Patent Docs

Enzo Biochem Inc. v. Applera Corp. (Fed. Cir. 2017)

By Donald Zuhn --

Last week, in Enzo Biochem Inc. v. Applera Corp., the Federal Circuit determined that the District Court for the District of Connecticut accurately interpreted the Federal Circuit's decision in Enzo Biochem, Inc. v. Applera Corp. (Enzo II), 780 F.3d 1149 (Fed. Cir. 2015), concerning the proper construction of the claims in U.S. Patent No. 5,449,767, and correctly analyzed the doctrine of equivalents argument of Plaintiffs-Appellants Enzo Biochem, Inc., Enzo Life Sciences, Inc., and Yale University ("Enzo").  The District Court had found that the Federal Circuit's decision in Enzo II applied to all of the claims in the '767 patent, and not just claim 1 as Enzo had asserted, and had rejected Enzo's argument that the claims covered direct detection (in addition to indirect detection) under the doctrine of equivalents.  The Federal Circuit affirmed both determinations by the District Court.

The opinion begins by noting that the Federal Circuit had considered the infringement action between Enzo and Defendants-Appellees Applera Corp. and Tropix, Inc. ("Applera") on three separate occasions over thirteen years.  The dispute began in 2004, when Enzo filed suit against Applera alleging infringement of six patents, including the '767 patent.  The '767 patent is directed to the use of nucleotide probes to detect the presence of a particular DNA or RNA sequence in a sample or to identify an otherwise unknown DNA sequence.  Such detection occurs via hybridization of the probes with the DNA or RNA sequence of interest, wherein hybridization of the probe and target sequence may be directly detected (by using a labeled probe) or indirectly detected (by using a secondary chemical agent that is bound to the labeled probe).

After a jury found that Applera infringed claims 1, 8, 67, 68, and 70 of the '767 patent, Applera appealed, arguing that the District Court had erred in construing the claims to only cover indirect detection.  The Federal Circuit in Enzo II reversed, concluding that "the inventors were claiming only indirect detection," and therefore that the District Court had erred in construing the claims to cover both direct and indirect detection.  On remand, the District Court granted Applera's motion for summary judgment of noninfringement, determining that Enzo II applied to all of the claims of the '767 patent and rejecting Enzo's doctrine of equivalents argument.  Enzo appealed the District Court's judgment to the Federal Circuit.

With respect to Enzo's argument that the District Court incorrectly interpreted the Federal Circuit's decision in Enzo II as applying to all of the claims of the '767 patent, with Enzo asserting that Enzo II should only apply to claim 1, the panel concluded that:

[A]fter carefully parsing our decision, the district court correctly interpreted Enzo II.  As the district court explained, Enzo II consistently refers to the "claims" at issue in that appeal, which extended beyond claim 1 to include claims 8, 67, 68, and 70.  . . .  For example, our opinion in Enzo II, after acknowledging that Enzo had asserted claims 1, 8, 67, 68, and 70, states that the district court "erred in its claim construction by finding that the claims at issue covered direct detection" [emphasis in original].

As for Enzo's argument that Applera infringed claims 1 and 8 under the doctrine of equivalents, the panel notes that "[t]he district court explained that the patent 'describes its method of indirect detection as a superior means of detection as compared to direct detection, with 'detection capacities equal to or greater than products which utilize' direct detection,'" and determined that "Enzo's attempt to reframe its infringement case under the doctrine of equivalents runs headfirst into our decision in Enzo II," where the Federal Circuit found that the claims covered only indirect detection.  As a result, the opinion concludes that "Enzo's attempt to incorporate direct detection methods now through the doctrine of equivalents fails."

Finding that the District Court properly interpreted Enzo II as applying to all of the claims of the '767 patent, and further, that the District Court correctly held that Applera's accused products using direct detection did not infringe Enzo's '767 patent claiming indirect detection, the Federal Circuit affirmed the District Court's judgment.

Enzo Biochem Inc. v. Applera Corp. (Fed. Cir. 2017)
Nonprecedential disposition
Panel: Chief Judge Prost and Circuit Judges O'Malley and Wallach
Opinion by Circuit Judge O'Malley

Securus Technologies, Inc. v. Global Tel*Link Corp. (Fed. Cir. 2017)

By Michael Borella --

Over the last 18 months, the Federal Circuit has been quietly shoring up the non-obviousness provisions of 35 U.S.C. § 103 by enforcing the requirement that an obviousness argument entails making the full prima facie case.  That is, in order to invalidate a claim over two or more prior art references, the challenger needs to (i) establish that all elements of the claim are either present in or suggested by the prior art, (ii) that one of ordinary skill in the art would be motivated to combine these references in a fashion that would result in the claimed invention, and (iii) had a reasonable expectation of success in doing so.

All too often, attacking these two final steps of the obviousness analysis are left out in a § 103 rebuttal.  This is hardly surprising, given that many USPTO examiners seem to believe that merely stating that references could be combined (and perhaps providing a terse explanation of the reasons for doing so) is sufficient to establish the motivation prong of the prima facie case.  During interviews and in written arguments, it is typically much easier to convince an examiner to withdraw a § 103 rejection by arguing that the references do not teach a particular claim element.

Before the Patent Trial and Appeal Board (PTAB) things can be different.  PTAB judges are more open to rebuttals of the challenger's motivation to combine.  Thus, patentees are more likely to emphasize such arguments.  Nonetheless, the Federal Circuit has had to frequently correct the PTAB's misapplication of this nuance, especially of late (see "Personal Web Technologies, LLC v. Apple, Inc. (Fed. Cir. 2017)" as just one recent example).  This case is an example of the Federal Circuit affirming a PTAB decision that "got it right" with respect to § 103.

Petitioner Securus appealed a final written decision from the PTAB in an inter partes review (IPR) of Global Tel*Link's U.S. Patent No. 7,853,243.  The PTAB had ruled that Securus did not make out a proper prima facie case of obviousness.

The '243 patent "relates to a secure telephone call management system that can authenticate the identity of users seeking to make a telephone call from the inside of penal institutions or similar facilities."  Particularly, the "system authenticates users before they attempt to make a phone call by requiring a user to first supply his or her pre-assigned personal identification number (PIN), as well as certain biometric data."  The biometric data can be fingerprints, voiceprints, retinal scans, etc.

Claim 1 of the '243 patent recites:

1.  A method for restricting access to a public telephone network using a telephone call management system, said method comprising the steps of:
    assigning a first identification number to each of a plurality of potential callers;
    recording a first voice print of at least one potential caller;
    storing said first voice print and said first identification number in a database;
    during each access attempt to said public telephone network by said potential caller:
    prompting said at least one potential caller to input a second identification number;
    recording a second voice print of said at least one potential caller;
    matching said first and second identification numbers;
    comparing said second voice print with said first voice print associated with said first identification number;
    granting said at least one potential caller access to said public telephone network to attempt to place a telephone call if said second voice print matches said first voice print;
    monitoring at least one conversation to detect the presence of a three-way call attempt; and
    recording at least one conversation between said at least one potential caller and a third-party remotely located from said at least one potential caller if said recording is permissible; and
    detecting the presence of predetermined keywords in audio of said at least one conversation.

Notably, the "during" step ends with a colon rather than a semicolon.  This subtlety is easy to miss, but turned out to be important even if not determinative.

Securus argued that claim 1 was obvious over the combination of two references, Susen and Gainsboro.  Susen "generally discloses the use of voice recognition to verify users before they can access a particular line on [a] PBX or mobile terminals," where "[v]oice recognition can be used in conjunction with PINs in the verification process."  Gainsboro "addresses the problem of having employees of [penal] institutions review recorded phone calls for suspicious behavior."  These phone calls are made by the inmate.  Further, "[Gainsboro] includes automatic speech recognition (ASR) technology to existing telephone systems in these institutions so as to eliminate the need for these employees."

The Court first reviewed a claim construction dispute.  Securus took the position that the "during" step only includes the immediately following "prompting" step, because the former ends with the colon as noted above and the later ends with a semicolon.  The "recording" step and all following steps would not be part of this combined "during" step.  In other words, Securus asserted that a proper construction of claim 1 would be:

                    * * *
    storing said first voice print and said first identification number in a database;
    during each access attempt to said public telephone network by said potential caller: prompting said at least one potential caller to input a second identification number;
    recording a second voice print of said at least one potential caller;
                    * * *

In contrast, Global Tel*Link's proposed construction was that the "during" step incorporated the next five steps.  This construction would read as follows:

                    * * *
    storing said first voice print and said first identification number in a database;
    during each access attempt to said public telephone network by said potential caller: prompting said at least one potential caller to input a second identification number; recording a second voice print of said at least one potential caller; recording a second voice print of said at least one potential caller; matching said first and second identification numbers; comparing said second voice print with said first voice print associated with said first identification number; granting said at least one potential caller access to said public telephone network to attempt to place a telephone call if said second voice print matches said first voice print;
    monitoring at least one conversation to detect the presence of a three-way call attempt; and
                    * * *

The PTAB adopted Global Tel*Link's construction and found that the relevant reference, Susen, did not disclose all of these steps.  The Court agreed, noting that "the most natural reading of the [during] limitation is one that incorporates all the steps from the beginning of the attempt to access the telephone network to the end of that attempt," which includes all five elements following the "during" step.  The Court found that this construction was logical and explicitly supported by the specification.

The PTAB also ruled that Securus "failed to explain why a person of ordinary skill in the art (skilled artisan) would combine Susen and Gainsboro to arrive at the claimed invention."  Securus challenged this part of decision as well.

The Court set forth the controlling law, noting that "it is not enough to simply show that the prior art references disclose the claim limitations; in addition, it can be important to identify a reason that would have prompted the skilled artisan to combine the elements as the new invention does."  Securus contended that since "[b]oth prior art patents are in the same field of telecommunications monitoring and control," one skilled in the art "would be motivated to combine Susen with Gainsboro to include monitoring said telephone call for a hook flash indicative of three-way calling."

The Court agreed with the PTAB, observing that "Securus' case against the patentability of the claimed invention amounts to mere conclusory statements, which fall short of some articulated reasoning with some rational underpinning to support the legal conclusion of obviousness" as required by § 103.  Continuing, the Court wrote that "Securus failed to explain how or why the skilled artisan would combine the teachings of Susen, which are generally directed to authorizing telephone access through voice recognition in corporate settings, with the teachings of Gainsboro, which are generally directed to listening in on and reviewing phone conversations in penal settings, to arrive at the claimed invention."  Moreover, "a broad characterization of Susen and Gainsboro as both falling within the same alleged field of telecommunications monitoring and control, without more, is not enough for Securus to meet its burden of presenting a sufficient rationale to support an obviousness conclusion . . . [s]uch short-cut logic would lead to the conclusion that any and all combinations of elements known in this broad field would automatically be obvious, without the need for any further analysis."

Consequently, the Court upheld the PTAB's decision that Securus did not meet its burden to establish that the claims were obvious.

There are two main take home points to this case.  The most important one should be obvious (pun intended) -- when making obviousness contentions, a well-reasoned motivation to combine must be present.  The second is that claim formatting matters.  Especially in software claims where there are steps and sub-steps, it can be important to make sure the claim structure itself clearly spells out these relationships.  Some practitioners use enumeration, others use indentation or other types of formatting.  Both have their pros and cons.  Here, Global Tel*Link was fortunate that the PTAB and the Court saw things its way.  But patentees should not count on the proper structure being imposed on claims that might not be 100% clear on their face.

Securus Technologies, Inc. v. Global Tel*Link Corp. (Fed. Cir. 2017)
Nonprecedential disposition
Panel: Circuit Judges Newman, Chen, and Stoll
Opinion by Circuit Judge Chen

Samsung Electronics Co. v. Straight Path IP Group, Inc. (Fed. Cir. 2017)

By Joseph Herndon --

In a nonprecedential decision, the Federal Circuit affirmed a decision by the Patent Trial and Appeal Board in inter partes review proceedings which upheld the patentability of claims due to construction of the claim term "is connected to the computer nework".  Namely, Samsung Electronics as well as a number of other companies (Cisco Systems, Avaya, LG Electronics, Toshiba Corp., VIZIO, Hulu, and Verizon) appealed from final written decisions of the Patent Trial and Appeal Board in inter partes review proceedings of U.S. Patent Nos. 6,108,704 ('704 patent); 6,009,469 ('469 patent); and 6,131,121 ('121 patent).  In its final written decisions, the Board upheld the validity of all instituted claims, and the Federal Circuit affirmed the Board's decision.

The '704 Patent

The '704 patent, entitled "Point-to-Point Internet Protocol," generally relates to establishing a point-to-point communication link.  The '469 patent and the '121 patent are continuations-in-part of the '704 patent.  The specifications for the three challenged patents are largely identical.  The '469 patent, entitled "Graphic User Interface for Internet Telephony Application," and the '121 patent, entitled "Point-to-Point Computer Network Communication Utility Utilizing Dynamically Assigned Network Protocol Addresses," both relate to facilitating audio communications over computer networks.  Each patent explains that a first processing unit automatically transmits its associated e-mail address and IP address to a connection server.  The connection server stores the addresses in a database and, in so doing, establishes the first processing unit as an active on-line party available for communication.  The first processing unit sends a query to the connection server, which searches the database to determine whether a second processing unit (e.g., callee) is active and on-line.  If the callee is active and online, the connection server sends the IP address of the callee from the database to the first processing unit, i.e., performs a point-to-point Internet protocol communication.  The first processing unit then directly establishes the point-to-point Internet communication with the callee using the retrieved IP address.  Claim 1 of the '704 patent, which is representative of the claims at issue in this appeal, recites:

1.  A computer program product for use with a computer system, the computer system executing a first process and operatively connectable to a second process and a server over a computer network, the computer program product comprising:
    a computer usable medium having program code embodied in the medium, the program code comprising:
        program code for transmitting to the server a network protocol address received by the first process following connection to the computer network;
        program code for transmitting, to the server, a query as to whether the second process is connected to the computer network;
        program code for receiving a network protocol address of the second process from the server, when the second process is connected to the computer network; and
        program code, responsive to the network protocol address of the second process, for establishing a point-to-point communication link between the first process and the second process over the computer network.

First Inter Partes Review

In an earlier-filed petition for inter partes review, another petitioner, Sipnet EU S.R.O., challenged claims of the '704 patent over the same prior art references that were at issue in this appeal.  In the Sipnet IPR, the Board concluded that claim 1 of the '704 patent, among others, was unpatentable as anticipated by each of the prior art references.  Straight Path appealed that decision on the grounds that the Sipnet Board misconstrued the claim term "is connected to the computer network" to mean "active and on-line at registration."  Straight Path IP Grp., Inc. v. Sipnet EU S.R.O., 806 F.3d 1356, 1360 (Fed. Cir. 2015).  The Federal Circuit rejected the Board's claim construction and construed "is connected to the computer network" to mean "is connected to the computer network at the time that the query is transmitted to the server."

In construing the disputed claim limitation, the Federal Circuit first looked to the plain meaning of the claim language and concluded that the present tense "is" in "is connected to the computer network" plainly says that the query transmitted to the server seeks to determine whether the second unit is connected at that time, i.e., connected at the time that the query is sent.  The query does not seek to determine whether the device was connected or whether it is still registered as being connected even if that registration information is no longer accurate.  Thus, the Federal Circuit concluded that the claim language is not satisfied by a query that asks only for registration information, regardless of its current accuracy.

The Federal Circuit concluded that the specification does not provide a basis for adopting a construction that contradicts the plain meaning of the claim language.

Second Inter Partes Review

Returning to the present case, Samsung et. al. requested inter partes review of claims of the '704 patent, as well as claims of the '469 patent and the '121 patent, and challenged the claims at issue under 35 U.S.C. § 103(a) over a combination of references.  The two references at issue are the Microsoft Windows NT 3.5, TCP/IP User Guide (1994) ("WINS") and The Open Group, Technical Standard, Protocols For X/Open PC Interworking: SMB, Version 2.0 (1992) ("NetBIOS").

The Board found that WINS and NetBIOS both describe name server technology.  In particular, NetBIOS is a software interface that allows applications on different computers to communicate within a computer network, such as a local area network or the Internet.  The NetBIOS name service stores registered names in a database, and a name query transaction can be initiated by an end-node in an attempt to obtain the IP address associated with a NetBIOS name.  If the NetBIOS Name Server has information regarding a queried node, the NetBIOS Name Server transmits a positive response.  If the NetBIOS Name Server does not have information regarding a queried node, the NetBIOS Name Server transmits a negative response.  Once the IP addresses have been found for a target name, a NetBIOS session service begins.  The NetBIOS session service involves directed (point-to-point) communications.

WINS is an implementation of NetBIOS.  When a computer's name is registered with the WINS server, the server accepts the entry with a timestamp, an incremental unique version number, and other information.  Once a computer is registered with the WINS server as active and on-line, the WINS server maintains a database of names and addresses as active and on-line by (1) releasing names once a computer is shut down properly, and (2) requiring a renewal time period in which a computer must reregister.

In its final decision, the Board adopted the Federal Circuit's prior claim construction of the phrase "is connected to the computer network" and construed it to mean "is connected to the computer network at the time that the query is transmitted to the server."  The Board determined that neither the WINS reference nor the NetBIOS reference discloses the claimed "is connected to the computer network" limitation.  Accordingly, the Board concluded that Appellants failed to show by a preponderance of the evidence that any of the instituted claims reciting the limitation "connected to the network" (or the counterpart claim phrases) are unpatentable.

Samsung Appeal

On appeal, Samsung argued that the Board's application of the prior claim construction was impermissible as a matter of law because the Board added a limitation not found in the claim when it purportedly required that the prior art references demonstrate "perfect accuracy" when querying whether a process is connected to the computer network.

In particular, Samsung contended that the Board found that the prior art did not satisfy the disputed limitation only because of a possible circumstance in which the WINS database may no longer be accurate, and in which the name server may be incorrect.

But Straight Path argued that not only is the prior art not designed to keep track of current online status, it is not designed to check online status when responding to a query for a user's IP address.

The Federal Circuit agreed with Straight Path and found that the Board did not import an additional "perfect accuracy" limitation.  The Federal Circuit found that neither reference tracks a user's online status.  The Board determined that neither WINS nor NetBIOS will determine whether the second process is connected to the computer network at the time the query is transmitted to the server, i.e., whether a user is on-line at the relevant time.

This conclusion was considered to be supported by substantial evidence.  The Board determined that the references disclose that the name servers have information that a process "was" connected to the computer network.  But this does not meet the claim limitation.  WINS and NetBIOS both disclose querying a name server for the registered address of the callee computer.  This is not sufficient though.  The Federal Circuit noted that a query that asks only for registration information, regardless of its current accuracy, will not satisfy the claim limitation.

The outcome here is somewhat surprising.  The prior art appears to be very close, and one would imagine that during prosecution, such a rejection under 35 U.S.C. § 103 would most certainly be upheld by a patent examiner.  Here, the subtle difference of when the status check is performed was enough to distinguish over the prior art, however.

Samsung Electronics Co. v. Straight Path IP Group, Inc. (Fed. Cir. 2017)
Nonprecedential disposition
Panel: Chief Judge Prost and Circuit Judges O'Malley and Wallach
Opinion by Chief Judge Prost

Braintree Laboratories, Inc. v. Breckenridge Pharmaceutical, Inc. (Fed. Cir. 2017)

By Kevin E. Noonan --

The Federal Circuit's decision on Friday, in Braintree Laboratories, Inc. v. Breckenridge Pharmaceutical, Inc., illustrates the risks a litigant can take when agreeing to a stipulation in an effort at least to reduce litigation costs and issues presented at trial.

The case involved ANDA litigation over ANDA defendant Breckenridge Labs' generic version of Braintree's bowel preparation kit (SUPREP), sold to purge a patient's colon prior to inter alia colonoscopy.  The formulation as sold by Braintree comprises "two six-ounce bottles of an aqueous hypertonic solution of potassium sulfate, magnesium sulfate, and sodium sulfate," which according to the FDA-approved label are filled to 16 ounces prior to consumption (which occurs once in the evening before the procedure and once the morning of a colonoscopy).  Claim 15 of Braintree's patent in suit (U.S. Patent No. 6,946,149) is representative:

A composition for inducing purgation of the colon of a patient, the composition comprising from about 100 ml to about 500 ml of an aqueous hypertonic solution comprising an effective amount of Na₂SO₄, an effective amount of MgSO₄, and an effective amount of K₂SO₄, wherein the composition does not produce any clinically significant electrolyte shifts and does not include phosphate.

At issue was construction of the terms "purgation" and "from about 100 ml to about 500 ml."  The former limitation was earlier construed in an unrelated litigation -- Braintree Laboratories, Inc. v. Novel Laboratories, Inc. -- where the Federal Circuit held that the term means "an evacuation of a copious amount of stool from the bowels after oral administration of the solution."  This is relevant here because under this construction the two claim terms at issue are not contradictory (insofar as complete purging of the bowels is not achieved by ingesting only one bottle of the formulation, and both bottles together have a greater volume (946 mL) than the volumetric limitation permits).

Here, ANDA defendant Breckenridge stipulated that the construction of "purgation" in the Novel case would apply in this case (representing acquiescence to the reality that the Federal Circuit's construction in the Novel appeal would apply in any case).  But Breckenridge's stipulation went further, wherein defendant agreed to be bound by any parts of the Novel opinion bearing on invalidity or non-infringement.  As it turned out, the Novel decision did not address the volumetric limitations, and the District Court granted summary judgment that Breckenridge did not directly infringe nor induce infringement of the claims of the '149 patent, on two grounds.  The first was that the term "from about 100 ml to about 500 ml" meant the entire volume ingested, which was incontestably greater (946 mL) than the recited 500 mL limit.  Second, the District Court held that Breckenridge's label could not induce infringement under 35 U.S.C. § 271(e) because anything less than "full" colonic purging was not an approved use of the formulation.  Braintree appealed.

The Federal Circuit reversed and remanded, in an opinion by Judge Moore, joined by Judges Newman and Wallach.  The opinion rejects Breckenridge's view that the Novel opinion was not preclusive with regard to the volumetric limitation.  In the panel's view, "[t]he meaning of the term 'from about 100 ml to about 500 ml' was necessarily connected to our construction of 'purgation.'"  Novel had "intertwined" the two claim limitations in its noninfringement arguments, and the panel read the Court's earlier opinion to hold that "cleansing" (i.e., complete purgation), while recited as a goal expressly disclosed in the specification was not a claim limitation.  The panel also read the Novel opinion to mean that "from about 100mL to about 500mL" was sufficient to induce purgation under the claims of the '149 patent.  Citing the Novel opinion, this panel reminds the parties that:

Each of those half-dose sixteen ounce solutions has a total volume of 473 mL, which is within the range found in the asserted claims of the '149 patent, but Braintree concedes that neither dose accomplishes a full cleansing.  Thus, Braintree's "one bottle" infringement theory asserts that one (half-dose) bottle of SUPREP, diluted with water to become a sixteen ounce solution, falls within the asserted claims.  This infringement theory can prevail if purgation means the "evacuation of a copious amount of stool from the bowels after oral administration of the solution," which is something less than a full cleansing.

The Court also asserts that it is cognizant of the due process requirements, recited in Blonder-Tongue Labs., Inc. v. Univ. of Ill. Found., 402 U.S. 313, 329 (1971), that a party not be estopped by a claim construction decision where it is neither a party nor in privity with one.  But Breckenridge stipulated that it would be bound by the Court's earlier decision.  This stipulation foreclosed the District Court from construing the "from about 100mL to about 500mL" limitation otherwise.

With regard to the § 271(e) argument, the opinion also disagrees with the District Court's distinction between "purgation" and full colonic cleaning, based on the lower court's reading of the Novel decision.  The panel says this case is unlike its earlier decisions, holding that an ANDA defendant's label could not induce infringement, based on the factual differences between those cases and this one.  (The panel cited Warner-Lambert Co v. Apotex Corp., 316 F.3d 1348 (Fed. Cir. 2003); Allergan, Inc. v. Alcon Labs., Inc., 324 F.3d 1322 (Fed. Cir. 2003); and Bayer Schering Pharma AG v. Lupin, Ltd., 676 F.3d 1316, 1321 (Fed. Cir. 2012) in this regard.)  In contrast with those cases, the Court states that "inducing purgation" is not a distinct use of the claimed formulation, because inducing purgation is just a means for achieving the desired result (inducing purgation of the colon of a patient) recited in the preamble of the '149 patent claims.  And Breckenridge conceded that this is what its formulation was intended to do.  Accordingly, the Court held that Breckenridge's generic formulation "recommends or suggests to physicians that the drug is safe and effective for administration to patients for the purposes of inducing [purgation]."  This being the only FDA-approved use for Braintree's SUPREP, the Court held that a physician would understand that the generic label is also "safe and effective" for this use.  Indeed, "[t]o hold otherwise would lead to the absurd result that a physician would understand Breckenridge's proposed product to be safe and effective for fully cleansing the colon, but not safe and effective at accomplishing a partial colon cleansing" according to the Court.

Due to Breckenridge's stipulations, that its proposed generic product would infringe the asserted claims of the '149 patent absent summary judgment, and that it would not raise defenses or counterclaims other than its noninfringement defense, the Court reversed and remanded with instructions that the District Court enter judgment in favor of Braintree.  And the Court awarded Braintree its costs.

Braintree Laboratories, Inc. v. Breckenridge Pharmaceutical, Inc. (Fed. Cir. 2017)
Nonprecedential disposition
Panel: Circuit Judges Newman, Moore, and Wallach
Opinion by Circuit Judge Moore

The Medicines Company v. Mylan, Inc. (Fed. Cir. 2017)

By Kevin E. Noonan --

The Federal Circuit returned to its consideration of the outcome in the District Court of The Medicines Company's ANDA litigation against Mylan and Bioniche Pharma over a proposed generic version of Medicines' bivalirudin drug (sold as Angiomax®), an anticoagulant used in heart surgery.  In doing so, the Court focused on claim construction, basing its decision to reverse a finding of infringement under 35 U.S.C. § 271(e)(2) on differences with the District Court's claim construction.

The invention claimed in the patents-in-suit, U.S. Patent Nos. 7,582,727 and 7,598,343, can be appreciated by the following representative claims:

Claim 1 of the '727 patent:

1.  Pharmaceutical batches of a drug product comprising bivalirudin (SEQ ID NO: 1: [Phe Pro Arg Pro Gly Gly Gly Gly Asn Gly Asp Phe Glu Glu Ile Pro Glu Glu Tyr Leu]) and a pharmaceutically acceptable carrier for use as an anticoagulant in a subject in need thereof, wherein the batches have a pH adjusted by a base, said pH is about 5-6 when reconstituted in an aqueous solution for injection, and wherein the batches have a maximum impurity level of Asp9-bivalirudin that does not exceed about 0.6% as measured by HPLC.

Claim 1 of the '343 patent:

1.  Pharmaceutical batches of a drug product comprising bivalirudin ... prepared by a compounding process comprising:
    (i) dissolving bivalirudin in a solvent to form a first solution;
    (ii) efficiently mixing a pH-adjusting solution with the first solution to form a second solution, wherein the pH-adjusting solution comprises a pH-adjusting solution solvent; and
    (iii) removing the solvent and pH-adjusting solution solvent from the second solution;
    wherein the batches have a pH adjusted by a base, said pH is about 5-6 when reconstituted in an aqueous solution for injection, and wherein the batches have a maximum impurity level of Asp9-bivalirudin that does not exceed about 0.6% as measured by HPLC.

The patents-in-suit arose from Medicines' solution to production problems with the drug, which led to the production of a degradation product, Asp9 bivalirudin (caused by deamination of Asn9); in high enough concentrations (>1.5%) Asp9 bivalirudin contaminants were unacceptable (per FDA).  Production of bivalirudin batches contaminated with high levels of Asp9 bivalirudin caused Medicines to shut down commercial production for more than a year.  The company's attempts to produce formulations of the drug for commercial sale were unsuccessful, and led Medicines to develop certain ways of adjusting the pH that reduced the impurity levels to less than 0.6% and resulted in the '343 and '727 patents.

These patents were the subject of litigation between Medicines and Hospira, where coincidentally the same panel that rendered the instant decision determined that the claims were invalid under the on-sale bar of 35 U.S.C. § 102(b)(among other grounds) (see "The Medicines Company v. Hospira (Fed. Cir. 2015)").  The Federal Circuit thereafter vacated the panel opinion and reinstituted the appeal en banc, ordering the parties (and amici) to brief issues relating to the on-sale bar and its application to the relationship between Medicines and its contract manufacturer.  The en banc court reversed the decision by the merits panel that the on-sale bar applied, in a unanimous court by Judge O'Malley (see "The Medicines Company v. Hospira, Inc. (Fed. Cir. 2016) (en banc)").

The Federal Circuit (which had dismissed Medicines' and Mylan's cross-appeals in view of the merit panel's decision in the Hospira case) then reinstated this appeal between Medicines and Mylan.  The District Court had granted summary judgment of non-infringement to Mylan as to the claims of the '343 patent, based on Mylan's ANDA specifying methods for formulating that did not use the claimed "efficient mixing" limitation of that patent's claims.  After a bench trial, the District Court had granted judgment in Medicines' favor, expressly because the '727 patent claims did not recite the "efficient mixing" limitation.

The Federal Circuit affirmed the District Court's summary judgment decision regarding the '343 patent claims, but reversed the judgment regarding the '727 patent claims, in an opinion by Judge Dyk joined by Judges Hughes and Wallach.  The Court expressly based its decision on construction of the term "batches" in the '727 patent claims, which required the use of efficient mixing methods as disclosed in the specification shared in common by both patents.  This specification defined "batches" as:

As used here, "batch" or "pharmaceutical batch" refers to material produced by a single execution of a compounding process of various embodiments of the present invention.  "Batches" or "pharmaceutical batches" as defined herein may include a single batch, wherein the single batch is representative of all commercial batches (see generally, Manual of Policies and Procedures, Center for Drug Evaluation and Research, MAPP 5225.1, Guidance on the Packaging of Test Batches at 1), and wherein the levels of, for example, Asp9-bivalirudin, total impurities, and largest unknown impurity, and the reconstitution time represent levels for all potential batches made by said process.  "Batches" may also include all batches prepared by a same compounding process.

The District Court construed the term "pharmaceutical batches" consistent with specification, to be either a single batch representative of all commercial batches "made by a compounding process" having consistent levels of all impurities (including Asp9-bivalirudin) or all batches made by the compounding process; the Federal Circuit opinion notes that the parties consented to this construction.  With regard to the term "efficient mixing," the District Court based its construction on two examples in the common specification:  one the "inefficient" mixing according to earlier Medicines' processes (Example 4), and the efficient process disclosed in the specifications (Example 5); the District Court further held that Medicines had disclaimed the old inefficient mixing process.

With regard to its review of claim construction, the opinion notes that claim construction here is reviewed as a matter of law because the District Court did not consider anything outside the intrinsic evidence, under the Supreme Court's Teva Pharmaceuticals v. Sandoz decision.  The panel based its contrary decision on the District Court's failure to interpret the "batches" limitation to require efficient mixing for the claims of the '727 patent.  The panel's rationale was that the "batches" limitation requires the claims to encompass only those having impurity levels less than 0.6%, and that this limitation cannot cover individual batches because it was undisputed that such batches were known in the prior art (i.e., batches Medicines made prior to the disruption that led to this invention).  The opinion states:  "[r]ather, properly construed, what the batches limitation requires is the use of a process that achieves batch consistency," expressly construing the "batches" claim limitation in view of the specification.  "The batches limitation therefore requires a process that achieves consistency between batches produced from the 'same compounding process'—i.e., batch consistency," said the Court.  Indeed, the panel viewed this consistency as being what distinguished these claims from the prior art (including Medicines' own prior methods and batches).  Without tying the interpretation of the term "batches" to the disclosed more efficient methods, the opinion asserts that there would be no way of effectively deciding when and whether infringement would lie.  The opinion foresees a need for "forward-looking assessments of whether future batches would infringe" (i.e., only after the batches were tested to determine the level of Asp9-bivalirudin levels).  According to the opinion:

To illustrate, if a defendant using the same compounding process produced fifty batches each having an Asp9 level below 0.6 percent, each of those fifty batches would infringe.  But the defendant would not know whether any of the batches infringed until all fifty batches had been produced because if even one of those batches was determined to have an Asp9 level higher than 0.6 percent, none of the batches would infringe.

In this regard, the opinion posits that such an interpretation would not provide the "reasonable certainty" required by Nautilus, Inc. v. Biosig Instruments, Inc., 134 S. Ct. 2120, 2129 (2014).

The opinion further found support for the Court's interpretation in the specification and prosecution history (particularly with regard to the claims patentability over inter alia the Medicines' own prior art).

Having determined that proper construction of the "batch" limitation required the use of a compounding process that achieves batch consistency, the opinion then turned to whether this compounding process must entail "efficient mixing."  Evidence for this requirement the Court found in the specification, particularly disclosure that "pH-adjusting solution will be efficiently mixed," and that "[e]fficient mixing of the pH-adjusting solution . . . will minimize levels of Asp9-bivalirudin."  Moreover, the Court states that the specification disclosed no other method capable of producing such batches with the necessary consistency (relating to the comparison between the methods disclosed in Examples 4 and 5).  The opinion also asserted that the District Court's determination that Medicines disclaimed inefficient mixing was not inconsistent with its determination that what the claims required was efficient mixing.

The opinion also rejected Medicines' contention that this interpretation would make the claims of the '343 patent "superfluous" (more accurately, implicate double patenting) by noting there may be overlap between certain of the claims but that the more specific recitations in the '343 claims distinguished them from the '727 claims.  The opinion also asserted that adopting Medicines' construction would potentially encompass the prior art, and thus impermissibly extending Medicines' "monopoly" beyond the invention disclosed in the common specification.

The Court then turned to what is meant by "efficient mixing."  This term is explicitly defined in the common specification to mean "'mixing [that] is characterized by minimizing levels of Asp9-bivalirudin in the compounding solution,' i.e., below 0.6 percent Asp9-bivalirudin in the intermediate solution."  The panel rejected this interpretation, insofar as "it does not accord with the linguistic formula used by the patentee to signal the designation of other defined terms—including 'batches.'"  By this it appears the Court meant to distinguish between how this statement was phrased and how other terms were expressly defined, i.e., where "the defined term [is] in quotation marks, followed by the terms 'refers to' or 'as defined herein.'"  The Court also rejected Medicines' assertion that its phrase was definitional on the basis that is was "a mere recitation of the results obtained" rather than constituting a definition of what "efficient mixing" is, according to the opinion.  Using Medicines' definition "would expand the scope of 'efficient mixing' to cover any way of mixing that achieves a compounding solution having an Asp9 level of less than 0.6 percent" in violation of the written description requirement, said the panel, citing Ariad Pharms., Inc. v. Eli Lilly & Co., 598 F.3d 1336, 1352–53 (Fed. Cir. 2010) (en banc).  The Court found no art-recognized definition of the term "efficient mixing," and the other portions of the specification Medicines' argued disclosed alternative methods were "vague and unhelpful" (and were not relied upon by the District Court or the parties).  Finally, the opinion (relying with some irony on Medicines' criticism of the District Court for defining "efficient mixing" with regard to what it is not, i.e., prior art methods) notes that the skilled artisan would rely upon the methods recited in Example 5 to understand what efficient mixing is.  In the Court's opinion, this Example is the only description of efficient mixing in the specification and not just an embodiment.  According to the panel, this Example provides "a clear 'objective standard by which to measure the scope of the term.'"

The opinion concluded that, in order to infringe a batch must be compounded using a efficient mixing process according to Example 5 for claims of either the '727 and '343 patents.

There is some logic underlying this decision, but it can be understood if Medicines' views the Federal Circuit's logic as imposing a definition from the specification onto the claims, contrary to the claim construction rubric that limitations should not be incorporated from the specification into the claims.  This aspect of the decision brings to mind District Court Judge Vaughn Walker's discussion of how vexatious this rule can be, as set forth his dissent in Medegen MMS, Inc. v. ICU Medical, Inc. (Fed. Cir. 2008):

The issues before the Court presented "a conundrum often faced by district courts when construing" claim terms, citing the "twin axioms" of claim construction that produced the conundrum:  "[o]n the one hand, claims 'must be read in view of the specification'," citing Markman, while "[o]n the other hand, it is improper to read a limitation from the specification into the claims," citing Arlington Indus. Inc. v.  Bridgeport Fittings, Inc.  The problem with these axioms, according to Judge Walker, is that "the axioms themselves seldom provide an answer, but instead merely frame the question to be resolved."

"As a jurist more accustomed to working on the front lines of patent litigation than reviewing decisions from above, it is my experience that claim construction -- determining how one of ordinary skill in the art would understand the patent at the time of invention -- often requires making fact-like determinations not well suited to appellate review."

The Supreme Court's decision in Teva v. Sandoz reversed the Federal Circuit's practice of giving no deference to factual underpinnings of claim construction as set forth in Cybor Corp. v. FAS Technologies, Inc.  The instant decision shows that while the problems attendant upon failure to give factual deference have been diminished they have not been overcome entirely.

The Medicines Company v. Mylan, Inc. (Fed. Cir. 2017)
Panel:  Circuit Judges Dyk, Wallach, and Hughes
Opinion by Circuit Judge Dyk

Los Angeles Biomedical Research Institute v. Eli Lilly & Co. (Fed. Cir. 2017); Eli Lilly & Co. v. Los Angeles Biomedical Research Institute (Fed. Cir. 2017)

By Kevin E. Noonan --

The Federal Circuit handed down two related opinions last week, Los Angeles Biomedical Research Institute v. Eli Lilly & Co. and Eli Lilly & Co. v. Los Angeles Biomedical Research Institute, one of which raised the question of whether (and when) it is appropriate for the Court to remand decisions of the Patent Trial and Review Board (PTAB) rendered under the post-grant provisions of the Leahy-Smith America Invents Act (AIA).

The case arose as an inter partes review (IPR) before the PTAB, wherein the Board held all claims of U.S. Patent No. 8,133,903 to be obvious.  The claims were directed to methods for treating ("arresting or regressing") penile fibrosis.  This condition has two forms:  penile tunical fibrosis, where excess collagen builds up in the tunica albuginea (a membrane surrounding the corpora cavernosa, the chambers that fill with blood during an erection), and corporal tunica fibrosis, where excess collagen builds up in the corpora cavernosa itself.  The claimed treatment is daily administration of type 5 phosphodiesterase (PDE5) inhibitors, said treatment being characterized as "long term" in the opinion.  The class of PDE5 inhibitors includes drugs like sildenafil (Viagra^®) and tadalafil (Cialis^®), well-known erectile dysfunction treatments; while penile fibrosis can cause erectile dysfunction, the disease is distinct from other causes of ED.

Claim 1 of the '903 patent is representative:

1.  A method comprising:
    a) administering acyclicguanosine3',5'-monophosphate (cGMP) type 5 phosphodiesterase (PDE5) inhibitor according to a continuous long-term regimen to an individual with at least one of a penile tunical fibrosis and corporal tissue fibrosis; and
    b) arresting or regressing the at least one of the penile tunical fibrosis and corporal tissue fibrosis, wherein the PDE- 5 inhibitor is administered at a dosage up to 1.5 mg/kg/day for not less than 45 days.

Eli Lilly petitioned for an IPR after the Los Angeles Biomedical Research Institute (LAB) sued for infringement over the company's marketing of Cialis^® for the treatment of penile fibrosis.  The Board instituted an IPR on two grounds:  anticipation (reviewed on appeal in a separate decision captioned Eli Lilly & Co. v. Los Angeles Biomedical Research Institute) and obviousness as reviewed in this opinion.  The Board found the claims obvious based on teaching that PDE5 inhibitors can be used for treating ED (which the Board construed as including penile tunical fibrosis and corporal tissue fibrosis); that ED is a disease associated with aging and, inter alia, atherosclerosis (associated in turn according to the Board with corporal fibrosis), and that long term treatment (at least 45 days) with up to 1.5 mg/kg/day (~100 mg for an average-sized adult male) was effective for treating ED caused by "diabetes, atherosclerosis, smoking, hypertension, or a combination of such factors."  The Board rejected LAB's contention that treatment with PDE5 was thought in the art to exacerbate rather than ameliorate penile fibrosis.

The Federal Circuit vacated and remanded, in an opinion by Judge Bryson joined by Judge Moore; Judge Newman concurred in part but dissented from the judgment.  The Court first rejected LAB's claim of priority, based on failure to disclose dosages of up to 1.5 mg/kg/day in its the earliest-filed provisional application.  This portion of the opinion considers whether disclosure regarding administration of PDE5 inhibitors to rats at a specific concentration (100 mg/L) would have been understood by a person having ordinary skill in the art to be equivalent to 1.5 mg/kg/day for an adult human male and the Court's opinion that it would not.  Indeed, any such "knowledge" by a skilled person would have been based on speculation, which cannot satisfy the written description requirement according to the panel, citing Lockwood v. Am. Airlines, Inc., 107 F.3d 1565, 1572 (Fed. Cir. 1997) .

The panel then addressed the Board's claim construction, finding that the Board had "read out of the claim" the limitation of "an individual with at least one of penile tunical fibrosis and corporal tissue fibrosis" by interpreting that phrase to mean "an individual hav[ing] symptoms that may be associated with penile fibrosis, such as [erectile dysfunction], but not that the patient be specifically diagnosed as having penile tunical fibrosis or corporal tissue fibrosis."  According to the opinion, the patent specification makes clear that "penile fibrosis may result in erectile dysfunction, but it may not" and "erectile dysfunction has alternative causes and may present without underlying penile fibrosis."  The patent claims are directed to methods for treating penile fibrosis whether or not it results in the symptoms of erectile dysfunction, and thus the Board wrongly construed this term according to the opinion.  The panel found support for its view on the correct claim construction of this term from the Court's decision in Rapoport v. Dement, 254 F.3d 1053 (Fed. Cir. 2001), where, analogously, claims for treating sleep apnea were not directed to treating the symptoms of sleep apnea.  Accordingly, the Federal Circuit found that the Board had not adopted the broadest reasonable interpretation of the claims but rather an overbroad interpretation.

Similarly, the opinion rejected the Board's determination that the limitation "arresting or regressing the at least one of the penile tunical fibrosis and corporal tissue fibrosis" is entitled to no patentable weight, as being merely a statement of intended results of PDE5 inhibitor administration according to the claims.  The opinion based this conclusion on the placement of the limitation in the structure of the claim, not as part of a preamble but as an affirmatively recited element.  In addition, the Court found "[o]ther intrinsic evidence" (and thus appropriately subjected to de novo review) that distinguishes the phrase as it is used in these claims from situations where such limitations are present in preambles or "wherein" clauses; this conclusion is supported by examples of efficacy set forth in the specification.

The Court concluded its review of the Board's claim construction by rejecting LAB's contention that the claim term "continuous long-term regimen" adds an additional limitation regarding steady state plasma concentration or constant dosing level in vivo, because the argument was not supported by the intrinsic evidence from the specification or prosecution history or extrinsic evidence from expert testimony.

Turning to the Board's conclusion that the claims were obvious, the panel vacated the judgment based on its conclusions regarding the Board's improper claim construction.  Specifically, while the Board found that it would have been obvious to combine the teachings of three prior art references to arrive at a method for treating ED, "[w]hat the Board did not do [] was to find that those references taught treating a patient with penile tunical fibrosis or corporal tissue fibrosis" nor that the references would have provided the skilled worker with a reasonable expectation of success for treating these conditions.  The panel also found wanting reliance on references that taught "on-demand" dosing to support obviousness of claims that recited "long-term daily treatment" with PDE5 inhibitors.

The Board also erred in rejecting LAB's evidence that the prior art taught that long-term treatment with PDE5 inhibitors was thought to be detrimental because it would increase fibrosis by stimulating nitric oxide production as understood in the art.

Accordingly, the panel's ruling was that:

The question remains whether a person of skill in the art would have had a reason to combine [the three cited references] to treat penile fibrosis with a long-term regimen of a daily dosage of a PDE5 inhibitor, and would have had a reasonable expectation of success from doing so.  Because the Board's obviousness analysis was based on an erroneous construction of the claim language and an overly broad interpretation of [one of the references], and because the Board did not address the record evidence summarized above, we remand for the Board to make new findings as to whether there was an apparent reason to combine the prior art references and whether that combination would have rendered obvious the long-term administration of PDE5 inhibitors to treat penile fibrosis.

The opinion also mandates that on remand the Board "make the findings necessary to determine whether the references render the 'arresting or regressing' limitation obvious, but affirmed the Board's finding that the dosage limitation ("up to 1.5 mg/kg/day for not less than 45 days") is disclosed in the prior art.

Judge Newman dissented because she believed the Board had established obviousness.  In addition, however, she voiced her belief that remand was inappropriate and contrary to the IPR provisions of the AIA.  In her view:

The America Invents Act was enacted to remedy the lack of expedition and to add predictability in infringement disputes, by assigning to an expert administrative tribunal and presumed expert federal court the resolution of some major patentability issues, with tight procedural rules and deadlines.  It was expected that in the normal course questions of patentability under Section 102 and 103 would be reliably and speedily resolved.  Implementing this policy, when we find analytic lapses by the PTAB, it appears that the statute contemplates that we will make the determination, on the record that was made at the Board.  Indeed, the depth of briefing by the parties suggests that this was their understanding, too.

Remands are contrary to this understanding of the intent of Congress in enacting the IPR provisions of the AIA, and thus while Judge Newman does not believe remands are never appropriate, they should be rare.

In the companion case, the Federal Circuit affirmed the Board's determination that the asserted reference (International Publication No. WO 01/80860) did not anticipate the claims, because it did not disclose the limitation that PDE5 inhibitors be administered "at a dosage up to 1.5 mg/kg/day for not less than 45 days."  While conceding that the reference might "suggest" long-term dosing, the panel held that such suggestion is not enough to satisfy the anticipation standard, citing AstraZeneca LP v. Apotex, Inc., 633 F.3d 1042, 1055 (Fed. Cir. 2010), in support of its interpretation.

Los Angeles Biomedical Research Institute v. Eli Lilly & Co. (Fed. Cir. 2017)
Panel: Circuit Judges Newman, Bryson, and Moore
Opinion by Circuit Bryson; opinion concurring in part, dissenting from the judgment by Circuit Judge Newman

Eli Lilly & Co. v. Los Angeles Biomedical Research Institute (Fed. Cir. 2017)
Panel: Circuit Judges Newman, Bryson, and Moore
Opinion by Circuit Judge Newman

Shire Development LLC v. Watson Pharmaceuticals Inc. (Fed. Cir. 2017)

By Kevin E. Noonan --

The Federal Circuit, in its third opinion involving ANDA litigation between these parties over Shire's LIALDA^® (mesalamine) product, has apparently brought this case to a close in generic drug maker Watson's favor, in a decision handed down last Friday.

The lawsuit involved Watson's ANDA filing seeking approval for a generic version of Shire's controlled-release oral pharmaceutical composition for the treatment of inflammatory bowel disease, Crohn's disease, and ulcerative colitis, sold by Shire under the brand name LIALDA®.  Shire listed U.S. Patent No. 6,773,720 in the Orange Book having claims for its patented formulations of the active pharmaceutical ingredient mesalamine (5-amino salicylic acid).  These formulations were characterized as having high concentrations (85-90% by weight) of the API.  The formulations contain an "inner hydrophobic matrix" and an "outer hydrophilic matrix," as used in the following representative claims of the '720 patent:

1.  Controlled-release oral pharmaceutical compositions containing as an active ingredient 5- amino-salicylic acid, comprising:
    a) an inner lipophilic matrix consisting of sub- stances selected from the group consisting of unsaturated and/or hydrogenated fatty acid, salts, esters or amides thereof, fatty acid mono-, di- or triglycerid[e]s, waxes, ceramides, and cholesterol derivatives with melting points below 90° C., and wherein the active ingredient is dispersed both in said the lipophilic matrix and in the hydrophilic matrix;
    b) an outer hydrophilic matrix wherein the lipophilic matrix is dispersed, and said outer hydrophilic matrix consists of compounds selected from the group consisting of polymers or copolymers of acrylic or methacrylic acid, alkylvinyl polymers, hydroxyalkyl celluloses, carboxyalkyl celluloses, polysaccharides, dextrins, pectins, starches and derivatives, alginic acid, and natural or synthetic gums;
    c) optionally other excipients;
    wherein the active ingredient is present in an amount of 80 to 95% by weight of the total composition, and wherein the active ingredient is dispersed both in the lipophilic matrix and in the hydrophilic matrix.

The claimed formulations provide the "sustained and uniform manner" by which the mesalamine API is released as the drug passes through the gut.

In the first trial on the merits, the District Court construed the term "inner hydrophobic matrix" to mean "a matrix including at least one lipophilic excipient, where the matrix is located within one or more substances," and construed "outer hydrophilic matrix" to mean "a matrix of at least one hydrophilic excipient, where the matrix is located outside the inner lipophilic matrix."

On appeal the Federal Circuit reversed, holding that these constructions did not comport with the "ordinary and customary" meanings of the claim terms because they were "impermissibly broad."  Specifically, that panel held that the District Court had properly construed the term "matrix" in each instance as "a macroscopically homogeneous structure in all its volume," but disagreed with how the court construed "lipophilic matrix" to mean "a matrix that includes at least one lipophilic excipient."  This error arose because the District Court's construction "focuse[d] on the lipophilic properties of an excipient in the matrix, rather than the properties of the matrix itself."  That panel believed that the intrinsic evidence mandated a construction wherein lipophilicity (or, for that matter the hydrophilicity) is a characteristic of the matrix, not the excipient in the matrix, according to distinctions found in the specification.

Shire petitioned for certiorari and the Supreme Court vacated this decision and remanded to the Federal Circuit for reconsideration in view of the Court's intervening decision in Teva Pharmaceuticals USA, Inc. v. Sandoz, Inc.  In that case, the Court set forth the standard of Federal Circuit review of district courts' claim construction, changing the completely de novo standard of Fas v. Cybor to one wherein questions of law are to be reviewed de novo but factual determinations of a district court should be reviewed for clear error, i.e., giving deference to the district court's factual findings pursuant to Federal Rule of Civil Procedure 52(a)(6).  Notably, this change was not mandated for cases where a district court relied solely on the intrinsic evidence (plain meaning of the claim language, the specification and the prosecution file history).  On remand, the Federal Circuit saw fit not to change its earlier determination that the District Court had erred (based on its determination that the District Court had relied only on intrinsic evidence) and remanded the matter to the District Court for trial according to that panel's claim construction.

This appeal is the result of that trial, wherein the District Court again found infringement under 35 U.S.C. § 271(e)(2).  And once again the Federal Circuit reversed, in an opinion by Judge Hughes, joined by Chief Judge Prost and Judge Taranto.  In this opinion, the panel focused on the Markush groups recited in the claims ("selected from the group consisting of"; see Ex parte Markush, 1925 C.D. 126 (Comm'r Pat. 1925) and MPEP 803.02), which format the opinion noted was relevant to the opinion because, in its earlier claim construction they formed the basis for the Court's determination that "'the correct construction requires that the inner volume contain substances from the group described for the inner lipophilic matrix (which are all lipophilic substances), and that the outer volume separately contain substances from the group described for the outer hydrophilic matrix (which are all hydrophilic).'"  The District Court here found that the presence of components of the lipophilic and hydrophilic matrices comprising Watson's formulation falling outside the scope of the Markush groups did not bar infringement because these components were "'unrelated' to the invention because they did not drive the water-affinity property of their respective matrices."  In some instances, permitting unrelated components to be present in an invention claimed using Markush group language is permissible, according to the opinion, provided that these are related to "aspects unrelated to the invention," citing Norian Corp. v. Stryker Corp., 363 F.3d 1321, 1331 (Fed Cir. 2004).  Here, however, Watson's formulation "does not facially satisfy the claim 1(b) Markush limitation," according to the opinion, because the extragranular space comprising the outer hydrophilic matrix contains lipophilic magnesium stearate, a component not recited in the claim 1(b) Markush group.

Specifically, the Federal Circuit rejected the District Court's distinction that "magnesium stearate in the extragranular space is overwhelmed by the hydrophilic properties of the sodium starch glycolate in the extragranular space" based in part on expert testimony that the hydrophilic "'sodium starch glycolate is more potent than the mag[nesium] stearate" when "outside" the granules.'"  Indeed, the District Court found (and the Federal Circuit agreed) that magnesium stearate "retained its lipophilic character in the extragranular space" to the same extent that it exerted a lipophilic effect in granules.  On that basis, the panel held that the compound "structurally and functionally" is related to the invention as claimed and thus violates the Markush group of claim 1(b), which does not recite magnesium stearate as a member thereof.  In doing so, the panel rejected Shire's contention (adopted by the District Court) that magnesium stearate in Watson's formulation was used as a lubricant and not for its lipophilic properties and was not lipophilic enough to render the outer matrix lipophilic.  According to the opinion, Norian did not impose a requirement that related components were only those that "advance or are intended to advance" the inventive elements recited in a Markush group, on the grounds that such a requirement would be equivalent to construing "consisting of" in the Markush language to have a scope of "comprising" or "consisting essentially of" (the latter phrasing being most closely related to the scope that Shire advanced in its claim construction arguments).

The Court remanded with directions to enter judgment of non-infringement, thus putting Watson in the position to be able to market its generic mesalamine formulation (the Hatch-Waxman 30-month stay having expired long ago).  Shire may still appeal, either by requesting rehearing en banc or filing another certiorari petition.  Insofar as the Federal Circuit's opinion is based on the District Court's factual findings (supported by expert testimony) cert. is not a foregone conclusion.  It will depend on whether Shire can convince the Justices that the Federal Circuit has not minded the High Court's lessons regarding claim construction.  Perhaps needing to delve into the minutiae of Markush claiming will be enough to deter the Court from revisiting this aspect of claim construction so soon after its Teva decision (similar to the Court refusing to grant cert. in the Sequenom case after its recent spate of diagnostic method claim cases).  But this case provides a reminder of the tortured path litigants may need to take to get what presumably is a final outcome, and the uncertainty that persists until entry of a final judgment from which there is no further appeal.

Shire Development LLC v. Watson Pharmaceuticals Inc. (Fed. Cir. 2017)
Panel: Chief Judge Prost and Circuit Judges Taranto and Hughes
Opinion by Circuit Judge Hughes

Roxane Laboratories, Inc. v. Camber Pharmaceuticals Inc. (Fed. Cir. 2016)

By Kevin E. Noonan --

The patent prosecutor's art requires exquisite foresight, if not prescience, in balancing the requirements for specificity needed to satisfy the disclosure requirements of § 112 while anticipating efforts to design around the claimed invention.  In a recent nonprecedential opinion, the Federal Circuit illustrated the consequences when these efforts prove inadequate, in Roxane Labs., Inc. v. Camber Pharm. Inc.

The case involved Roxane's U.S. Patent No. 8,563,032 ("the '032 patent"), which was directed to "a capsule formulation of calcium acetate granules, with each capsule containing a dose of 667 mg calcium acetate on an anhydrous basis."  The claimed formulations are used to treat end-stage kidney disease characterized by excess serum phosphorous levels, wherein the calcium acetate binds dietary phosphorus and prevents absorption by the gastrointestinal tract.  Claim 1 is representative:

A calcium acetate capsule formulation comprising flowable granules comprised of a pharmaceutically acceptable amount of calcium acetate along with other pharmaceutically acceptable adjuvants, wherein said granules are filled into and contained within a pharmaceutically acceptable capsule such that 667 mg of said calcium acetate on an anhydrous basis are present in said capsule that is size 00 or less.

It was undisputed that Camber's accused infringing article used capsules of size 00el, which had the same diameter but an elongate longitudinal profile.  The District Court construed the claims to be limited to "standard" size 00 capsules and that Camber's 00el capsules were outside the scope of the claims as the court construed them.  After claim construction Roxane sought and received a directed verdict, to pursue its appeal of the District Court's claim construction.

The Federal Circuit affirmed, in an opinion by Judge Lourie joined by Judges Mayer and O'Malley.  The panel found that the District Court properly relied on solely intrinsic evidence (and thus reviewed claim construction de novo), based on both the explicit disclosure in the specification and the prosecution history, specifically declaration evidence from one of the named inventors.

Regarding the disclosure, the Federal Circuit held that as used in the specification the term "size 00" was limited to standard length capsules and not the elongated 00el capsules used by Camber.  As the opinion characterizes the parties' differing positions, "[t]he main dispute in this appeal is whether 'size 00' in the '032 patent refers to a capsule of a specific diameter, length, and fill volume, or to a family of capsules with the same diameter but varying lengths and fill volumes."  The panel based its conclusion on the mere two instances in the specification of the term "size 00," which according to the opinion contained disclosure regarding the amount of calcium acetate the capsule can contain.  Because size 00el capsules should contain more calcium acetate than size 00 capsules (because while having the same diameter the capsules have different lengths and thus volumes that differ by πr² (l_ooel-l_oo)), Roxane's argument that the term "size 00" capsule should encompass size 00el capsules was inconsistent with statements in the specification regarding the content by weight of calcium acetate in the claimed formulation.

The prosecution history supported this conclusion.  As set forth in the opinion, the Examiner had rejected the claims based on prior art regarding size 0 capsules filled with compressed anhydrous calcium acetate and art that taught calcium acetate granules; also cited was a prior art table of capsule sizes (which did not list any elongated capsule sizes).  Roxane argued that statements by the Examiner that the amount of calcium acetate contained in size 00 capsules was 50% greater than in size 00 capsules encompassed size 00el capsules, because as it turns out size 00el capsules contain exactly 50% more calcium acetate than size 0 capsules.  The panel disagreed, finding that the evidence in the prosecution history showed the Examiner relied on the capsule size table only with regard to size 00 capsules and not the elongated variant.

This conclusion was supported, according to the Federal Circuit, by statements in the inventor's declaration provided during appeal of this obviousness rejection before the Patent Trial and Appeal Board.  In that appeal, the inventor stated that the prior art granules could not be filled in size 00 capsules in the amounts required by the claims.  The opinion interprets these statements as indicating that "size 00 capsules" had a specific and determined volume and that these statements were not consistent with the term comprising a family of capsules of constant diameter but differing lengths (and hence volumes).  In addition, in a Reply brief filed in the PTAB appeal Roxane had "emphasized that claim 1 does not cover capsules that are larger and have more fill capacity than 'size 00'" and that the volumes contained in the claimed capsules differed from what was possible in capsules that could be prepared according to the prior art.  These arguments were persuasive before the Board.  The Federal Circuit thus concluded that "size 00el capsules, which have a greater fill volume than the standard size 00 capsules tested by [the inventor], are outside the scope of the claims" and thus the District Court properly construed the claims to exclude the accused infringing article.

The appeal also contained a challenge by Roxane that the case should not have been transferred from a district court in the Sixth Circuit to a district court in the Third Circuit, but could not show any abuse of the court's broad discretion to transfer.

Assuming that size 00el capsules were known in the art (it seems evident that they were), Roxane's failure to preclude Camber from designing around their claims by changing the length of the claimed capsules suggests that these embodiments were not contemplated by the inventors or their counsel.  The outcome of this case shows how difficult it can be to envision all the ways a clever competitor can find embodiments of a claimed invention that falls outside the scope of the claims, and that as a result the protection assumed to be provided by the patent may ultimately fall short of what the patentee needs to protect its franchise.

Roxane Labs., Inc. v. Camber Pharm. Inc. (Fed. Cir. 2016)
Nonprecedential disposition
Panel: Circuit Judges Lourie, Mayer, and O'Malley
Opinion by Circuit Judge Lourie

Massachusetts Institute of Technology v. Shire Pharmaceuticals, Inc. (Fed. Cir. 2016)

By Kevin E. Noonan --

The Federal Circuit recently affirmed a district court's claim construction and determination that claim terms were not indefinite in Massachusetts Institute of Technology v. Shire Pharmaceuticals, Inc.

The case involved U.S. Patent Nos. 5,770,193 and 5,759,830, directed to three-dimensional scaffolds for growing cells in vitro for in vivo organ culture.  In the prior art, in vitro cell growth for in vivo organ culture was performed using either permanent synthetic polymer scaffolds or biodegradable scaffolds (the latter being comprised typically of collagen).  The limitations of the prior art included the permanence of the scaffold in the former and variability in degradation of the collagen scaffold.  Prior art scaffolds were also unsuitable for solid organs (liver, pancreas) due to limited diffusion into inner organ cells and resulting cell death.

The scaffolds of the '193 and '830 patents promoted vascularization that overcame the diffusion problem in the art, with the specification reciting that the scaffolding "must be 'shaped to maximize surface area to allow adequate diffusion of nutrients and growth factors to the cells.'"  The scaffolds of these patents permitted "a variety of organs, including skin, liver, kidneys, blood vessels, nerves, and muscles which functionally resemble the naturally occurring organ" to be produced.

Claim 1 is representative and illustrates (in italics) the claim terms at issue:

1.  A cell-scaffold composition prepared in vitro for growing cells to produce functional vascularized organ tissue in vivo, comprising:
    a fibrous three-dimensional scaffold composed of fibers of a biocompatible, biodegradable, synthetic polymer; and
    cells derived from a vascularized tissue attached in vitro to the surface of the fibers of the scaffold uniformly throughout the scaffold;
    wherein the fibers of the scaffold provide sufficient surface area to permit attachment in vitro of an amount of the cells effective to produce the functional vascularized organ tissue in vivo; wherein the fibers of the scaffold are spaced apart such that the maximum distance over which diffusion of nutrients and gases must occur through a mass of cells attached to the fibers is between 100 and 300 microns; and
    wherein the diffusion provides free exchange of nutrients, gases and waste to and from the cells uniformly attached to the fibers of the scaffold and proliferating throughout the scaffold in an amount effective to maintain cell viability throughout the scaffold in the absence of vascularization.

It was undisputed that Shire's accused infringing product, Dermagraft®, was "seeded with connective tissue cells called fibroblasts to grow the dermis (or inner) layer of skin for "the treatment of full-thickness diabetic foot ulcers."  And:

After seeding onto the Dermagraft® scaffold, "[t]he fibroblasts proliferate to fill the interstices of this scaffold and secrete human dermal collagen, matrix proteins, growth factors and cytokines, to create a three-dimensional human dermal substitute containing metabolically active, living cells."  Id.  The fibroblasts attach to the top, bottom, and sides of the fibers of the mesh scaffolding that, after implantation, is gradually absorbed by the surrounding tissue.

Shire argued that prosecution history disclaimer applied to the claim terms "vascularized organ tissue" and "cells derived from a vascularized tissue."  In particular, Shire pointed to changes in claim language necessitated by prior art rejections and declarations by the named inventors, including assertions regarding "the design of a polymer scaffold which provides adequate sites for attachment and growth of enough cells to survive and function in vivo yet does not limit survival and growth of cells adjacent to the matrix surface as cells increase in number in vitro."  The claims were granted after further extensive amendment and argument to recite the allowed claims.

The District Court rejected Shire's contention that, in view of statements during prosecution distinguishing the prior art on the grounds that said art was limited to skin grafts (based on the thickness limitations in the art), MIT's claims should be limited to non-skin organs with regard to both the terms at issue ("vascularized organ tissue" and "cells derived from a vascularized tissue").  The District Court also rejected Shire's assertions that the term "three-dimensional scaffold" was indefinite.  The District Court found the asserted claims of the '193 and '830 patents were not invalid and were infringed on stipulated final judgment.

The Federal Circuit affirmed, in an opinion by Judge Stoll, joined by Judges O'Malley and Chen; Judge O'Malley filed a concurring opinion.  Consistent with recent Federal Circuit precedent (Avid Tech., Inc. v. Harmonic, Inc., 812 F.3d 1040, 1045 (Fed. Cir. 2016), quoting Cordis Corp. v. Medtronic AVE, Inc., 339 F.3d 1352, 1359 (Fed. Cir. 2003), and citing Omega Eng'g, Inc. v. Raytek Corp., 334 F.3d 1314, 1323 (Fed. Cir. 2003)), the panel asserted that the standard for prosecution disclaimer was a stringent one, requiring such disclaimer to be "clear and unmistakable," citing Trivascular, Inc. v. Samuels, 812 F.3d 1056, 1063–64 (Fed. Cir. 2016).  With regard to the claim term "vascularized organ tissue," the District Court construed the term to include skin on the basis that the ordinary meaning of the word "organ" would include skin and that there was no clear and unmistakable disclaimer of this scope in the prosecution history.  The District Court also found, and the Federal Circuit agreed, that this use of the term was consistent with how the term was used in the '193 and '830 patent specifications.  (More tellingly, the District Court found that this interpretation of the term was consistent with the parties' Joint Technology Tutorial, which was provided to the District Court as "background" during claim construction.)  Neither the District Court nor the Federal Circuit was convinced by Shire's arguments to the contrary, which the panel opinion characterized as relying on "a single sentence" from an interview summary of the priority patent that ultimately resulted in the '193 and '830 patents, regarding claims that did not recite the "vascularized organ tissue" language.  "Reading the selected sentence in the context of the entire summary and the claim terms then at issue reveals that MIT emphasized the structure of the invention's scaffold, not the type of organ it can be used to grow," according to the panel opinion.  Also unavailing was Shire's citation of statements in an inventor (Dr. Vacanti) declaration, which the District Court found were not made to distinguish the claimed invention from prior art skin grafts but rather to emphasize the diffusion-related advantages of the claimed invention.  "In the context of the overall prosecution history, the isolated statements plucked from Dr. Vacanti's declaration do not meet the high standard for prosecution disclaimer to attach," according to the Court.

Both the District Court and the Federal Circuit were further convinced that the claims did not disclaim skin as an artificial organ falling within the scope of the claims because MIT attempted during prosecution to include this limitation but the Examiner rejected the amendment as being new matter (wherein thereafter MIT never reintroduced this limitation).  Relevant to this argument was also the fact that the claims at issue at that time contained an express organ thickness limitation and that the statements cited by Shire were used in relation to those limitations (which were not in the claims that issued in either the '193 or '830 patents).

With regard to the District Court's construction that the claim term "cells derived from a vascularized tissue" comprise both parenchymal and non-parenchymal cells, the Federal Circuit first noted that "[t]he claims themselves do not distinguish between parenchymal and non-parenchymal cells."  Further, even Shire's expert admitted that bone-forming cells (which are a type of parenchymal cells) fell within the scope of the '193 and '830 patent claims.  In addition to this "plain meaning" interpretation, the Court found that the specification(s) of these patents were consistent with the District Court's construction.  As with Shire's earlier arguments (regarding the ""vascularized organ tissue" term), the Court found the arguments related to parenchymal versus non-parenchymal cells were not supported by Shire's citation to portions of the prosecution history, and that a skilled worker "would not read MIT's statement made during prosecution of [a related] patent—and directed to very different claim language—as limiting the term 'cells derived from a vascularized tissue' to parenchymal cells."

Finally, the Federal Circuit reviewed the District Court's determination that the term "three-dimensional scaffold" was not indefinite.  Citing Nautilus, Inc. v. Biosig Instruments, Inc., 134 S. Ct. 2120, 2124 (2014), the opinion affirmed the District Court's construction according to the plain meaning of the words "three-dimensional" and the Court's reliance on a dictionary definition in rendering its decision.  In addition, the panel opinion stated, this "plain meaning" definition was supported by Shire's own expert.

Judge O'Malley concurred to address the question of whether the District Court's judgment was "final" (and thus ripe for appeal) without a determination of damages and the question of willful infringement.  According to Judge O'Malley, "[i]n Robert Bosch, LLC v. Pylon Manufacturing Corp., 719 F.3d 1305 (Fed. Cir. 2013) (en banc), we created a broad jurisdictional rule that excepts this court from the rules of finality followed by every other Article III court of appeals" in its interpretation of 28 U.S.C. § 1292(c)(2).  This interpretation, in addition to being contrary to the interpretation of the statute by all other circuits (and producing another special rule for patent cases disfavored by the Supreme Court), is contrary to "a strong congressional policy against piecemeal reviews, and against obstructing or impeding an ongoing judicial proceeding by interlocutory appeals."  It also results, according to Judge O'Malley, in disruption of district court proceedings and encourages "piecemeal" litigation practices, contrary to the Supreme Court's interpretation of the statute in other contexts.  Flanagan v. United States, 465 U.S. 259, 263–64 (1984).

Massachusetts Institute of Technology v. Shire Pharmaceuticals, Inc. (Fed. Cir. 2016)
Panel: Circuit Judges O'Malley, Chen, and Stoll
Opinion by Circuit Judge Stoll; concurring opinion by Circuit Judge O'Malley

LifeNet Health v. LifeCell Corp. (Fed. Cir. 2016)

By Kevin E. Noonan --

The complexities that can be attendant on defending against an infringement allegation, and the possibility that a straightforward path to non-infringement can be complicated by claim construction even for terms construed using their plain meaning, are illustrated in the Federal Circuit's opinion affirming a jury verdict of infringement in LifeNet Health v. LifeCell Corp.

The suit involved LifeNet's ("Net") allegation that LifeCell's ("Cell") sales of "[p]lasticized soft tissue grafts for transplant" for "medical, orthopedic, dental, and cosmetic surgery applications" infringed its U.S. Patent No. 6,569,200.  These grafts provide an alternative to freeze drying the tissue for transplantation (which was conventional art practice); instead, the water in the tissue is replaced with "biocompatible plasticizers" including, inter alia, glycerol.  Using the claimed grafts avoids rehydration from a freeze-dried state that raised problems in the art.

Claim 1 of the '200 patent is representative:

1.  A plasticized soft tissue graft suitable for transplantation into a human, comprising:
    a cleaned soft tissue graft having an internal matrix; and
    one or more plasticizers contained in said internal matrix;
    said one or more plasticizers are not removed from said internal matrix of said plasticized soft tissue graft prior to transplantation into a human.

Relevant to the Court's decision, the italicized limitation in the claim was added during prosecution to overcome prior art (Cavallaro reference, U.S. Patent No. 5,718,012) that disclosed using plasticizers to strengthen collagen threads but required that the plasticizer be removed before use.

The specification of the '200 patent states that while the glycerol or other plasticizer can be removed prior to implantation the removal step isn't required.  The physician has options:

(1) "direct implantation of the grafts without further processing following removal from the packaging";

(2) "implantation following a brief washing in sterile isotonic saline to remove any remaining traces of plasticizer associated with the immediate surfaces of the grafts"; or

(3) "implantation following an extended (approximately 1 hour) washing with sterile isotonic saline to remove as much plasticizer as possible."

Cell's accused infringing soft tissue grafts were preserved in a plasticizer ("Solution E") wherein the graft was soaked in saline for at least 2 minutes prior to use, a treatment that removes "significant amounts" of the plasticizers.

The District Court's claim construction was directed to the limitation (added during prosecution) that the plasticizers were "not removed" from the graft prior to use.  Net argued that some, but not all, of the plasticizer could be removed, while Cell argued that none of the plasticizer could be removed if infringement would lie.  According to the opinion, Cell argued that the term required that "no processing steps are taken, before transplantation into a human that result in any amount of the one or more plasticizers being taken out of the internal matrix of the plasticized soft tissue graft," while Net argued that the term meant the grafts were used "without complete replacement of the plasticizer or plasticizers in the internal matrix of the tissue graft prior to direct implantation into a human."  The District Court construed the claim using the plain meaning of the term, that "not removed" means 'no plasticizers are removed prior to transplantation.'"  To a jury, Cell presented evidence that "as much as 50% of the plasticizer in [its] products is removed during the [] saline rinse" in arguing its products did not infringe.  Net countered that the graft comprises an internal matrix from which the plasticizer is not removed by Cell's rinse (as required by the claim and based on expert testimony) and thus the limitation is met and Cell's accused articles infringed.  A jury decided that Cell infringed the asserted claims of the '200 patent, found Cell had not established its invalidity defenses, and awarded Net almost $34 million.  Cell appealed.

The Federal Circuit affirmed, in an opinion by Chief Judge Prost, joined by Judges Reyna and Chen.  Cell presented five arguments on appeal:  1) the jury (rather than the court) improperly resolved a dispute regarding the meaning of "not removed" in the claim; 2) no matter how the term is construed, Cell cannot be liable for direct infringement, because it is the physician or technician that prepares a graft for transplantation, not the company; 3) the claims are indefinite for reciting a "method of use" limitation in a claim to an apparatus, citing IPXL Holdings, LLC v. Amazon.com, Inc., 430 F.3d 1377 (Fed. Cir. 2005); 4) the District Court misconstrued the term "plasticized soft tissue graft" which, if properly construed, renders its products non-infringing; and 5) the claims are anticipated by U.S. Patent No. 4,357,274 or obvious over this reference and the knowledge of one having ordinary skill in the art.

Cell's claim construction argument regarding the meaning of the term "not removed" was that the legal dispute about the term's meaning was wrongly presented to the jury (insofar as the jury was required to determine the plain meaning of this term), citing O2 Micro International Ltd. v. Beyond Innovation Technology Co., 521 F.3d 1351 (Fed. Cir. 2008).  The Federal Circuit held that Cell had not requested further construction at trial and thus had not properly raised an O2 Micro issue.  The panel recognized that this term related to two types of removal:  how much of the plasticizer was removed, and from where it was removed (i.e., the "degree" of removal versus the locus of removal at the "internal matrix" of the tissue).  The opinion further recognized that Cell's argument on appeal was that the internal matrix was the same as the tissue graft, so that removal of the plasticizer from the "gaps and voids" of the tissue was the same as removal from the internal matrix.  Unfortunately for Cell, the Federal Circuit found that Cell did not "timely request modification of the district court's claim construction" and, moreover, argued throughout that the issue was one of fact rather than being a claim construction question.  On the merits, the Court noted (in a footnote) that the term was properly construed according to its plain meaning in light of disclosure in the specification, including that the graft could be briefly rinsed or washed for one hour prior to transplantation; presumably, these treatments also resulted in no removal of the plasticizer from the internal matrix.  Finally, on this issue the Court rejected Cell's attacks on Net's experts' trial testimony and particularly purported contradictions contained therein.  Accordingly, the Court held that there was substantial evidence supporting the jury's finding of infringement.

On the question of divided infringement or inducement of infringement, the panel held that "the non-removal limitation clarifies that the recited plasticizer has not been removed and, because the plasticizer is biocompatible, can remain in the internal matrix of the tissue graft during transplantation, i.e., it need not ever be removed."  As a limitation related to characterizing properties of the graft, rather than reciting a method step, the practice of this element required no action by a third party, and the Court affirmed the jury's finding of literal infringement liability on this basis (and the District Court's refusal to grant JMOL).

With regard to the IPXL issue (that it is improper for a claim to recite "method of use" limitations in a claim to an apparatus), the Court's determination regarding the non-removal limitation on the divided infringement question (that it recited a property of the tissue graft and not an affirmative limitation regarding steps to remove the plasticizer from the graft) was dispositive:  under this reading of challenged claims 1-4 there was no mixing of apparatus and method claims and thus the claims were not indefinite.

Cell's challenge to the District Court's construction of the term "plasticized soft tissue graft" was based on its assertion that in addition to interpreting the term to mean that the "water of hydration" in the tissue had been replaced by the plasticizer, the Court should have required that the graft was "'dehydrated' in the sense that the tissue can only have 'low residual moisture.'"  The Federal Circuit agreed with Net's position that the term "dehydration" "merely means that some of the water has been replaced with plasticizer," consistent with the District Court's construction and based on specific disclosure in the specification.

Finally with regard to Cell's invalidity arguments, the panel found substantial evidence supporting the jury's finding that the '274 patent did not anticipate the '200 patent's claims.  Specifically, based on conflicting expert testimony, the Court was persuaded that while the '200 patent disclosed methods for avoiding "significantly altering" the mechanical properties of the tissue graft, the methods disclosed in the '274 patent resulted in significant alternation of the mechanical properties of the tissue.  "The ultimate issue on this record was a classic factual dispute that the jury was free to resolve in LifeNet's favor," according to the opinion, citing Kinetic Concepts, Inc. v. Smith & Nephew, Inc., 688 F.3d 1342, 1361 (Fed. Cir. 2012).  Cell's obviousness arguments were similarly unpersuasive and the Federal Circuit upheld the District Court's denial of JMOL or a new trial on this issue.

LifeNet Health v. LifeCell Corp. (Fed. Cir. 2016)
Panel: Chief Judge Prost and Circuit Judges Reyna and Chen
Opinion by Chief Judge Prost

UCB, Inc. v. Yeda Research and Development Co. (Fed. Cir. 2016)

By Donald Zuhn --

Today, in UCB, Inc. v. Yeda Research and Development Co., the Federal Circuit affirmed the determination by the District Court for the Eastern District of Virginia that UCB's Cimzia® brand antibody does not infringe Yeda's U.S. Patent No. 6,090,923.  In affirming the District Court's grant of summary judgment of non-infringement, the Federal Circuit concluded that Yeda was estopped from including chimeric and humanized antibodies within the scope of the monoclonal antibodies claimed in the '923 patent.

The '923 patent is directed to a monoclonal antibody that binds a defined human cytotoxin.  Claim 1 is representative:

1.  A monoclonal antibody which specifically binds a human cytotoxin having a molecular weight of about 17,500 as determined by polyacrylamide gel electrophoresis, said cytotoxin being obtainable from stimulated human monocytes, said cytotoxin being further characterized by exhibiting a cytotoxic effect on cycloheximide-sensitized SV-80 cells and by being obtainable in a state of enhanced purity by adsorption of the cytotoxin from an impure preparation onto controlled pore glass beads, and subsequent desorption of the cytotoxin in a state of enhanced purity.

UCB filed suit against Yeda, seeking a declaration that its Cimzia® brand antibody does not infringe the '923 patent and a declaration that the '923 patent is invalid.  Yeda counterclaimed for infringement.  In support of its claim of infringement, Yeda argued that the claims of the '923 priority application should be construed to cover chimeric antibodies since chimeric monoclonal antibodies were known at the time the '923 priority application was filed.  UCB, however, argued that the prosecution history of the '923 patent prohibited coverage of chimeric antibodies.

During prosecution of the '923 patent, Yeda had argued that the term "monoclonal antibody" should encompass chimeric monoclonal antibodies, stating that "[w]e do not believe that the term necessitates that the monoclonal antibody be produced by the original hybridoma cell; the term should encompass chimeric monoclonal antibodies produced by a genetically engineered cell line," and noting that "Applicants are particularly interested in protecting chimeric forms of their anti-cytotoxin mouse monoclonal antibodies."  In support of its argument, Yeda filed a Declaration from Dr. Hartmut Engelmann, in which Dr. Engelmann cited two references that preceded the effective filing date of the '923 priority application and described mouse-human chimeric antibodies.  Yeda also presented new claims 45-48, which were directed to "rat, hamster and human antibodies and chimeras thereof" and to "chimeras of" mouse monoclonal antibodies.  The Examiner rejected the new claims for adding new matter, and Yeda cancelled all of the claims reciting chimeric antibodies.  Claim 41, which issued as claim 1 in the '923 patent, did not mention chimeric antibodies and had not been amended during prosecution to recite chimeric antibodies.

At trial, the District Court construed "monoclonal antibody," as used in the claims of the '923 patent, to mean "a homogenous population of a single type of antibody produced via hybridoma and not including chimeric or humanized antibodies."  In view of this construction, the District Court granted summary judgment of non-infringement to UCB, determining that the prosecution history of the '923 patent prohibited construction of claim 1 to cover humanized and mouse-human chimeric antibodies.

On appeal, Yeda argued that claim 1 had never been rejected on the ground of new matter, and that only the specific species claims (i.e., claims 45-48) had been rejected by the Examiner for containing new matter.  Yeda also argued that claim 1 does not recite any particular monoclonal antibody or species of chimera, and that the claim should not be limited to the examples in the specification.  While acknowledging that "Yeda is correct in that generic terms in claims are construed in light of that which is already known," the Federal Circuit noted that "the content of the specification and actions and arguments during prosecution must also be considered, in defining the scope of a generic term in a claim," and cited Advance Transformer Co. v. Levinson, 837 F.2d 1081, 1083 (Fed. Cir. 1988), for the proposition that "[p]ositions taken in order to obtain allowance of an applicant's claims are pertinent to an understanding and interpretation of the claims that are granted by the PTO . . . and may work an estoppel as against a subsequent different or broader interpretation."  The Court explained that (citations omitted):

During prosecution, Yeda submitted new claims specific to "rat, hamster and human antibodies and chimeras thereof" as well as claims specifically encompassing "chimeras of" mouse monoclonal antibodies and "nonmurine" monoclonal antibodies.  Yeda argued that its invention is not limited to murine antibodies to human cytotoxin, and "should encompass chimeric monoclonal antibodies produced by a genetically engineered cell line."  The Examiner rejected the proposed claims on the ground of new matter not supported in the specification.  Yeda then withdrew the proposed specific claims, and the application was passed to issuance.  The district court held that Yeda cannot now obtain a claim construction that recovers claim scope that was yielded in order to obtain issuance of the patent, and construed the claims as excluding chimeric and humanized antibodies.

In response to Yeda's argument that there could be no prosecution estoppel with respect to the scope of claim 1 absent a narrowing amendment to the claim 1, the Court noted that this "is not a correct general principle," stating that "[a]lthough each claim in a patent warrants independent consideration in light of its particular facts and history, the general rule is that a patent applicant cannot later obtain scope that was requested during prosecution, rejected by the Examiner, and then withdrawn by the applicant."  The Federal Circuit determined that "[s]uch estoppel was reasonably applied to claim 1 by the district court, although claim 1 had not been amended," and therefore affirmed the District Court's holding that Yeda was estopped from including chimeric and humanized antibodies within the scope of the monoclonal antibodies claimed in the '923 patent.

UCB, Inc. v. Yeda Research and Development Co. (Fed. Cir. 2016)
Panel: Circuit Judges Newman, Lourie, and Chen
Opinion by Circuit Judge Newman

Mitchell International, Inc. v. Audatex North America, Inc. (PTAB 2016)

PTAB Ignores District Court Claim Construction, Finds Patent Invalid

By Joseph Herndon --

On February 19, 2016, the USPTO Patent Trial and Appeal Board (PTAB) issued a final written decision in the Covered Business Method (CBM) patent review between Mitchell International, Inc. and Audatex North America, Inc. in which all challenged claims were found to be drawn to a patent ineligible abstract idea.  While the CBM review had a predictable result of finding non-technical business method claims unpatentable, the claim construction analysis by the PTAB is troubling.

Mitchell filed a petition requesting a CBM review of claims 1-29 of U.S. Patent No. 7,912,740.  The '740 patent issued on March 22, 2011 and relates generally to a method and system for entering data relating to an insurance claim for a damaged vehicle, and the data is processed into a valuation report that is transmitted through the world wide web.  According to the background of the patent, when a vehicle is damaged, the owner of the vehicle may file a claim with an insurance carrier, and if the repair costs of the damaged vehicle exceed its value, or a certain percentage of its value, the vehicle may be considered "totaled".  A problem with some existing systems is that the valuation does not account for specific variations of the vehicle, such as the condition of the vehicle or added aftermarket equipment.  To obtain a more accurate valuation, an adjuster may access a more extensive database through the internet.

Claim 1, reproduced below, is illustrative of the claims at issue:

1.  A method for obtaining an automobile insurance claim valuation report, comprising:
    transmitting a uniform resource locator over an electronic communication network from a client computer;
    connecting with a web site that corresponds to the uniform resource locator, the web site provides a plurality of web pages that allow an operator to input data relating to an insurance claim for a damaged vehicle;
    entering data relating to the insurance claim;
    processing the entered data to generate a valuation report for the damaged vehicle, the valuation report provides a market value for the damaged vehicle; and
    transmitting the valuation report to the client computer over the electronic communication network.

Standing and Claim Construction

The PTAB stated that the '740 patent is a covered business method patent because at least one claim of the '740 patent is directed to a covered business method.  No analysis was given, but because the Patent Owner did not dispute such determination in the Patent Owner Response, the PTAB moved forward with the CBM review.

In a CBM patent review, claim terms are interpreted according to their broadest reasonable construction in light of the specification of the patent in which they appear.  Under the broadest reasonable interpretation standard, and absent any special definitions, claim terms are given their ordinary and customary meaning as would be understood by one of ordinary skill in the art in the context of the entire disclosure.

The PTAB construed a number of claim terms.  Of note was the construction of the terms "insurance claim" as encompassing, but not being limited to, "any data that would be used in making an insurance claim".  A CBM may only be instituted when the underlying patent has been asserted, and here, the District Court in the co-pending litigation construed "insurance claim" in a different more limiting way, namely to be a "request to recover market value or repair cost in association with an insurance policy."

The District Court's construction was pointed out to the PTAB, but the PTAB ignored the District Court's construction.  The PTAB stated that the Federal Circuit in Phillips v. AWH Corp., 415 F.3d 1303, 1315 (Fed. Cir. 2005) (en banc), requires that the claims "must be read in view of the specification, of which they are a part".  Using the claim construction standards set forth in Phillips, the PTAB found that there is nothing in the specification of the '740 patent that would limit the claim term "insurance claim" in the more limiting way.  Presumably, the District Court also used those same claim construction standards set forth in Phillips, and so it is troubling to see conflicting claim constructions used by the PTAB and District Court.

While the differing claim constructions between the PTAB and the District Court likely do not amount to much difference for patentability of the claims, seen below, it is a problem to have variation in claim construction performed parallel to each other.

Patentable Subject Matter Under 35 U.S.C § 101

Mitchell asserted that claims 1–29 of the '740 patent are not directed to patent-eligible subject matter under 35 U.S.C. § 101.

The PTAB followed the framework from the Alice decision for distinguishing patents that claim laws of nature, natural phenomena, and abstract ideas from those that claim patent-eligible applications of those concepts.  First, it must be determined whether the claims at issue are directed to a patent-ineligible concept.  Second, the elements of each claim must be considered both individually and as an ordered combination to determine whether the additional elements transform the nature of the claim into a patent-eligible application.

The PTAB disposed of the claims rather quickly under § 101.  Each of the challenged claims was found to be directed to the fundamental concept of providing a vehicle valuation using information about the vehicle.  The only technological features recited in the claims at issue are generic computer implementation systems performing generic computer functions.  As acknowledged by Audatex's expert, the claims do not improve the function of the computer, they do not solve a problem unique to the internet, nor are they tied to a particular machine or apparatus.

Thus, the PTAB found that claims 1–29 are directed to patent-ineligible subject matter under 35 U.S.C. § 101.

Audatex's Motion to Amend

Audatex filed a contingent Motion to Amend to substitute new claims 30–58 for original claims 1–29, respectively.  The PTAB denied this motion.

The ultimate burden of persuasion is with the Patent Owner, Audatex, to demonstrate the patentability of the amended claims, and because this burden was not met, the Motion to Amend was denied.

The new claims recited the same limitations of claims 1-29 and added the following underlined limitations of "the insurance claim being a request to recover market value or repair cost in association with an insurance policy", "providing a parts list and calculated estimate data through the web site", and "processing the entered data to generate a valuation report for the damaged vehicle, the valuation report provides a market value for the damaged vehicle, before the damaged vehicle was damaged, based on factors including mileage, condition, and geographic location."

The PTAB found that Audatex did not establish that the amended claims are patentable under 35 U.S.C. § 101.  Audatex argued that the amended claims recite a system and method that solves a technical problem, and that the amended claims do not preempt all means for obtaining a valuation report.  But, the PTAB found that the claims still are drawn to the abstract idea of providing a vehicle valuation report, and recite no more than a generic computer for doing so.  The § 101 analysis remained the same.

The PTAB also found that Audatex did not establish that the claims are patentable over the prior art.  Not discussed here, but the PTAB found claims 1-29 were unpatentable under § 101 and also anticipated by a prior art reference to Reimel.  The PTAB found that, it would have been well within the level of skill of the ordinary artisan to use the vehicle valuation system of Reimel to provide a parts list and calculate estimate data, as well as leave out the damage caused by an accident to obtain a pre-damage valuation for the vehicle, as recited in the amended claims.

Thus, because Audatex did not meet its burden of demonstrating the patentability of the proposed substitute claims, and the Motion to Amend was denied.  As a result, the '740 patent was left with invalid claims.

Mitchell International, Inc. v. Audatex North America, Inc. (PTAB 2016)
Before Lora M. Green, William V. Saindon, and Patrick M. Boucher, Administrative Patent Judges.
Final Written Decision by Lora M. Greeb

Convolve, Inc. v. Compaq Computer Corp. (Fed. Cir. 2016)

Despite Amendments during Reexamination, Intervening Rights Not Found

By Joseph Herndon --

On February 10, 2016, the Federal Circuit issued an opinion in a case captioned Convolve, Inc., and Massachusetts Institute of Technology v. Compaq Computer Corp., Seagate Technology, Inc., and Seagate Technology, LLC.

This case has been before the Federal Circuit previously, and returns after a remand to the Southern District of New York.  In the first appeal, the Federal Circuit reversed the District Court's summary judgment ruling that no accused products met some of the patent's claim limitations and remanded for further proceedings.  On remand, the District Court granted summary judgment on alternative grounds.  Now, on appeal again, the Federal Circuit has agreed with the District Court that the accused products do not possess a claim limitation, but has concluded that the District Court erred with construction of other claim limitations and in granting summary judgment based on intervening rights.  The case is again now remanded to correct some of these issues.  Below, we only consider issues presented with respect to the finding that intervening rights do not exist.

The technology at issue relates to improvements in computer hard drives described in U.S. Patent No. 6,314,473.  Hard drives store data as magnetized spots on the surface of disks or "platters" inside the drive.  These spots are arranged in concentric circles, called tracks, on the surface of the platters.  The hard drive also contains a mechanical arm that "seeks" between different "tracks" to read or write information on those tracks.  As relevant to this appeal, hard drives ordinarily employ two motors to read and write data:  (1) a spindle motor that spins circular platters, "allowing the head to cover the platters' area while traversing over a line or arc"; and (2) "the voice coil motor . . . that moves the arm across the spinning platters."  The process of moving the arm across the platters, called "seeking," generates vibrations in the arm and the attached read/write head, which generates acoustic noise audible to the user (e.g., seek acoustic noise).

The patent specification describes the inverse relationship between the seek time and the acoustic noise:  the shorter the seek time, the greater the vibration and the greater the acoustic noise.  Although acoustic noise can be generated from both the spindle motor and the seek process, the '473 patent focuses on methods and apparatuses for improving hard drives by reducing the seek acoustic noise generated by the movement of the disk drive's arm and read/write head, i.e., the seek process.  The patent describes a technique to minimize the vibrations of the head as it moves over the rotating hard disk that requires a "user interface" to control the speed at which the seek arm operates such that a user could select a quiet mode, which may have a slower read/write time but generates less noise.

Convolve, Inc. (Convolve) filed suit against Seagate Technology, LLC and Seagate Technology, Inc. (Seagate) and Compaq Computer Corp. (Compaq) in July 2000, alleging, among other things, infringement of the '473 patent.  The '473 patent was placed into reexamination, during which the patentee added the modifier "seek" in front of "acoustic noise" after a prior art rejection.  After initial litigation, on remand, the District Court granted summary judgment that patent infringement liability is precluded by intervening rights arising from the substantive amendment made during reexamination to the asserted claims.  Convolve appealed.

Claim 10 is representative, and is reproduced below.  The words added during reexamination are underlined and the words deleted are in brackets:

10.  Method for controlling operation of a data storage device, comprising:
    providing a user interface for controlling one of a seek time of the data storage device and [an] a seek acoustic noise level of the data storage device;
    operating the user interface so as to alter settings of one of the seek time and the seek acoustic noise level of the data storage device in inverse relation; and
    outputting commands to the data storage device causing the data storage device to alter seek trajectory shape by shaping input signals to the data storage device to reduce selected unwanted frequencies from a plurality of frequencies in accordance with the altered settings.

With respect to intervening rights, a patentee of a patent that survives reexamination is only entitled to infringement damages for the time period between the date of issuance of the original claims and the date of the reexamined claims if the original and the reexamined claims are "substantially identical".  The Federal Circuit noted that it is the scope of the claim that must be identical, not that identical words must be used.

The Federal Circuit thus analyzed the claims to determine whether the pre-2008 reexamination claims are limited to "seek acoustic noise" or whether the original claims cover both seek and spindle acoustic noise.  Ultimately, the Federal Circuit found that the claims were originally limited to seek acoustic noise, and the addition of the word "seek" did not alter the scope of the claims.  Thus, no intervening rights were found to exist.

On their face, the original claims recite only "acoustic noise," which could encompass any manner of acoustic noise, including that generated from the spindle.  The Federal Circuit found, however, that when read in conjunction with the remaining claim limitations and in light of the specification and prosecution history, a person of ordinary skill in the art would understand the claims to be limited to seek acoustic noise.

Of important note is that the specification does not use the term "seek acoustic noise" or expressly exclude acoustic noise generated by spindle rotation, and, at some points, it teaches that acoustic noise can arise from more than one type of vibration.  However, the Federal Circuit found that the focus of the specification is on the seek process and the noise it generates.  As support of this finding, the Federal Circuit noted that the specification states that "the present invention" is directed to employing a "dynamic system" to "reduc[e] unwanted vibrations, which, if unchecked, could lead to disk read/write errors or excessive noise."

The Federal Circuit found that this understanding is reinforced by other claim limitations.  For example, the claims expressly tie "acoustic noise" to "seek time" by reciting settings for "seek time" and "acoustic noise" "in inverse relation."

The Federal Circuit found that Seagate did not show that there is any relation between "seek time" and acoustic noise other than the noise generated by the movement of the seek arm.

The Federal Circuit further found that the prosecution history of the '473 patent supports the finding that the original claims were limited to "seek acoustic noise".  Before the 2008 reexamination, a prior art rejection identified references that teach a mechanism for controlling seek time and both electrical noise and acoustic noise from the spindle motor.  In response, the patentee amended the claims "to state explicitly that the noise to be controlled is acoustic noise as opposed to electrical noise."  In explaining the reasoning for the amendment, the applicant went further and made clear that the acoustic noise problems addressed by the claims and the specification are limited to those generated by the seek function, not the spindle motor.

Thus, to the extent the specification alone does not limit the claims to seek acoustic noise, these prosecution history statements were enough to show to the Federal Circuit a clear intent to limit the scope of the claims to seek acoustic noise -- i.e., acoustic noise generated by the movement of the drive's arm and read/write head during the seek process.

In summary, the Federal Circuit found support for the conclusion that the original claims were limited to "seek acoustic noise" despite no explicit recitation of a type of noise in the claims, nor any recitation of the term "seek acoustic noise" whatsoever in the specification as filed.  One has to wonder why the patentee amended the claims during reexamination in the first place?  The reasons given by the patentee were for "clarifying purposes"; however, the amendment was made in response to a prior art rejection.  Thus, it seems to reason that the original claims as filed were not clear as to the scope of the type acoustic noise being considered, and in fact, under the broadest reasonable interpretation standard likely covered multiple types of noise.  The specification as filed describes multiple types of acoustic noise, and if it was unclear in the claims as filed as to which acoustic noise was being considered, wouldn't amending the claims to expressly declare the claims directed to the "seek acoustic noise" alter the scope of the claims to overcome the prior art rejection?

The outcome of this case is somewhat troubling and relies far too much on the patent application and prosecution file history to "read" limitations into the claims.  The Federal Circuit noted that the specification at some instances teaches that acoustic noise can arise from more than one type of vibration, but used statements in the specification supporting the conclusion that the claims were in fact originally limited beyond the explicitly filed language.  These contrary statements in the specification should be enough to show that the claims as originally filed were unclear, rendering the original filed claims open to interpretation beyond only "seek acoustic noise".  In any event, this case has been remanded for round three at the District Court since the intervening rights were found to not exist.

Convolve, Inc. v. Compaq Computer Corp. (Fed. Cir. 2016)
Panel: Circuit Judges Dyk, Taranto, and Hughes
Opinion by Circuit Judge Hughes

Avid Technology, Inc. v. Harmonic, Inc. (Fed. Cir. 2016)

Lesson for Defendant-Appellee's: Provide Responsive Arguments on Appeal

By Joseph Herndon --

On January 29, 2016, the Federal Circuit issued an Opinion in Avid Technology, Inc. v. Harmonic, Inc. in which the judgment of the District Court was vacated, and the case was remanded for a new trial on infringement.  Avid asserted two patents against Harmonic, U.S. Patent No. 6,760,808 and No. 7,487,309.  Both patents concern data storage systems that allow users to store and retrieve large files, such as movies.  The main focus of the error in the District Court's judgment, as found by the Federal Circuit, was reliance on prosecution history statements for a disclaimer of claim scope.  The Federal Circuit thus remanded for a new trial based on a different claim construction.  More importantly, however, due to defendant Harmonic's failure to make certain arguments on appeal, Harmonic effectively has lost the opportunity to argue for non-infringement during the new trial.

Turning to the asserted patents, in the system described by Avid's patents, when a client wishes to store ("write") a file, such as a movie, the system splits the file into "segments."  The segments are distributed among various storage units and stored in duplicate at different units (one primary unit and one backup).  The system creates and updates segment tables listing file segments and their storage-unit locations.  The segment tables may be stored together, as a catalog, and the catalogs may be stored on a catalog manager, at individual clients, at a central database, or may be distributed among several databases or clients.  When a client wishes to retrieve ("read") a file, the client determines which storage units have the needed segments, and sends a request for a given segment to a storage unit, which transmits it to the client.

Claim 1 of the '808 patent is illustrative of the claims:

1.  A distributed data storage system for allowing one or more client systems to access data, comprising:
    a plurality of independent storage units for storing the data;
    wherein the data is stored on the plurality of storage units in files, wherein each file includes segments of data and redundancy information for each segment, wherein each segment has an identifier, and wherein, for each file, the segments and the redundancy information for each segment are distributed among the plurality of storage units;
    wherein each storage unit comprises: means for maintaining information associating the identifier of each segment stored on the storage unit with the location of each segment on the storage unit; means for receiving a request from one of the client systems for a segment of a file, wherein a request includes the identifier of the segment of the file; and
    means, operative in response to a request from one of the client systems for a segment of a file, for retrieving the requested segment of the file from the storage unit using the information associating the identifier of each segment stored on the storage unit with the location of each segment on the storage unit; and
    means for sending the requested segment to the client system.

The italicized phrases are the focus of this case.  The District Court gave the jury a claim construction of the "independent storage unit" claim element, basing that construction on statements Avid made in the prosecution history.

The second italicized claim element at issue went to the jury without a clarifying construction, over neither party's objection.  The jury rejected Harmonic's validity challenge to Avid's patents, but found that Harmonic did not infringe.  Avid challenged the non-infringement judgment by post-trial motions and argued that the District Court's claim construction regarding the "independent storage unit" element was incorrect and that, under a correct claim construction, that claim element is clearly met.  Avid appealed the non-infringement judgment.

Prosecution History Estoppel – Disclaimer?

The District Court ruled that, during prosecution, Avid had disclaimed a system in which the central controller tells the client which storage unit the client should deal with during read and write operations.  On that basis, the District Court instructed the jury that "independent storage units" means "storage units which are not centrally controlled and whose memory addresses are not globally allocated" and that "systems with independent storage units cannot use a central controller to access data, and, in particular, cannot use a central controller that identifies the storage unit on which data is stored in response to client requests."

The Federal Circuit found that the District Court erred with this claim construction because the standard for finding a disclaimer was not met.  The Federal Circuit noted that "for prosecution disclaimer to attach, our precedent requires that the alleged disavowing actions or statements made during prosecution be both clear and unmistakable."  But, where the alleged disavowal is ambiguous, or even "amenable to multiple reasonable interpretations," the Federal Circuit has declined to find prosecution disclaimer.

The District Court relied on two passages from an Avid submission during the prosecution history including:

[T]he claimed system, by virtue of the independent storage units, avoids using a central controller to access data.  In particular, storage units "receiv[e] . . . request[s] from one of the client systems for a segment of a file."  Clients do not issue requests to a central controller that in turn identifies storage units that store the data and issues requests to storage units.

The Federal Circuit found that the District Court misread this passage.  In the Federal Circuit's opinion, the first portion does not itself say what exactly "access[ing] data" entails; it is the second portion that identifies what Avid means.  What that portion says, by its terms, is that a central controller is excluded if it performs both of two functions:  it "identifies storage units that store the data and issues requests to storage units."  The language on its face does not exclude a central controller that performs only one or the other of the two stated functions -- which would have been the meaning if the phrase had used "or" rather than "and."  In any event, it does not do so clearly, as would be required to find a disclaimer of a central controller that merely identifies the storage units.

In short, the Federal Circuit found no clear and unmistakable disclaimer of central controllers that provide storage-unit location information for retrieving segments.  The jury instruction limiting "independent storage units" in that way was incorrect.

Vacate Judgment, New Trial, Judgment of Infringement?

Now that the Federal Circuit found such an error, what action is necessary?  The error, undisputedly preserved for review, concerned the legal standard (claim construction) for evaluating a central element of the infringement dispute.  The error requires at least vacatur of the verdict and a remand for a new trial unless the Federal Circuit can conclude that the error was not prejudicial, i.e., was harmless.

Because there was no separate jury determination of non-infringement on a distinct ground, the error in the instruction governing this central dispute at trial would be harmless only if a reasonable jury would have been required by the evidence to find non-infringement even without the error.

But Harmonic did not even argue for that conclusion.  The Federal Circuit noted that nowhere in its brief did Harmonic argue that the jury was required to find non-infringement -- on any ground -- even if the "independent storage units" element permits a central component that supplies storage-unit-location information to a client wishing to retrieve data from storage units.  In particular, Harmonic did not argue that the evidence required a non-infringement finding based on the other claim element in dispute; its only argument regarding the second at-issue element was that the jury could reasonably find that element not to be met by the infringing product.  That is not enough, because the Federal Circuit cannot infer that the jury did so find.  Similarly as to the "independent storage units" element itself:  Harmonic nowhere argued that, even if the construction given to the jury was wrong, the evidence still required a finding that the infringing product lacks the required independent storage units.

In short, the Federal Circuit found that Harmonic made no argument under the proper legal standard to answer Avid's argument that the instructional error was prejudicial, requiring a new trial.  Thus, the Federal Circuit was at least required to remand for a new trial.

Avid actually took its argument one step further to contend that, once the legally erroneous narrowing of the claim construction is reversed, the evidence not only permits but requires a finding that Harmonic's system meets the "independent storage units" claim element.  And, Harmonic still presented no argument to the contrary!!

Given that, in response to Avid's argument, Harmonic has simply not suggested an alternative claim construction on this point, or argued that any such alternative claim construction could be found not to reach the alleged product, satisfaction of this claim requirement is now settled.  The Federal Circuit thus stated that infringement as a whole is to be retried, but Harmonic's assertion of non-infringement based on this claim element is not, thus narrowing the scope of issues for the new trial on remand.

Thus, because Harmonic did not properly present arguments for non-infringement in the alternative using the suggested claim construction, or even provide responsive arguments to Avid's position of infringement in view of their proposed claim construction, Harmonic effectively waived the opportunity to do so at the new trial.  Thus, the error on this central trial issue required setting aside the non-infringement verdicts, which were general verdicts as to each patent, but because Harmonic did not argue that the evidence compels a finding of non-infringement independently of the construction error, satisfaction of this particular claim element is now settled.

With respect to the second claim term at issue, the Federal Circuit rejected the contention that the evidence allows a reasonable finding of infringement.  The case went to the jury without a construction of the key claim language, and Avid did not meet its burden of showing that it has the only reasonable view of the claim element as long as it is un-construed.  As a result, the Federal Circuit stated that Avid has not shown entitlement to more than a new trial, and thus, no entry of a judgment of infringement was made by the Federal Circuit.  But, Avid received a vacatur of the judgment and a new trial in which infringement of a central claim element is satisfied providing for a second opportunity to convince another jury that Harmonic infringes.

Avid Technology, Inc. v. Harmonic, Inc. (Fed. Cir. 2016)
Panel: Circuit Judges Reyna, Taranto, and Stoll
Opinion by Circuit Judge Taranto