F.3d 1347 (Fed. Cir. 2019), in support of the majority's distinction between these claims and what it considers "method of treatment" claims.  The panel further distinguished these claims from the patent-eligible claims in Rapid Litigation Management Ltd. v. CellzDirect, Inc., 827 F.3d 1042 (Fed. Cir. 2016) (a decision also written by the Chief), again on the grounds of "a careful reading of the claim language" in those claims and these.

With regard to the second step of the Mayo/Alice test, the panel majority rejected Mallinckrodt's argument that the claims possess an "inventive concept."  Following their wont, the majority found nothing sufficiently novel to warrant satisfaction of the second step inquiry.  It is a tribute to the essential blurring of statutory lines engendered by Justice Breyer's Mayo decision (but much less understandable or forgivable when the nation's "patent court" does so) that the discussion revolves expressly on lack of novelty in performing the eligibility analysis ("This would be quite a different case if the inventors had invented a new way of titrating the dose" and, citing the District Court (which doesn't take a putatively specialized appellate court to do), "Plaintiffs cannot seriously contend that it is a new practice to exclude certain patients from treatment with a drug when those patients are at an increased risk of experiencing negative side effects from the drug").  Understandably, the majority took frank recourse to what they perceive to be the parallels between these claims and the claims in Mayo to support their decision.  And the majority characterized as a "red herring" Mallinckrodt's contentions that their claims do not entirely preempt the putative natural phenomenon, surprising in view of the role preemption plays in justifying the Supreme Court's eligibility requirements in the first place.

The majority's consideration of infringement of the DSIR patents is more legally conventional, involving Mallinckrodt's disagreement with the District Court's construction of the term "verify" in the phrase "verify one or more of the gas identification, the gas concentration and that the gas is not expired."  The majority correctly noted that the District Court didn't formally construe the word, giving it its plain and ordinary meaning.  The opinion characterizes this argument as Mallinckrodt "attempt[ing] to undo its loss on infringement by redrawing the metes and bounds of the claim" and finds this effort "unavailing."

Providing one basis for Judge Newman to agree with her colleagues, the opinion reversed a "technical error" by the District Court and remanded for correction of the Court's "clerical error" (specifically, issuing a "blanket" judgment on all the claims of the asserted patents rather than limiting it to the asserted claims).

Judge Newman's dissent is directed to the eligibility portion of the decision.  In her view, the inventors observed a natural phenomenon and then developed a treatment method that took advantage of that observation to avoid adverse events.  "The method that is described and claimed does not exist in nature; it was designed by and is administered by humans" in her view.  Procedurally, Judge Newman faults her colleagues because:

The majority improperly separates the claims into old and new steps, describes some claim steps as a "natural phenomenon" and some steps as "well-understood, routine, and conventional steps," and avoids the requirement that a claimed invention is considered as a whole.

And "[t]oday's change of law adds to the inconsistency and unpredictability of this area of patent-supported innovation."  In Judge Newman's view "the majority's ruling conflicts with extensive precedent" (which she extensively cites) as well as "the national interest":

The majority [states that] "we emphasize the narrowness of our holding today, which is limited to the particular claims at issue and is driven by the particular circumstances here."  This disclaimer appears at the end of a lengthy exposition, whose wide-ranging pronouncements of law and policy are not tied to narrow circumstances or claims.  The persistent theme of the majority's analysis is that if a claim contains limitations that concern human physiology, ineligibility arises under section 101, whether or not the claimed method of medical treatment meets the requirement of patentability.

The majority's broad pronouncement of ineligibility of medical treatment that relates to human physiology not only contravenes precedent, but contravenes the national interest in achieving new methods of medical treatment with the assistance of the patent incentive.

Reaching back more than two centuries, Judge Newman reminds her colleagues that patents do not function to "impede scientific and technologic advance," citing Whittemore v. Cutter, 29 F. Cas. 1120, 1121 (C.C.D. Mass. 1813), based on common law and statutory research exemptions, citing her dissent in Integra Lifesciences I, Ltd. v. Merck KGaA, 331 F.3d 860, 875 (Fed. Cir. 2003), and Giles Sutherland Rich in Principles of Patentability, 28 Geo. Wash. L. Rev. 393, 400 (1960) ("It should never be forgotten that patented inventions are published and become a part of the technical literature.  This publication itself promotes progress in the useful arts and it is the prospect of patent rights which induces disclosure and the issuance of the patent which makes it available.")

Returning to the majority's blessedly non-precedential opinion, it will bring cold comfort to patent-divested patentees, as well as being somewhat ironic that the upshot of the opinion leads patent prosecutors to the inevitable conclusion that the Federal Circuit is counseling exactly what Justice Breyer cautioned against in Mayo, that we should beware of the clever draftsman who attempts (or worse, succeeds) in obtaining claims that are enforceable and pass the patent eligibility test that the Federal Circuit has crafted, based predominantly on such claim-drafting cleverness.  This is not the first time that this has been the outcome of the Federal Circuit's patent eligibility jurisprudence.  For example, in In re Roslyn, Judge Dyk's opinion held patent-ineligible claims to Dolly the sheep which was, after all, just a sheep (notwithstanding being a sheep unlike any sheep that had ever lived).  But a careful review of that opinion leads ineluctably to the conclusion that, had the draftsman been clever enough (or prescient enough to realize before the fact the quantum and quality of cleverness required) to have claimed a flock of genetically identical sheep, the Court's objections to patent ineligibility would have perforce fallen, because it would be undeniable that flocks of genetically identical sheep do not occur in nature.  This state of affairs is frankly Byzantine and antithetical to Congress's purpose (uniformity and predictability in U.S. patent law) for creating the Federal Circuit, as well as being contrary to the principles of clarity and the creation of "bright line rules" that arguably prompted the Supreme Court to begin its heightened scrutiny of the Court and its opinions (if not philosophy).  The Federal Circuit's current path is contrary to the idea that patent claims should be readily understandable to well-intended business people and frank (or in current parlance, "efficient") infringers alike and also contrary to the Founders' attitudes regarding patenting as a way to encourage disclosure of new inventions for the public good.  Having such a path will give little relief to those who have lost patent rights under the current regime, but at least it provides a way for inventors to obtain patent-eligible claims no matter what other branches of government do in addressing this issue.  Innovation, especially in the diagnostic and life sciences arts, requires no more and is entitled to no less.

iNO Therapeutics LLC v. Praxair Distribution Inc. (Fed. Cir. 2019)
Nonprecedential disposition
Panel: Chief Judge Prost and Circuit Judges Newman and Dyk
Opinion by Chief Judge Prost; opinion concurring in part and dissenting in part by Circuit Judge Newman

Mayne Pharma Int'l v. Merck Sharp & Dohme Corp. (Fed. Cir. 2019)

By Kevin E. Noonan --

The Federal Circuit continued its explication of the circumstances wherein an inter partes review petition is time-barred under 35 U.S.C. § 315(b) in Mayne Pharma Int'l v. Merck Sharp & Dohme Corp., decided earlier this month, and as a bonus, illustrated how including disclosure in a specification for completeness and expanded claim scope can result in an invalidated claim when that scope unnecessarily encompasses the prior art.

The case arose as an appeal from the decision of the Patent Trial and Appeal Board (PTAB) in inter partes review of U.S. Patent No. 6,881,745 that claims 2, 6, and 9-14 are invalid as anticipated or obvious.  The '745 patent claims pharmaceutical formulations of azole antifungal drugs having the distinguishing feature that they are almost insoluble in water.  This limits their therapeutic effectiveness because it results in poor bioavailability inter alia due to low absorption.  The claims of the '745 patent are directed to formulations having improved bioavailability; claim 9 is representative:

A pharmaceutical composition, consisting essentially of:
    about 100 mg of an azole antifungal drug; and
    one or more polymer[s] having acidic functional groups; and
    optionally one or more additional ingredients selected from the group consisting of a disintegrant, a diluent, a filler, an inert solid carrier, an inert solid matrix, a lubricant, a glidant, a colouring agent, a pigment, a flavour, water, ammonia, an alkaline agent, and methylene chloride,
    wherein in vivo the composition provides a mean CMAX of at least 100 ng/ml, after administration in the fasted state.

(where the italicized claim terms are relevant for the issues before the Court).  Claims 6, 12, 13, and 14 further require a mean area under the curve (AUC) value of at least 800 ng-h/ml.  Although the Board instituted on three grounds, Mayne Pharma cancelled claims 1, 3, 5, and 6, rendering one of the grounds moot.  The remaining grounds decided by the PTAB were: 1) that claims 2, 6, 9, 11, 12, and 14 were anticipated by a scientific journal article to Kai, and 2) that these claims and claims 10 and 13 were obvious over the combination of Kai with two additional references (PCT Publication No. WO 98/00113 and European Patent Application No. EP 1027866).  Mayne appealed, arguing: 1) that the PTAB had erred because the IPR was time barred under § 315(b), and 2) by not limiting the claims to non-toxic embodiments of the claimed formulations.

The Federal Circuit affirmed, in an opinion by Judge Lourie, joined by Judges Dyk and O'Malley.  The circumstances surrounding Mayne Pharma's assertion of the § 315(b) time bar were that the real party in interest was Merck & Co. instead of Merck Sharp & Dohme Corp. (relevant because of earlier litigation outside the one-year limit for instituting an IPR after a complaint alleging patent infringement lawsuit has been served).  Mayne Pharma raised this issue throughout the proceedings before the PTAB, starting at the institution phase and throughout the review proceedings.  The Board eventually acquiesced, but refused to change the petition filing date, on the grounds that this would both "promote[] the core functions" from the PTAB Trial Practice Guide as well as "serv[ing] the interests of justice."  Mayne Pharma argued that the PTAB's own rules, specifically 37 C.F.R. § 42.104, permitted amendments to the petition without penalty regarding the filing date only for "clerical or typographical mistakes," which was not the case here.  Merck argued that the issue was beyond the scope of Federal Circuit review under § 314(d) and consistent with the Supreme Court's decision in Cuozzo Speed Technologies, LLC v. Lee, 136 S. Ct. 2131 (2016).  In the alternative, Merck argued that the Board ruled within the scope of its discretion in deciding not to alter the petition filing date when adding MCI as the real party in interest.  The issue is sufficiently important to the PTAB that the PTO intervened in the appeal in support of Merck's position.

The panel decided that there was no need to address the appealability issue because the § 314(d) bar is not a jurisdictional issue.  And in any event, the panel opined that the Board "committed no reversible error" and thus appealability is not an issue.  On the merits, the Federal Circuit made reference to the Trial Practice Guide for the purpose of identifying the real party in interest, which is to "identify[] conflicts and assure[] proper application of statutory estoppel."  The Board properly found (according to the panel opinion) that there was no evidence of "bad faith, or prejudice to a patent owner caused by the delay," or "intentional concealment, . . . bad faith on MSD's part, [an] attempt to circumvent the estoppel rules, or any other material benefit to it in its delay," permitting amendment to the identify of the real party in interest was "in the interest of justice under § 42.5(c)(3)."  After citing the provisions of the Leahy-Smith America Invents Act granting the PTO the discretion to promulgate rules to effectuate Congressional intent regarding inter partes review, and the principles regarding proper judicial deference to administrative agency rulemaking pursuant to Chevron, U.S.A., Inc. v. Natural Resources Defense Council, Inc., 467 U.S. 837 (1984), the panel affirmed the Board's decision based on the "interests of justice."  These interests would not be promoted, in the Court's opinion, by "unwinding the proceedings" and reversing the Board's decision.  And the Court further found that the primacy of § 42.104(c) purported by Mayne Pharma in support of reversing the Board was inconsistent with the Board having expressly determined that a petitioner could change the real party in interest without changing the petition filing date in Elekta Inc. v. Varian Med. Sys., Inc., No. IPR 2015-01401, 2015 WL 9898990, at *5 (P.T.A.B. Dec. 31, 2015), and Lumentum Holdings, Inc. v. Capella Photonics, Inc., No. IPR2015-00739, 2016 WL 2736005, at *3 (P.T.A.B. Mar. 4, 2016), as well as the Court's own precedent, citing Wi-Fi One, LLC v. Broadcom Corp., 878 F.3d 1364 (Fed. Cir. 2018).

Turning to the merits of the Board's invalidation decision, the panel noted that the Board had given the claims their broadest reasonable interpretation regarding the term "pharmaceutical composition."  Specifically, under this construction the Board considered both toxic and substantially non-toxic embodiments of azole antifungal drugs.  Mayne argued that their proffered construction was consistent with the parameters for the claimed formulations set forth in the "wherein" clauses of the challenged claims (referring to the pharmacokinetic characteristics of the claimed formulations in humans).  The Board had based its construction on the presence in the specification of toxic azole antifungal drugs such as saperconazole as well as (relatively) non-toxic azole antifungal drugs such as itraconazole.  And the "wherein" clauses were not limiting because their effect on claim scope was to limit the claims to "in vivo" applications, which could encompass administration to animals as well as human beings.

Applying this construction to Merck's anticipation and obviousness contentions, the Board found that Kai disclosed all the elements of the claimed formulation as administered to beagle dogs.  Regarding the obviousness case, the Board found sufficient motivation to combine the cited references, and a reasonable expectation of success.  Finally, the Board considered and rejected secondary considerations of non-obviousness asserted by Mayne Pharma.

The Federal Circuit also affirmed this portion of the Board's decision, applying the substantial evidence standard to the factual portions of the decision and reviewing claim construction de novo.  The panel agreed that the claims were not limited to non-toxic azole antifungal formulations, despite the modifier in the claims that these were "pharmaceutical" compositions based on (in hindsight, ill-advised) language in the specification.  In view of this language, and the panel's understanding that "few pharmaceuticals are free of toxic effects in some circumstances and dosages," the Federal Circuit found no basis to import a limitation of non-toxicity into the claim.  The opinion also credits the Board's understanding that extrinsic evidence supports the Board's construction.  Similarly, the panel affirmed the Board's construction not to be limited to administration to humans, in the face of a rather creative argument by Mayne Pharma that "in vivo" applies to plants as well as animals, and the pharmacokinetic properties recited in the claims are "irrelevant" to plants.  The Board's construction was consistent with the broadest reasonable interpretation of these claims, according to the opinion, based again on the express language in the specification.  The correctness of the Board's claim construction being the only bases for error asserted by Mayne Pharma, the Federal Circuit affirmed the Board's invalidation of the claims of the '745 patent.

Mayne Pharma Int'l v. Merck Sharp & Dohme Corp. (Fed. Cir. 2019)
Panel: Circuit Judges Lourie, Dyk, and O'Malley
Opinion by Circuit Judge Lourie

IBM Corp. v. Iancu (Fed. Cir. 2019)

Federal Circuit Reverses Board in Two IPR Decisions

By Joseph Herndon --

In International Business Machines Corp. (IBM) v. Iancu, the Federal Circuit found that the Board's interpretation of key claim limitations was incorrect resulting in the Board's decisions having errors.

IBM owns U.S. Patent No. 7,631,346, entitled "Method and System for a Runtime User Account Creation Operation Within a Single-Sign-On Process in a Federated Computing Environment."  At the behest of several private companies (who have settled and are not parties here), the U.S. Patent and Trademark Office, acting as delegee of the USPTO Director, instituted two related inter partes reviews (IPRs) of various claims of the '346 patent.  In the first IPR, the Board found that claims 1, 3, 12, 14, 15, and 18 are unpatentable because they are anticipated by Japanese Publication No. Tokkai 2004-302907A (Sunada).  In the second IPR, the Board found that claims 1, 3, 12, 13, 15, and 18 are unpatentable because they are anticipated by U.S. Patent No. 7,680,819 (Mellmer).

The Federal Circuit vacated and remanded the Sunada IPR decision as being based on an incorrect claim construction of the "federated computing environment" limitation of all claims at issue.  In the Mellmer IPR decision, the same claim construction error was found to be present, but did not affect the Federal Circuit's holding to reverse the Board's decision.

The '346 Patent

The specification explains that enterprises try to give their users the benefit of being able to gain access to multiple applications without regard to authentication barriers that protect each particular system supporting those applications.  A user might assume that once he or she has been authenticated by some computer system, the authentication should be valid throughout the user's working session, or at least for a particular period of time, without regard to the various computer architecture boundaries that are almost invisible to the user.  Among the techniques used to do so are "single-sign-on" (SSO) processes, which aim to require of a user only one authentication process during a particular user session.

The specification explains that user expectations about ease of access are coming to extend beyond the systems within an enterprise to Internet domains of different enterprises so that users can jump from interacting with an application on one Internet domain to another application on another domain without regard to the authentication barriers that protect each particular domain.  Thus, to reduce the costs of user management and to improve interoperability among enterprises, federated computing spaces have been created.

The specification then defines the term "federated" as being based on a cooperative relationship among enterprises that falls short of the unitary control available within an enterprise.  As enterprises move to support federated business interactions, these enterprises should provide a user experience that reflects the increased cooperation between two businesses.  In particular, a user may authenticate to one party that acts as an identity provider and then single-sign-on to a federated business partner.

Claim 1 of the '346 patent recites:

1.  A method for managing user authentication within a distributed data processing system, wherein a first system and a second system interact within a federated computing environment and support single-sign-on operations in order to provide access to protected resources, at least one of the first system and the second system comprising a processor, the method comprising:
    triggering a single-sign-on operation on behalf of the user in order to obtain access to a protected resource that is hosted by the second system, wherein the second system requires a user account for the user to complete the single-sign-on operation prior to providing access to the protected resource;
    receiving from the first system at the second system an identifier associated with the user; and
    creating a user account for the user at the second system based at least in part on the received identifier associated with the user after triggering the single-sign-on operation but before generating at the second system a response for accessing the protected resource, wherein the created user account supports single-sign-on operations between the first system and the second system on behalf of the user.

IPR Claim Construction

The disputes here focuses on the "federated computing environment" and "single-sign-on" claim limitations.  The Board and the parties agreed that both phrases are limiting, even though the first appears only in the preamble.

The Board recognized that both IBM and the private companies that requested the IPRs ("Petitioner") agreed about what a "federated computing environment" means:  "a 'loosely coupled affiliation of enterprises which adhere to certain standards of interoperability; the federation provides a mechanism for trust among those enterprises with respect to certain computational operations for the users within the federation.'"

But, surprisingly, the Board rejected the parties' agreed-on construction "that the scope of the term is limited to an affiliation of enterprises."  The Board did so even while recognizing the specification passage stating that "[a] federation is a loosely coupled affiliation of enterprises . . . ."  Despite that passage, the Board concluded that a federated computing environment is not limited to enterprises, such as organizations, institutions, etc.

Alternatively, the Board construed "federated computing environment" to mean an environment having a loosely coupled affiliation of entities that adhere to certain standards of interoperability; the federation provides a mechanism for trust among those entities with respect to certain computational operations for the users within the federation.  That construction replaces "enterprises" with "entities."

The Board was then able to find that claim element met in Sunada, and the key significance of that replacement is that, under the Board's construction, "two computer systems (or entities) within a single enterprise could disclose a 'federated computer environment.'"

The Federal Circuit concluded that the Board's construction is not reasonable in light of the specification.  In the key specification passage quoted above, which is on its face definitional, the patent states that a "federation" is "a loosely coupled affiliation of enterprises."  Nothing in the specification contradicts the passage's plain meaning.  In fact, the specification describes that a federation is a set of distinct entities, such as enterprises, organizations, institutions, etc., that cooperate to provide a single-sign-on, ease-of-use experience to a user.

The Federal Circuit found that a "system," referring to just the physical equipment and not who controls it or deals with customers in providing access to it, is not of the same type as "enterprises, organizations, institutions."

IPR Decisions

Thus, the Board's final written decision in the Sunada IPR was vacated and remanded for the Board to determine in the first instance whether, under the correct claim construction, Sunada anticipates the claims at issue in that IPR.

With respect to the Mellmer IPR, the Federal Circuit reversed the finding of anticipation.  The relevant claim limitation of the '346 patent requires "triggering a single-sign-on operation on behalf of the user in order to obtain access to a protected resource that is hosted by the second system."  The Board construed "single-sign-on operation" to mean "a process by which a user is authenticated at a first entity and subsequently not required to perform another authentication before accessing a protected resource at a second entity."

It is undisputed that, under those definitions, a user performs an authentication when the user takes an action that provides credentials, or that plays a role in launching a provision of credentials on the user's behalf, to obtain access to resources.  Thus, a "single-sign-on operation" is one that does not require the user to take such action to gain access to a second entity's resources after the user has been authenticated with a first entity.

The Mellmer patent describes a basic architecture for managing digital identity information in a network, such as the Internet.  Mellmer teaches techniques for securely logging in to multiple sites with a single password and doing so from any machine on the network.  More particularly, Mellmer describes a "DigitalMe" system that, for a user with a DigitalMe ID, eases access to various independent websites (DigitalMe partners) that participate in the system.

The issue here is whether a particular part of the described system requires a second user authentication action to gain access to a DigitalMe partner's resources.

The Federal Circuit found that the Board unreasonably viewed Mellmer and took a login scenario in isolation and out of context.  Once the focus was properly widened to understand the whole set of options and scenarios shown, substantial evidence did not support a finding that there is no user action triggering an authentication at the target site.

The Board did not cite, and the Director has not cited, anything in Mellmer that would support a contrary finding.  Nor was there any basis for discrediting the testimony of IBM's expert, which was grounded solidly in consideration of the full passages relevant to understanding the entire scenario.  The Federal Circuit therefore found that Mellmer does not teach the single-sign-on limitation of the claims at issue in the IPR.  Thus, despite the incorrect claim interpretation, that interpretation did not change the finding that Mellmer does not anticipate the claims.  The Board's decision in the Mellmer IPR was therefore reversed.

IBM Corp. v. Iancu (Fed. Cir. 2019)
Nonprecedential disposition
Panel:  Circuit Judges Moore, Taranto, and Chen
Opinion by Circuit Judge Taranto

Amgen Inc. v. Sandoz Inc. (Fed. Cir. 2019)

By Kevin E. Noonan --

The latest chapter in the long-running dispute between Amgen and Sandoz over Sandoz's Zarxio® biosimilar to Amgen's Neupogen® biologic drug came to a close last week when the Federal Circuit affirmed grant of summary judgment against Amgen in Amgen Inc. v. Sandoz Inc.

To recap, Amgen's Neupogen® product (filgrastim) is "a recombinant analog of granulocyte-colony stimulating factor ('G-CSF'), a naturally-occurring human glycoprotein that stimulates the production of neutrophils and stem cells and their release into the bloodstream."  It is used to treat patients with a deficiency of white blood cells (neutropenia), typically caused by treatment with certain cancer chemotherapeutic agents.  In 2014, Sandoz filed an abbreviated biologic license application (aBLA) under the provisions of § 351(k) of the Public Health Service Act (42 U.S.C. § 262(k)) for approval of its Zarxio® biosimilar.  However, Sandoz refused to comply with provisions of the Biologic Price Control and Innovation Act (BPCIA) requiring a biosimilar applicant to disclose its application and any relevant manufacturing information to reference product sponsor Amgen.  Amgen brought suit but the District Court denied Amgen's motion for preliminary injunction, ruling that such disclosure was not mandatory (see "Gotta Dance? Apparently Not -- A Biosimilar Update").  Amgen appealed to the Federal Circuit, who in a fractured decision agreed with Sandoz (see "Amgen v. Sandoz" and "Federal Circuit Decides Amgen v. Sandoz (in an opinion that will make neither party happy)"). The Supreme Court granted certiorari and also agreed with Sandoz (see "Sandoz Inc. v. Amgen Inc. (2017)").  And upon remand to the Federal Circuit, Amgen lost any chance of obtaining an injunction on the ground that the state law claims (unfair competition among them) asserted by Amgen were preempted by the BPCIA, which contained no provision for an injunction under these circumstances.  During this time, the FDA had approved Zarxio® and Sandoz was marketing the Neupogen® biosimilar (see "Sandoz' NEUPOGEN® Biosimilar Now on the Market").

Amgen pursued its patent case on the merits, asserting U.S. Patent Nos. 6,162,427 and 8,940,878.  The '427 patent is directed to methods for treating patients in need of peripheral stem cell transplantation; Amgen asserted claim 1 in the District Court action:

1.  A method of treating a disease requiring peripheral stem cell transplantation in a patient in need of such treatment, comprising
    administering to the patient a hematopoietic stem cell mobilizing-effective amount of G-CSF; and
    thereafter administering to the patient a disease treating-effective amount of at least one chemotherapeutic agent.

The '878 patent is directed at protein purification methods using adsorbent chromatography; claim 7 was at issue before the District Court:

7.  A method of purifying a protein expressed in a non-native limited solubility form in a non-mammalian expression system comprising:
    (a) expressing a protein in a non-native limited solubility form in a non-mammalian cell;
    (b) lysing a non-mammalian cell;
    (c) solubilizing the expressed protein in a solubilization solution comprising one or more of the following:
        (i) a denaturant;
        (ii) a reductant; and
        (iii) a surfactant;
    (d) forming a refold solution comprising the solubilization solution and a refold buffer, the refold buffer comprising one or more of the following:
        (i) a denaturant;
        (ii) an aggregation suppressor;
        (iii) a protein stabilizer; and
        (iv) a redox component;
    (e) directly applying the refold solution to a separation matrix under conditions suitable for the protein to associate with the matrix;
    (f) washing the separation matrix; and
    (g) eluting the protein from the separation matrix, wherein the separation matrix is a non-affinity resin selected from the group consisting of ion exchange, mixed mode, and a hydrophobic interaction resin.

Central to the issues on appeal was the District Court's claim construction, where the Court construed "disease treating-effective amount of at least one chemotherapeutic agent" in claim 1 of the '427 patent to be limited to "[a]n amount sufficient to treat a disease for which at least one chemotherapeutic agent is prescribed," rejecting Amgen's asserted construction that the amount must be merely sufficient to mobilize stem cells regardless of its effect on the underlying disease.  Under this construction, Amgen stipulated Sandoz did not infringe claim 1 of the '427 patent pending appeal to the Federal Circuit.

The District Court construed the terms relating to the "washing" and "eluting" steps of the method claimed in the '878 patent (specifically, subparts (f) and (g)) as being separate steps that required the washing step to be performed before the eluting step.  Again, under this construction Amgen conceded it could not prevail on infringement because Sandoz performed these steps concurrently with step (e) (regarding application of the refolding solution).  This appeal followed.

The Federal Circuit affirmed, in an opinion by Judge Lourie joined by Judges O'Malley and Reyna.  Regarding construction of the claims of the '878 patent, the panel credited Sandoz's argument that the claim "logically requires a series of steps," citing (as did Sandoz) Mformation Technologies, Inc. v. Research in Motion Ltd., 764 F.3d 1392, 1398–1400 (Fed. Cir. 2014) ("a process claim is properly limited to a certain order of steps 'when the claim language, as a matter of logic or grammar, requires that the steps be performed in the order written, or the specification directly or implicitly requires' an order of steps").  The Federal Circuit, like the District Court, rejected Amgen's argument that washing and eluting could be performed simultaneously, for example, under circumstances where "washing may occur toward the bottom of the matrix at the same time that elution occurs toward the top."  The Court's reasoning was based in part on the ordered (and sequentially lettered) steps (a) through (g), which "logically" implies they be performed in sequence.  This ordered performance of the steps was also consistent with how the process was described in the specification.

Having determined that the District Court's construction was correct as a matter of law (and thus that Sandoz process did not literally infringe claim 7 of the '878 patent), the Federal Circuit then considered infringement under the doctrine of equivalents.  Using language that arguably was at least in part responsible for energizing the Supreme Court to review more closely the Federal Circuit's stewardship of the Court's patent jurisprudence (inter alia, in Warner-Jenkinson v. Hilton Davis Chemical Co. and Festo Corp. v. Shoketsu Kinzoku Kogyo Kabushiki Co. almost a generation ago), the panel dismissed Amgen's doctrine of equivalents argument saying "[t]he doctrine of equivalents applies only in exceptional cases and is not 'simply the second prong of every infringement charge, regularly available to extend protection beyond the scope of the claims,'" citing its pre-Warner Jenkinson precedent in London v. Carson Pirie Scott & Co., 946 F.2d 1534, 1538 (Fed. Cir. 1991).  More correctly (and less provocatively), the panel based its decision on the sound reasoning that "Sandoz does not infringe claim 7 under the doctrine of equivalents because its one-step, one-solution purification process works in a substantially different way from the claimed three-step, three-solution process" recited in Amgen's claims.

The opinion also rejected Amgen's argument that the District Court abused its discretion in not denying or postponing summary judgment under Federal Rule of Civil Procedure 56(d) because Sandoz "intends" (undisputedly), sometime in an uncertain future, to change its purification protocol to (perhaps) an infringing one but has provided neither Amgen nor the FDA with details of its plans.  As the Court held in Sunovion Pharm., Inc. v. Teva Pharm. USA, Inc., 731 F.3d 1271, 1279–80 (Fed. Cir. 2013), while district courts cannot ignore amendments to ANDA or aBLA applications in determining whether there is (artificial) infringement under § 271(e)(2), they also have "a broad mandate to render a 'just, speedy, and inexpensive' decision," citing In re Micron Tech., Inc., 875 F.3d 1091, 1100 (Fed. Cir. 2017) (quoting Dietz v. Bouldin, 136 S. Ct. 1885, 1891 (2016)).  The opinion discounted Amgen's argument that failure to postpone judgment would deny them of a remedy if Sandoz changed its process to an infringing one, on the grounds that Amgen could pursue a remedy for infringement to the extent that principles of res judicata and collateral estoppel were not violated, citing Bayer AG v. Biovail Corp., 279 F.3d 1340, 1349–50 (Fed. Cir. 2002).  Under the circumstances before the Court in this case (particularly because the possible changes Sandoz might make would still not result in an infringing process), the Federal Circuit held the District Court did not abuse its discretion in declining to postpone entry of summary judgment.  This aspect of the decision highlights a disparity in information first encountered when Sandoz refused to disclose either its aBLA or manufacturing information under Paragraph 2 of the BPCIA (42 U.S.C. § 262 (l)(2)).  The District Court (expressly), the Federal Circuit, and the Supreme Court evinced their presumption that all requisite information could be obtained during discovery in an ensuing lawsuit (disregarding the disadvantage their interpretation of the statute propagated regarding which patent(s) a reference product sponsor such as Amgen should sue on in the absence of this information).  Again, here, the Federal Circuit presumes that Amgen will be able to obtain the information necessary to file a well-pleaded complaint in the event Sandoz begins practicing an infringing version of its purification method, without addressing Amgen's argument that there is a possibility that they will not have and will not be able to obtain the information, under circumstances where the Court had at least some leverage to obtain binding representations from Sandoz that this information would be made available should that time come.

Turning to the '427 patent, the panel also affirmed the District Court's construction of the term "disease treating-effective amount of at least one chemotherapeutic agent" to be limited to "[a]n amount sufficient to treat a disease for which at least one chemotherapeutic agent is prescribed."  The Federal Circuit rejected Amgen's argument that the amount need not be effective to treat the underlying disease but only be sufficient to mobilize stem cells in blood or bone marrow.  The opinion based this construction on the preamble ("A method of treating a disease") and (according to the Court) "neither the claim nor the specification lends support to Amgen's interpretation."  Under Amgen's construction, the claim would encompass activities directed solely at mobilizing stem cells, which would require the "disease treatment" to correspond to stem cell mobilization per se.  There is no basis for this interpretation in the panel's view, and thus the Court affirmed the District Court's grant of summary judgment.

Amgen Inc. v. Sandoz Inc. (Fed. Cir. 2019)
Panel: Circuit Judges Lourie, O'Malley, and Reyna
Opinion by Circuit Judge Lourie