Patent Docs

Janssen Pharmaceuticals, Inc. v. Teva Pharmaceuticals USA, Inc. (Fed. Cir. 2024)

By Kevin E. Noonan --

In its recent decision in Janssen Pharmaceuticals, Inc. v. Teva Pharmaceuticals USA, Inc. the Federal Circuit reminds us that most verities in patent law are not eternal and are frequently subject to case-by-case interpretation, in this case the purported verity being that reciting the indefinite article ("a") in a patent claim is construed to mean "one or more."  Besides showing that "it ain't necessary so" the case is beneficial for motivating a review of when and under what circumstances "a" means "one or more" and when it means "one," but it also illustrates how this perhaps necessary flexibility in claim construction can also lead to what can appear to be outcome-oriented decisions producing more head scratching than enlightenment.

The issue arose in ANDA litigation over Janssen's Invega Sustenna drug, an "extended-release intramuscular injectable of paliperidone palmitate, which is indicated for the treatment of schizophrenia in adults," according to the opinion.  Janssen asserted several claims of U.S. Patent No. 9,439,906; dependent claim 2 was considered representative by the Court:

2.  A dosing regimen for administering paliperidone palmitate to a psychiatric patient in need of treatment for schizophrenia, schizoaffective disorder, or schizophreniform disorder comprising
    (1) administering intramuscularly in the deltoid of a patient in need of treatment a first loading dose of about 150 mg-eq. of paliperidone as paliperidone palmitate formulated in a sustained release formulation on the first day of treatment;
    (2) administering intramuscularly in the deltoid muscle of the patient in need of treatment a second loading dose of about 100 mg-eq. of paliperidone as paliperidone palmitate formulated in a sustained re-lease formulation on the 6th to about 10th day of treatment; and
    (3) administering intramuscularly in the deltoid or gluteal muscle of the patient in need of treatment a first maintenance dose of about 25 mg-eq. to about 150 mg-eq. of paliperidone as paliperidone palmitate in a sustained release formulation a month (±7 days) after the second loading dose,
[The dosing regimen of claim 1] wherein after administration of the first maintenance dose, subsequent maintenance doses of from about 25 mg-eq. to 150 mg-eq. are administered in the deltoid or gluteal muscle of the psychiatric patient in need of treatment at monthly (±7 days) intervals.

(where the italicized portion is the language of independent claim 1).

as was dependent claim 10:

10.  A dosing regimen for administering paliperidone palmitate to a renally impaired psychiatric patient in need of treatment for schizophrenia, schizoaffective disorder, or schizophreniform disorder comprising
    (a) administering intramuscularly in the deltoid of a renally impaired psychiatric patient in need of treatment a first loading dose of from about 75 mg-eq. of paliperidone as paliperidone palmitate formulated in a sustained release formulation on the first day of treatment;
    (b) administering intramuscularly in the deltoid muscle of the patient in need of treatment a second loading dose of from about 75 mg-eq. of paliperidone as paliperidone palmitate formulated in a sustained release formulation on the 6th to about 10th day of treatment; and
    (c) administering intramuscularly in the deltoid or gluteal muscle of the patient in need of treatment a first maintenance dose of about 25 mg-eq. to about 75 mg-eq. of paliperidone as paliperidone palmitate in a sustained release formulation a month (±7 days) after the second loading dose,
[The dosing regimen of claim 8] wherein the sustained release formulation is an aqueous nanoparticle suspension.

(where the italicized portion is the language of independent claim 8).

Dependent claim 13 was also asserted, which limited the patient population to schizophrenics and included the limitation that the dose range was 25 mg-eq. to about 50 mg-eq. for the "maintenance dose"; and finally dependent claims 20 and 21 directed to the particle size of the dosage, the opinion setting forth claim 19, from which claims 20 and 21 depend as reciting the "most pertinent" particle size:

19.  The dosing regimen of claims 1, 4, 8 or 11 wherein the sustained release depot formulation is an aqueous nanoparticle suspension consists essentially of
    (a) 156 mg/ml of the paliperidone palmitate having an average particle size (d50) of from about 1600 nm to about 900 nm;
    (b) 12 mg/ml of polysorbate 20;
    (c) one or more buffering agents sufficient to render the composition neutral to very slightly basic (pH 8.5);
    (d) 30 mg/ml of a suspending agent wherein the suspending agent is polyethylene glycol 4000; and
    (e) water q.s. ad 100%.

(wherein here italics identify the relevant limitations):

The opinion recites that paliperidone itself is the "major active metabolite" of an earlier (1990's) antipsychotic drug, risperidone.  Paliperidone esters such as the palmitate were known in the prior art to have the beneficial property of slow dissolution after intramuscular injection, and the opinion notes that the skilled worker could "easily determine the effective amount of paliperidone to administer."  Although the drug has been on the market for some time in tablet form patient compliance has been an issue.  There were earlier patents directed to methods for administering the drug by injection monthly (U.S. Patent Nos. 6,577,545 and 6,555,544).  In addition to treatment regimens, the '906 patent discloses optimal particle sizes for the formulation, as well as injection in the deltoid muscle for rapid initial plasma concentrations and thereafter administering to the deltoid or gluteal muscles.

Teva stipulated to infringement but challenged the validity of the asserted claims on obviousness and indefiniteness grounds.  The opinion notes that the "safety of paliperidone, its efficacy for treating schizophrenia, and its recommended dosing were all well established as of the '906 patent's priority date" and that "long acting injectables (LAIs)—administered intramuscularly—of other antipsychotics were [also] on the market" at that time.  For its obviousness challenge under these prior art circumstances Teva asserted three references:  "(1) clinical study protocol NCT00210548 ("the '548 protocol"); (2) the '544 patent; and (3) International Publication No. WO 2006/114384 ("WO'384")."  The '548 protocol described a Phase III clinical trial intending to show that three fixed doses (50, 100, or 150 milligrams equivalent) of paliperidone administered to the buttocks were more efficacious than placebo in treating schizophrenia (both party's experts agreed that this protocol was expected to be safe and effective, although there were no results reported therein).  Even though not available in the art at the '906 patent's earliest priority date, the opinion notes that the 50 mg dose was not more effective than placebo, while both the 100 and 150 mg doses had defects that precluded Janssen from using these results to support FDA approval.

The '544 patent (owned by Janssen) claimed "'[a] pharmaceutical composition [of paliperidone palmitate] suitable as a depot formulation for administration by intramuscular or subcutaneous injection, comprising,' among other things, a 'therapeutically effective amount' of paliperidone palmitate," as well as methods of using this pharmaceutical composition to treat schizophrenia.  The specification of the '544 patent discloses ("emphasizes," according to the opinion) the ability to "space out" paliperidone palmitate administration by "three weeks to a month" while maintaining a blood plasma concentration of "above 10 ng/ml and below 100 ng/ml."  "Most pertinent for our purposes on appeal," the opinion states, is disclosure of optimal particle size and "details related to applying 'mechanical means' to reduce the effective average particle size," specifically providing this table:

Finally, the PCT application (WO'384, also owned by Janssen) discloses both the Invega Sustenna formulation and particle sizes at drug concentrations of 25-150 mg-eq.

The District Court held that Teva had not established that any of the claims of the '906 patent were invalid for obviousness or indefiniteness, and this appeal followed.

The Federal Circuit affirmed the trial court's finding regarding indefiniteness of claims 19-21 but vacated and remanded its non-obviousness determination as to all claims, in an opinion by Judge Prost joined by Judges Dyk and Hughes.  The Court agreed with Teva that the District Court erred in requiring Teva to show that:

[I]t would have been obvious to use the recited dosing regimens for the general population of patients—i.e., a generalized dosing regimen.  The court found that the prior art did not demonstrate population-wide safety and efficacy and thus did not teach a generalized dosing regimen.  Teva contends that the claims were not directed to a generalized dosing regimen and therefore the district court asked for a showing of obviousness that went beyond what was claimed.

The opinion specifically asserts that the claims were directed to "a psychiatric patient in need of treatment for schizophrenia" using certain dosage amounts and administration times (emphasis in opinion).  In the Court's opinion:

Nothing in the claims requires that the regimen be used for—let alone be ideal for—the patient population generally or a certain percentage of the patient population.  On their face, the claims only recite a dosing regimen for a psychiatric patient.  Because "[w]hat matters is the objective reach of the claim," KSR[ v. Teleflex], 550 U.S. at 419, the district court erred to the extent it effectively defined its obviousness inquiry as one concerning the "generalized" suitability of the dosing regimens [emphasis in opinion].

This sentiment raises at least two questions:  first, the proper scope of claims reciting "a" member of a patient population (and how it Is to be determined) and second whether disclosure of clinical trial results can be interpreted as being insufficient to satisfy patentability standards for patient populations for such claims.  The jurisprudential history of construction of the indefinite article "a" is not completely straightforward; although treatises somewhat blithely assert that using "a" indicates the proper construction to be "one or more" (see Robert C. Faber, Landis on Mechanics of Patent Claim Drafting 531 (3d ed. 1990)), in fact the case law is more nuanced.  The Federal Circuit in  KCJ Corp. v. Kinetic Concepts, Inc. 223 F.3d 1351 (Fed. Cir. 2000), opined that "[t]his court has repeatedly emphasized that an indefinite article 'a' or 'an' in patent parlance carries the meaning of 'one or more' in open-ended claims containing the transitional phrase 'comprising,'" citing Elkay Mfg. Co. v. Ebco Mfg. Co., 192 F.3d 973, 977, 52 USPQ2d 1109, 1112 (Fed. Cir. 1999); AbTox, Inc. v. Exitron Corp., 122 F.3d 1019, 1023, 43 USPQ2d 1545, 1548 (Fed. Cir. 1997); and North Am. Vaccine, Inc. v. American Cyanamid Co., 7 F.3d 1571, 1575-76, 28 USPQ2d 1333, 1336 (Fed. Cir. 1993).  And "[m]oreover, standing alone, a disclosure of a preferred or exemplary embodiment encompassing a singular element does not disclaim a plural embodiment."  The opinion also states that "although the specifications may well indicate that certain embodiments are preferred, particular embodiments appearing in a specification will not be read into the claims when the claim language is broader than such embodiments," citing Electro Med. Sys., S.A. v. Cooper Life Sciences, Inc., 34 F.3d 1048, 1054, 32 USPQ2d 1017, 1021 (Fed. Cir. 1994).

But some of this cited case law embodies the exceptions to this general rule (to the extent it is general); for example, Abtox, wherein "a" gas chamber was construed as limiting the claims to a single gas-containing chamber based on intrinsic evidence, including the specification (and drawings) as well as the prosecution history that were consistent with construing the claim language to be limited to a single chamber and North Am. Vaccine, Inc. where in the absence of use of "a" in the specification to mean "one or more" (by example) construing the claim to encompass more than one would create a written description deficiency, the Court stating that "[a] patent applicant cannot disclose and claim an invention narrowly and then, in the course of an infringement suit, argue effectively that the claims should be construed to cover that which is neither described nor enabled in the patent."  It is fair to say that "construction of the indefinite article does not conform to uniform treatment or 'black letter law' but rather is interpreted based on how it is used in the intrinsic evidence (claims, specification, and prosecution history)," Insituform Technologies v. Cat Contracting, 99 F.3d 1098 (Fed Cir 1996).

Here, the claim recites "a" dosing regimen for treating "a" psychiatric patient (this of course is done individually to a population of individuals not to a population per se) comprising the details of the regimen.  The Court held that the District Court used evidence adduced by Janssen of clinical trial results improperly to read a limitation regarding patient populations into the claim that recited the dosing regimen for treating "a" psychiatric patient. (In a footnote the panel states "it is unclear whether that [dosing] requirement would indicate that physicians typically (or always) dose that way or that some (or all) patients achieve a certain level of a particular unnamed result").  This principle brings to mind recent precedent on enablement, and whether claims to therapeutic treatments and regimens for administering them will be subject to similar requirements for a showing of how many psychiatric patients would be enough for these claims to be non-obvious under similar circumstances as in this case (contrary, for example, to distinctions by the Court between patentability requirements and regulatory requirements; see, In re Brana, 51 F.3d 1560 (Fed. Cir. 1995)).

The District Court's "misunderstanding" the Court apprehends based on these distinctions made it clear to the panel that they "impacted the district court's overall obviousness analysis," citing statements in the district court decision related to injection site (deltoid, thigh, or gluteal) and dosing amounts.  The opinion asserts that the District Court erred for not considering evidence that the prior art taught making these choices on an individualized rather than patient population basis, based on the Court's construction that such individualized evidence was indicated if not mandated by claim limitations to "a" psychiatric patient being treated by "a" dosage regimen.  And with regard to the District Court's assessment of there not having been a reasonable expectation of success in combining the asserted prior art the panel states that "there too [the District Court] seemed to require an expectation of success not for administering paliperidone palmitate to a patient according to the dosing regimen claimed, but rather success in achieving the goals a POSA would have across an (undefined) average population of patients, such that a POSA would expect to use the regimen as a 'generalized multi-dose regimen.'"  This error, according to the opinion was the result of "conflat[ing] the invention of the claims with Janssen's approval process when it referred to the difficulties Janssen encountered with the . . . clinical trial as an indication of unpredictability in the 'invention process.'"  "In sum," according to the opinion, " . . . the court's framing led it to ask the wrong questions about important aspects of the obviousness inquiry.  This error requires a remand as to all claims because as it currently stands, the record does not contain underlying obviousness factfindings that are cued to the 'a psychiatric patient' claims at issue here."

The opinion also faults the District Court for assessing obviousness of claims regarding administration to patients having renal impairment to those patients wherein the impairment was "mild," there being no such limitation recited in the claims.

More generally, the Court gave credence to Teva's argument that the District Court had contravened the dictates in KSR regarding "impermissibly rigid" assessment of obviousness, based on the District Court not giving the proper weight to the ability of the skilled worker to deduce what the references "fairly suggest[ed]" or employ "ordinary creativity," inter alia by purportedly applying these references to the claims in a "one-by-one" manner (a criticism countless patent prosecutors have heard from PTO examiners), calling it a "seemingly siloed and inflexible approach."  Consequently, the panel believed that the District Court did not consider "how background knowledge in the art would have impacted a POSA's understanding of, or motivation to modify, the primary references at issue, thereby inflating the significance of minor variations between the prior art and the claims."  The opinion also criticizes how the District Court relied on the '548 protocol with regard to the skilled worker's motivation to combine, insofar as the District Court "concluded that in the pharmaceutical context, if a prior art reference does not contain safety and efficacy data, there is no reason to combine it with other prior art references."  The Federal Circuit rejected this approach, stating that the lack of safety and efficacy data in a prior art reference to a clinical trial did not justify the lower court "discarding" that prior art (echoing recent Federal Circuit precedent that claims directed to pharmaceutical compositions and methods of treatment require affirmative recitation of safety and efficacy requirements; see United Therapeutics Corp. v. Liquidia Technologies, Inc., cited in the opinion).  The opinion faults the District Court for not considering what the results of the '548 protocol would have suggested to the skilled worker, or the relevance of the Phase III status of the clinical trial, or that "paliperidone was already on the market and prescribed to patients in need of treatment for schizophrenia" (which might be an important motivation for the Court's opinion).  According to the opinion, what was "more important" was that the '906 claims "do not recite any particular result or outcome, nor do they recite a need for population-wide statistically significant data" (ignoring the implicit meaning of claims to a therapeutic treatment regimen as being safe and effective, or the formalistic futility of requiring such claims (or all such claims) to affirmatively make such representations, with the opinion once again making a distinction between "a psychiatric patient" and a population of such patients).  The status of the clinical trial as having failed was not public knowledge and thus, the panel reasonably contends the skilled worker might have had a different motivation towards combining this reference with other prior art in the absence of such knowledge.  Finally, the Court found error in the District Court's analysis of modifications of unequal loading doses and injections sites, based on its erroneous consideration of the '548 protocol, as well as asserting particular error regarding claims to treatment of renally impaired psychiatric patients (such as not giving sufficient weight to prior art dosage information from orally administered paliperidone palmitate for claims to the drug administered by injection).

Turning to the District Court's nonobviousness determination for claims directed to particle size, the panel found error over the standard applied for teaching away from the '544 patent, based on lack of specific disclosure regarding this parameter ("[S]ilence does not imply teaching away," Allergan, Inc. v. Apotex Inc., 754 F.3d 952, 964 (Fed. Cir. 2014)).

The opinion also provides a thorough discussion of the remedial requirements on remand for the District Court regarding secondary considerations (objective indicia) of non-obviousness, including unexpected results (involving comparisons to psychiatric drugs other than paliperidone palmitate and reliance on the unknown bases for clinical failure in the '548 protocol).  The opinion criticizes the District Court's lack of proper nexus evidence regarding industry praise, and disregard for the effect of blocking patents to the long-felt need and commercial success considerations, citing Acorda Therapeutics, Inc. v. Roxane Labs., Inc., 903 F.3d 1310, 1339 (Fed. Cir. 2018).

Regarding the indefiniteness decision for claims 19-21 directed to particular particle sizes, the Court affirmed the District Court based on that decision being supported by "factual findings that Teva has not shown to be clearly erroneous."  Teva argued that various means for determining particle sizes could lead to "meaningfully different results, creating a situation where the same physical samples of paliperidone palmitate would simultaneously fall inside and outside the claim depending only on how its particle-size measurement is taken," and in particular on particle size deviations that the District Court found were "an outlier measurement taken with a defective device."  The Federal Circuit held that Teva had not established that this District Court determination was clearly erroneous, citing Takeda Pharm. Co. v. Zydus Pharms. USA, 743 F.3d 1359, 1366–67 (Fed. Cir. 2014), for the principle that "the 'mere possibility of different results' is insufficient for indefiniteness."

The panel opinion is sufficiently thorough that the District Court should have ample direction regarding how it should fashion its considerations of the facts, claims, and prior art references to satisfy the Federal Circuit's criticisms of its non-obviousness determinations.  More concerning is the extent to which a court created to harmonize U.S. patent law has apparently endeavored to decide the specific case before it without due considerations on how "black letter" law will be properly applied to the next case it reviews, with regard to claims reciting "a" limitations and the inherent limitations of safety and efficacy for therapeutic treatments and methods of use thereof otherwise not challenged on written description or enablement grounds.  The decision (and United Therapeutics before it) suggests that it would be prudent in future to include affirmative disclosure regarding these inherencies in specifications supporting claims to therapeutic treatments and administration regimens therefor.

Janssen Pharmaceuticals, Inc. v. Teva Pharmaceuticals USA, Inc. (Fed. Cir. 2024)
Panel: Circuit Judges Dyk, Prost, and Hughes
Opinion by Circuit Judge Prost

ClearOne, Inc. v. Shure Acquisition Holdings, Inc. (Fed. Cir. 2022)

By Michael Borella --

Self-similarity is a characteristic found in many physical, natural, and human-made systems.  In short, it describes a class of structures or behaviors that are at least partially-invariant to time or scale.  Thus, these structures or behaviors appear similar in various mathematical ways whether viewed in small or large samples.  A well-known class of self-similar objects are fractals, but self-similarity is a broader concept and can be found in clouds, waves, certain types of plants, snowflakes, coastlines, and Internet traffic and latency measurements, as well as numerous other areas.

Shure's U.S. Patent No. 9,565,493 describes various types of "self-similar" microphone arrangements for drop ceilings.  The specification of the '493 patent states that such arrangements "include a plurality of microphone transducers selectively positioned in a self-similar or fractal-like configuration, or constellation" and that "this physical configuration can be achieved by arranging the microphones in concentric rings, which allows the array microphone to have equivalent beamwidth performance at any given look angle in a three-dimensional (e.g., X-Y-Z space)."

ClearOne filed a petition for inter partes review (IPR) of the '493 patent.  It was instituted and during the proceeding Shure moved to amend one of the claims to recite:

A microphone assembly comprising:
    an array microphone comprising a plurality of microphones arranged in a self-similar configuration . . .

The Patent Trial and Appeal Board (PTAB) panel granted the motion and noted that "a skilled artisan would understand 'self-similar' to have had a well-known meaning and include the specification's disclosure of fractal-like configurations or constellations, which does not create an ambiguity."  The PTAB's decision was based on the specification, extrinsic dictionary definitions, and expert testimony.  ClearOne appealed, contending (among other issues) that the claim as amended was indefinite.

On review, the Federal Circuit set forth the principles of definiteness as being that "claims, viewed in light of the specification and prosecution history, [must] inform those skilled in the art about the scope of the invention with reasonable certainty."  Further, "[e]xtrinsic evidence may help identify the scope of the claims."

The Court rapidly agreed with the PTAB.  It observed that the specification "discloses an embodiment having a plurality of MEMS microphones . . . arranged in a self-similar or repeating configuration comprising concentric, nested rings of microphones . . . surrounding a central microphone."  The Court also looked to examples of such a configuration in the figures that show "repeating or fractal-like configurations, such as concentric rings, ovals, or other shapes."  Thus, the Court found that "the term self-similar informs skilled artisans, with reasonable certainty, about the scope of the invention."

ClearOne argued that "the written description's disclosure of fractals, concentric circles, and repeating patterns confuses, rather than clarifies, what arrangements are self-similar because those examples must be understood as distinct from self-similar configurations."  The Court disagreed, finding that the terms "self-similar or fractal-like" and "self-similar or repeating" equate self-similar to fractal-like or repeating.

The Court also looked to a dictionary definition of self-similar as "the quality or state of having an appearance that is invariant upon being scaled larger or smaller" as well as a similar definition provided by ClearOne's own expert.  ClearOne also attempted to convince the Court to focus separately on the terms "self" and "similar", as well as different possible interpretations of the term.  But the Court noted that "[j]ust because a term is susceptible to more than one meaning does not render it indefinite," because "[s]uch a test would render nearly every claim term indefinite so long as a party could manufacture a plausible construction."

Accordingly, the Court affirmed the PTAB, and held that the amended claim was not indefinite.

While on its face this case might seem properly decided, there are a few considerations worth noting.  The term "self-similar" is incredible broad.  Famously, Benoit Mandelbrot, one of the pioneers of self-similarity, once wrote that even a straight line is self-similar.  Further, the specification of the '493 patent never formally defines what it means by "self-similar", nor does it explain how the disclosed concentric geometric patterns of microphones exhibit the scale-invariance of the relied on dictionary definition and expert testimony.  The specification does not define the arrangements mathematically -- or in any other particular fashion -- except with a few examples in the figures.

Ultimately, claims should provide a notice function and be able provide a reasonably certain answer to the question "Am I infringing or not?"  It is not clear that this question has a precise answer with respect to Shure's claim.

This goes to show how high the bar can be to establish that even a broadly-defined claim term is indefinite.  Further, this apparent breadth and lack of specificity in the claim language certainly opens up the claim to being vulnerable to more prior art that meets the eye -- notably, Mandelbrot's straight line.

ClearOne, Inc. v. Shure Acquisition Holdings, Inc. (Fed. Cir. 2022)
Panel: Chief Judge Moore and Circuit Judges Newman and Hughes
Opinion by Chief Judge Moore

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

By Kevin E. Noonan --

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

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

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

Claim 1 of the '024 patent:

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

Claim 1 of the '468 patent:

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

Claim 1 of the '530 patent:

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Infinity Computer Products, Inc. v. Oki Data Americas, Inc. (Fed. Cir. 2021)

By Michael Borella --

Infinity Computer Products ("Infinity") sued Oki Data in the District of Delaware for infringement of four patents.  The District Court found the patents invalid due to indefiniteness and the Federal Circuit affirmed.  This case serves to illustrate two important points in patent law: (i) taking contradictory positions during prosecution will be held against the applicant, and (ii) the Federal Circuit will take said contradictory positions to an unnecessary extreme in order to support a holding of indefiniteness.

Representative of the Infinity patents is U.S. Patent No. 6,894,811, claim 1 of which recites:

A method of creating a scanning capability from a facsimile machine to a computer, with scanned image digital data signals transmitted through a bi-directional direct connection via a passive link between the facsimile machine and the computer, comprising the steps of:
    by-passing or isolating the facsimile machine and the computer from the public network telephone line;
    coupling the facsimile machine to the computer;
    conditioning the computer to receive digital facsimile signals representing data on a scanned document; and
    conditioning the facsimile machine to transmit digital signals representing data on a scanned document to the computer, said computer being equipped with unmodified standard protocol send/receive driver communications software enabling the reception of scanned image signals from the facsimile machine, said transmitted digital facsimile signals being received directly into the computer through the bi-directional direct connection via the passive link, thereafter, said computer processing the received digital facsimile signals of the scanned document as needed.

The '811 patent is a continuation in part of U.S. Patent No. 5,530,558.  The emphasized term "passive link" was a point of contention in the suit and ultimately led to the invalidation of all of the Infinity patents.

The claimed invention is directed to "using a fax machine as a printer or scanner for a personal computer."  According to the specification, its goal is to "provide a circuit for interfacing a PC and a facsimile to enable the facsimile to be utilized as a scanner or a printer for a PC and to accomplish all of the objectives of a scanner or a printer."

Various embodiments involve this circuit being internal or external to a PC.  The internal version, with the circuit integrated into a fax modem, is illustrated in Figure 2b of the '811 patent, reproduced below.

An alternative embodiment involves the fax modem and circuit being integrated into the fax machine, and the PC connected to the fax machine by way of an RS232 serial cable.  This is illustrated in Figure 2f of the '811 patent, also reproduced below.  The parent '558 patent does not include Figure 2f.

During initial prosecution, the examiner cited U.S. Patent No. 5,452,106 ("Perkins") against the claims as anticipatory art.  Perkins discloses a similar arrangement in which a PC uses a fax machine as a printer and scanner.

After a series of amendments, Infinity achieved an allowance by amending the claims as shown above.  This involved introducing the aforementioned term "passive link".  Notably, this term does not appear in the '811 patent nor does it appear in the parent '558 patent.  Nonetheless, Infinity relied heavily on this term and argued:

The Applicant creates a passive link between the facsimile machine and the computer in order to accommodate the signal transfer for printing or scanning.  Therefore, the Applicant does not require any intervening apparatus as does Perkins.  The applicant therefore believes Perkins did not anticipate the methods used by the Applicant.

Perkins' device 3 or card design requires a modem to be integrated into it in order to transfer signals for scanning or printing as part of his computer and facsimile transceiver interface.  In contrast, the Applicant can transfer digital signals between the facsimile transceiver and the computer without the need for a modem at the computer interface.

In making this argument, Infinity relied on the disclosure of Figure 2f, that did not have a modem between the fax machine and the PC.  Infinity stated that:

Contrary to the above, when the Applicant transfers digital data from the facsimile transceiver through a passive link for scanning to the computer, the non-intercepted data enters through the RS 232 type connector port of the computer and passes directly to the I/O Bus and is processed by the receiving circuits (i.e., UART, CPU) of the computer, providing a true non intercepted digital signal between the facsimile transceiver and the computer.

In effect, the Applicant's method does not use intermediary peripheral circuitry for signal interception, resulting in demodulation or modulation which is required by Perkins with his card or device 3.

Thus, Infinity's claims should have been narrowed by prosecution history estoppel to the embodiment of Figure 2f, or to at least exclude the embodiment of Figure 2b which does not have an RS 232 line and instead uses a modem between the fax machine and PC.

After issuance, the '811 patent was subject of three ex parte re-examinations.  In one, U.S. Patent No. 5,900,947 ("Kenmochi") was cited against the claims.  To antedate this reference, Infinity argued that claim 1 should be given the earlier effective filing date of the '558 parent.  But as noted above, the '558 patent does not include Figure 2f (recall that that '811 patent is a continuation in part).

In arguments, Infinity changed its tune and stated that "the RJ-11 telephone cable shown in Figs. 2b, 2c and 2d of the ['278 application] is the 'direct' and 'passive link.'"  This is problematic, because Infinity's previous arguments over Perkins effectively required the claims to be limited to the embodiment of Figure 2f, and also because Perkins arguably read on the embodiments of the '811 patent containing the RJ-11 cable.  Nonetheless, the re-examination resulted in another allowance.

In the District Court, Oki Data contended that Infinity took two conflicting positions during prosecution, one to overcome Perkins and the other to overcome Kenmochi.  According to the Oki Data, this created uncertainty "as to where the 'passive link' ends and where the 'computer' begins".  The District Court agreed, finding that "Infinity had taken materially inconsistent positions regarding the extent of the claimed "passive link"—specifically, whether it ends at the I/O bus inside the computer (as argued to distinguish Perkins) or merely at the computer's port (as argued to antedate Kenmochi)."  This rendered the claims indefinite.

On Appeal, the Federal Circuit agreed.  First, the Court noted that "a patent is invalid for indefiniteness if its claims, read in light of the specification delineating the patent, and the prosecution history, fail to inform, with reasonable certainty, those skilled in the art about the scope of the invention."  Of particular relevance is the principle that "[i]ndefiniteness may result from inconsistent prosecution history statements where the claim language and specification" otherwise do not afford the claims definiteness.

The facts on record, as described above, probably should have been sufficient to affirm the District Court.  But the Federal Circuit went further, stating that Infinity's arguments to overcome Perkins "would lead one of ordinary skill to believe a passive link does not end at the computer's port but rather reaches to the I/O bus of the computer."  Thus, the Court found both the claimed "passive link" and "computer" to be indefinite.

This appears to be a stretch, however.  Based on Figure 2f, one of ordinary skill in the art would understand that an RS 232 link is serial and would terminate at an RS 232 port.  Such a skilled person would also understand that the typical I/O bus is parallel.  Therefore, behind this port would be circuitry to serialize / de-serialize the bits transported by the link to a parallel format supported by the I/O bus.

The notion that the passive link would somehow extend to the I/O bus was not supported by the state of the art nor was it actually argued by Infinity.  Instead, Infinity wrote that "the non-intercepted data enters through the RS 232 type connector port of the computer and passes directly to the I/O Bus and is processed by the receiving circuits (i.e., UART, CPU) of the computer."  The language here about the UART circuit (which processes serialized communications) is somewhat confusing but should not override the more logical conclusion that the passive link is coextensive with the RS 232 cable.

The Court seems to recognize that it is wandering into Kafkaesque territory, and noted that "[w]e recognize that, in a vacuum, it might seem odd to hold 'computer' indefinite."  But the Court justified the outcome by shifting the blame to Infinity's own unclear statements.

In short, the outcome for this case appears to be correct.  Infinity took contradictory positions during prosecution, which is enough to render the claims indefinite.  The whole discussion of the boundary between the passive link and the computer being uncertain was superfluous at best and specious at worst.

Infinity Computer Products, Inc. v. Oki Data Americas, Inc. (Fed. Cir. 2021)
Panel: Chief Judge Prost and Circuit Judges Clevenger and Taranto
Opinion by Chief Judge Prost

Horizon Pharma, Inc. v. Dr. Reddy's Laboratories Inc. (Fed. Cir. 2021)

By Kevin E. Noonan --

Indefiniteness under U.S. patent law is a failure to satisfy the statutory requirements of 35 U.S.C. § 112(b), which reads:  "The specification shall conclude with one or more claims particularly pointing out and distinctly claiming the subject matter which the inventor or a joint inventor regards as the invention" (emphasis added).  The meaning of the statute was most recently explicated by the Supreme Court in Nautilus, Inc. v. Biosig Instruments, Inc., 572 U.S. 898, 910 (2014), which established the standard that the inherent imprecision of language cannot create "ambiguity . . . so great that it creates a 'zone of uncertainty' around the patent claims."  In practice, this led the Court to require "reasonable certainty" in claim language, a standard the patent claims at issue failed to satisfy in the Federal Circuit's recent decision in Horizon Pharma, Inc. v. Dr. Reddy's Laboratories Inc.

The case arose in litigation of over a combination therapy of a non-steroidal anti-inflammatory (NSAID) medication and a proton-pump inhibitor (PPI) that minimized the gastrointestinal complications of NSAID administration.  The asserted patents, U.S. Patent Nos. 9,220,698 and 9,393,208, claimed methods of treating certain diseases with such combination formulations; claim 1 of the '698 patent was deemed representative by the Federal Circuit panel:

1.  A method for treating osteoarthritis, rheumatoid arthritis, or ankylosing spondylitis comprising orally administering to a patient in need thereof an AM unit dose form and, 10 hours (±20%) later, a PM unit dose form, wherein:
the AM and PM unit dose forms each comprises:
naproxen, or a pharmaceutically acceptable salt thereof, in an amount to provide 500 mg of naproxen, and
esomeprazole or a pharmaceutically acceptable salt thereof in an amount to provide 20 mg of esomeprazole;
said esomeprazole, or pharmaceutically acceptable salt thereof, is released from said AM and PM unit dose forms at a pH of 0 or greater,
the AM and PM unit dose forms target:
    i) a pharmacokinetic (pk) profile for naproxen where:
        a) for the AM dose of naproxen, the mean C_max is 86.2 µg/mL (±20%) and the median T_max is 3.0 hours (±20%); and
        b) for the PM dose of naproxen, the mean C_max is 76.8 µg/mL (±20%) and the median T_max is 10 hours (±20%); and
    ii) a pharmacokinetic (pk) profile for esomeprazole where:
        a) for the AM dose of esomeprazole, the mean area under the plasma concentration-time curve from when the AM dose is administered to 10 hours (±20%) after the AM dose is administered (AUC_0–10,am) is 1216 hr*ng/mL (±20%),
        b) for the PM dose of esomeprazole, the mean area under the plasma concentration-time curve from when the PM dose is administered to 14 hours (±20%) after the PM dose is administered (AUC_0–14,pm) is 919 hr*ng/mL (±20%), and
        c) the total mean area under the plasma concentration-time curve for esomeprazole from when the AM dose is administered to 24 hours (±20%) after the AM dose is administered (AUC_0–24) is 2000 hr*ng/mL (±20%); and
the AM and PM unit dose forms further target a mean % time at which intragastric pH remains at about 4.0 or greater for about a 24 hour period after reaching steady state that is at least about 60%.

The District Court granted summary judgment in favor of defendants that this claim (and the remaining asserted claims) in the '968 and '208 patents were invalid for indefiniteness.  Among all the terms, technical and otherwise, in this claim the basis for the District Court's decision is the term "target," which the District Court construed to have its ordinary meaning of "set as a goal."  In so construing this claim term, the District Court rejected patentee Horizon's alternative construction, to "produce," because the specification used the words "produce" and "target" in ways that the term were not necessarily interchangeable.  Under this construction, the District Court held that "while the goal itself was clearly defined, the 'act of targeting that goal' was not."  Specifically, the District Court said that "'pills cannot be said to set goals,' and even if the claims were understood to say that it is a treating physician who sets the goals, the claims would require a treating physician to 'avoid having a subjective intent to achieve the defined outcomes.'"  Finally, the District Court found that the differing views of plaintiff's and defendant's experts as to the meaning of the term did not raise issues of material facts because the dispute involved opinion not fact.  This appeal followed.

The Federal Circuit affirmed, in an opinion by Judge Hughes, joined by Judges Moore and O'Malley.  The panel found the term in this case to be readily construed according to its plain meaning, saying that "the claim term 'target' is a commonly understood word, and nothing Appellants point to in the specification or the prosecution history suggests that it should be given anything other than its ordinary meaning," which was the meaning used by the District Court, i.e., "set as a goal."  (Somewhat parenthetically, the opinion rejected patentee's argument that case law favors a construction that preserves validity, because this principle applies only where "the court concludes, after applying all the available tools of claim construction, that the claim is . . . ambiguous," citing LiebelFlarsheim Co. v. Medrad, Inc., 358 F.3d 898, 911 (Fed. Cir. 2004), and that was not the case here in the Court's opinion).

While relying expressly on the Supreme Court's Nautilus opinion, the Federal Circuit also opined that "[o]ne circumstance in which claims are indefinite is where the claims, as properly construed, are nonsensical," citing Trs. of Columbia Univ. v. Symantec Corp., 811 F.3d 1359, 1366–67 (Fed. Cir. 2016).  In upholding the District Court's construction, and finding of indefiniteness, the panel asserted that "the 'target' clauses of claim 1 render the claim indefinite because '[t]he fact that a goal is clearly defined does not mean that the act of targeting that goal is clearly defined, and this is the crux of the definiteness problem here.'"  Simply put (as the District Court had) "a dose form, which is an inanimate object, cannot set a goal."

After agreeing with the District Court that a dispute between experts does not raise a genuine issue of material fact that would preclude summary judgment, the panel affirmed the construction and the District Court's decision that the claims were indefinite and consequently invalid.

Horizon Pharma, Inc. v. Dr. Reddy's Laboratories Inc. (Fed. Cir. 2021)
Panel: Circuit Judges Moore, O'Malley, and Hughes
Opinion by Circuit Judge Hughes

NZNP Finance Ltd. v. Actavis Laboratories UT, Inc. (Fed. Cir. 2020)

By Donald Zuhn --

On Tuesday, the Federal Circuit issued a per curiam Order in NZNP Finance Ltd. v. Actavis Laboratories UT, Inc., denying a petition for rehearing en banc filed by Plaintiffs-Appellants HZNP Finance Ltd. and Horizon Therapeutics USA, Inc.  The Court also denied Plaintiffs-Appellants a panel rehearing.

Circuit Judge Lourie, joined by Circuit Judges Newman, O'Malley, and Stoll, dissented from the denial of the petition for rehearing en banc, arguing that the panel majority had "erroneously misconstrued the 'consisting essentially of' language in evaluating the definiteness requirement of 35 U.S.C. § 112."  At issue was claim 49 of U.S. Patent No. 8,252,838, which reads:

49.  A topical formulation consisting essentially of:
    1–2% w/w diclofenac sodium;
    40–50% w/w DMSO;
    23–29% w/w ethanol;
    10–12% w/w propylene glycol;
    hydroxypropyl cellulose; and
    water to make 100% w/w,
    wherein the topical formulation has a viscosity of 500–5000 centipoise.

The panel majority had affirmed the determination by the District Court for the District of New Jersey that claim 49 was indefinite because of inconsistencies in the meaning of "better drying time."  The '838 patent specification discloses that the claimed formulation can be used as an anti-inflammatory, or analgesic.  The specification also discloses that the advantages of the claimed formulation are better drying time, higher viscosity, increased transdermal flux, greater pharmacokinetic absorption, and favorable stability.

The dissent begins by noting that "[i]t is not disputed that 'consisting essentially of' generally means that the composition not contain, in addition to its enumerated components, materials that materially affect the basic and novel properties of the invention."  The dissent points out that the term "better drying time" is not recited in the claim, adding that "it is the claims that the statute requires be definite."

With respect to claim 49, the dissent notes that "[t]he utility of the claimed invention, recited in the specification, is as an anti-inflammatory, or analgesic, because those are the principal properties of diclofenac, the main ingredient of the composition."  As for the advantage of better drying time, the dissent contends that "it is the language of the claims that must not be indefinite, not the understanding or clarity of an advantage of the invention," pointing out that "[t]he advantages of the invention, its utility and its basic and novel properties, are not in the claims."

Noting that it is not necessary to recite the utility of a claimed compound (e.g., as an anti-inflammatory) in the claims, nor is it necessary to recite in the claims how that utility is measured, the dissent concludes that "aspects of the utility or its measurement are not relevant to indefiniteness of the claims."  The dissent then asks "since how one measures anti-inflammatory activity does not create an indefiniteness issue, why should measuring better drying time?"  The dissent also wonders "whether, if this patent did not recite the methods by which better drying time was measured, any indefiniteness of the 'consisting essentially of' language would have arisen at all."  Because "under the rule this opinion purports to adopt, any uncertainty concerning advantages, utility, or methods of determining such could . . . be translated into indefiniteness of claims," Judge Lourie dissented from the Federal Circuit's decision not to rehear the case en banc.

NZNP Finance Ltd. v. Actavis Laboratories UT, Inc. (Fed. Cir. 2020)
Per curiam
Circuit Judge Lourie dissenting from the denial of the petition for rehearing en banc, joined by Circuit Judges Newman, O'Malley, and Stoll

HZNP Medicines LLC v. Actavis Laboratories UT, Inc. (Fed. Cir. 2019)

By Kevin E. Noonan --

The Federal Circuit earlier this week affirmed a District Court's decision invalidating almost all of the claims asserted against an ANDA filer, in HZNP Medicines LLC v. Actavis Laboratories UT, Inc.  Nevertheless, because a claim was held invalid and infringed, the proposed generic compound is delayed from coming to market.

The case arose as ANDA litigation over HZNP Medicines' osteoarthritis drug, PENNSAID® 2%.  After Actavis (nee Watson Labs) sent HZNP its Paragraph IV letter HZNP filed suit (asserting somewhat prolixically) twelve Orange Book-listed patents:  U.S. Patent Nos. 8,217,078; 9,132,110; 8,618,164; 9,168,304; 9,168,305; 8,546,450; 9,101,591; 8,563,613; 9,220,784; 8,871,809; 8,252,838; and 9,066,913.  These patents formed two groups as considered by the Federal Circuit:  the first group comprising the '450, '078, '110, and '164 patents, directed to methods of using diclofenac formulations for treating osteoarthritis, particularly in the knee.  Claim 10 of the '450 patent was deemed illustrative:

10.  A method for applying topical agents to a knee of a patient with pain, said method comprising:
    applying a first medication consisting of a topical diclofenac preparation to an area of the knee of said patient to treat osteoarthritis of the knee of said patient, wherein the topical diclofenac preparation comprises a therapeutically effective amount of a diclofenac salt and 40–50% w/w dimethyl sulfoxide;
    waiting for the treated area to dry;
    subsequently applying a sunscreen, or an insect repellant to said treated area after said treated area is dry, wherein said step of applying a first medication does not enhance the systemic absorption of the subsequently applied sunscreen, or insect repellant; and
    wherein said subsequent application occurs during a course of treatment of said patient with said topical diclofenac preparation.

The remaining asserted patents (the '838, '591, '304, '305, '784, '613, '809, and '913 patents) constituted the second group; claim 49 of the '838 patent is illustrative of what is claimed in these patents:

49.  A topical formulation consisting essentially of:
    1–2% w/w diclofenac sodium;
    40–50% w/w DMSO;
    23–29% w/w ethanol;
    10–12% w/w propylene glycol;
    hydroxypropyl cellulose; and
    water to make 100% w/w, wherein the topical formulation has a viscosity of 500–5000 centipoise.

The District Court found all but one of the asserted claims to be invalid for indefiniteness based on its construction of three claim terms:

• "the topical formulations produced less than 1% of impurity A after 6 months at 25 and 60% humidity" was indefinite for failing to provide any definition for "impurity A";
• "the formulation degrades by less than 1% over 6 months" was indefinite because there were no means specified for evaluating indefiniteness; and
• (most curiously) "consisting essentially of" was indefinite because "the parties disputed what were "basic and essential" properties of the claimed formulations and thus the scope of what additional components could be added in excess of the recited elements was indefinite.

With regard to the District Court's assessment of the "basic and essential" properties of the claimed formulations, the Court recognized five properties:  "(1) better drying time; (2) higher viscosity; (3) increased transdermal flux; (4) greater pharmacokinetic absorption; and (5) favorable stability."  The Court limited its determination to the first, "better drying time" property, and found it to be indefinite because the specification set forth two methods for measuring this property gave inconsistent results.  This persuaded the District Court that the skilled worker would not know which measurement method to use, which precluded the skilled artisan from having the "reasonable certainty" required under Nautilus, Inc. v. Biosig Instruments, Inc., 572 U.S. 898, 910 (2014), for the "consisting essentially of" term to be indefinite.  In response to HZNP's motion for reconsideration (which the District Court denied), the Court further found the "favorable stability" property to be indefinite because "the specification failed to provide the requisite guidance" for deterring stability.

Consequently, the District Court granted summary judgment of noninfringement, either literal or for inducement, in favor of Actavis.  The basis for this decision regarding inducement was a comparison of HZNP'S and Actavis' formulation label.  While HZNP's claimed method required the practice of three steps ("(1) application of the medication to knee, (2) waiting for the area to dry, and (3) application of sunscreen, insect repellant, or a second topical medication"), the labels differed because "Horizon's claimed method requires application of a second topical agent whereas [both] the [HZNP and Actavis] label merely permits, without encouraging, post-product application of sunscreen, insect repellant, or a second topical medication."

The parties went to trial on the sole remaining claim, claim 12 of the '913 patent, reciting a method of treatment comprising administering the claimed formulation twice daily.  Actavis stipulated that if valid its ANDA product would infringe, but argued the claim was obvious.  The prior art Actavis relied upon was HZNP's earlier PENNSAID® 1.5% product, which Actavis asserted had deficiencies known in the prior art ("frequent application and vulnerability to run-off") and the changes HZNP made in the formulation would have been reasonably expected to address these known deficiencies (and that the changed components were also known in the art, being merely "obvious optimizations of result-effective variables that produced a predictable result").  The District Court agreed with HZNP, that "the field of topical pharmaceutical formulations is complex and unpredictable" and that the litany of changes required to change the 1.5% formulation to the claimed 2.0% formulation would not have been obvious.  The parties appealed.

The Federal Circuit affirmed, in an opinion by Judge Reyna joined by Chief Judge Prost; Judge Newman concurred-in-part and dissented-in-part.  Regarding the judgment of invalidity for indefiniteness, the majority agreed that HZNP's failure to identify "impurity A" was fatal to the invalidated claims, rejecting HZNP's argument that the skilled worker would have understood, from sources like pharmacopeias, the identity of this impurity from how diclofenac was known to degrade under the conditions set forth in the specification.  Relying on the claim language, the majority found no basis for assuming that the skilled worker would have identified impurity A as being a diclofenac degradation product to the exclusion of other sources of this impurity in the formulation.  The extrinsic evidence was properly considered by the District Court to be unavailing, according to Judge Reyna and the Chief Judge, because the specification merely disclosed the results of the analytical methods but did rely on the data present in pharmacopeias to identify the impurity.  The District Court and the majority here linked its finding that "impurity A' was indefinite to support the further finding that the term "degrades" was indefinite ("Since "impurity A" is indefinite, it logically follows that another term, such as the "degrades" term, which relies on "impurity A" for its construction, must also be indefinite.")

The panel majority's explanation of why it affirmed the District Court's finding that "consisting essentially of" was indefinite was more involved.  While recognizing that this transition phrase "has a distinct meaning within our jurisprudence," the majority also agreed with the District Court that the indefiniteness question implicates the nature of the "basic and novel" properties of the formulation consisting of the expressly recited components; the phrase permits the claims to encompass formulations "consisting of only the specified materials and those that do not materially affect the basic and novel properties of the claimed invention."  Using the specification as a guide, the majority agreed that the District Court properly identified five basic and novel properties.  The majority then concluded that the indefiniteness standard enunciated by the Nautilis Court properly applied to those properties, rejecting HZNP's contention that the standard applied only to the elements recited in the claims:

By using the phrase "consisting essentially of" in the claims, the inventor in this case incorporated into the scope of the claims an evaluation of the basic and novel properties.  The use of "consisting essentially of" implicates not only the items listed after the phrase, but also those steps (in a process claim) or ingredients (in a composition claim) that do not materially affect the basic and novel properties of the invention.  Having used the phrase "consisting essentially of," and thereby incorporated unlisted ingredients or steps that do not materially affect the basic and novel properties of the invention, a drafter cannot later escape the definiteness requirement by arguing that the basic and novel properties of the invention are in the specification, not the claims.  Indeed, this contravenes the legal meaning associated with the phrase "consisting essentially of."  And a holding to the contrary would promote the innovation-discouraging "zone of uncertainty" that the Supreme Court has warned against.

The majority then set forth a discussion illustrating the distinctions between applying these principles in claim construction and the ultimate question of infringement, concluding that the Court's jurisprudence directs "courts evaluating claims that use the phrase "consisting essentially of" may ascertain the basic and novel properties of the invention at the claim construction stage, and then consider if the intrinsic evidence establishes what constitutes a material alteration of those properties."  Here, the majority held that the District Court properly applied these rubrics in coming to the conclusion that the term "consisting essentially of" was indefinite based on the "basic and novel" feature of better drying time.

Coming to questions of infringement, the panel majority affirmed the District Court's holding that practice of Actavis' product according to its label did not induce infringement.  Inducement here would require the instruction in Actavis' label to perform the three distinct steps, whereas the District Court held, and the Federal Circuit majority agreed that, only the first step, applying the inventive formulation, was required to be performed.

Finally, regarding the District Court's holding that Actavis had not shown by clear and convincing evidence that claim 12 of the '913 patent was obvious, the majority here found no clear error in the District Court's reliance on expert testimony regarding the differences between the 1.5% and claimed 2% varieties of PENNSAID^® and affirmed.

Judge Newman's dissent was based on the majority's indefiniteness determinations regarding the transition phrase "consisting essentially of" and whether the Actavis label induced infringement, characterizing the majority's opinion in the former to be "departures from long-established law and long-understood practice" and in the latter to be "contrary to statute and precedent."  With regard to the majority's decision regarding the term "consisting essentially of," Judge Newman believes the majority's decision to be "not correct as a matter of claim construction, it is not the law of patenting novel compositions, and it is not the correct application of section 112(b)."  Judge Newman faults the majority for incorporating method steps (better drying time) or properties (increased stability) into indefiniteness determinations of composition of matter claims.  And Judge Newman does not believe that Actavis established invalidity by clear and convincing evidence.  But the Judge's principal concern was that the majority's decision will "cast countless patents into uncertainty."  Finally, the Judge believes that the possibility that some patients may not follow Actavis' label instructions is not a proper basis for absolving them from infringement liability.

HZNP Medicines LLC v. Actavis Laboratories UT, Inc. (Fed. Cir. 2019)
Panel: Chief Judge Prost and Circuit Judges Newman and Reyna
Opinion by Circuit Judge Reyna; opinion concurring in part and dissenting in part by Circuit Judge Newman

Indivior Inc. v. Dr. Reddy's Laboratories, S.A. (Fed. Cir. 2019)

By Kevin E. Noonan --

Last month, the Federal Circuit affirmed decisions from four separate trials in the District of Delaware involving seven different defendants regarding validity and infringement of patents directed to an opioid addiction treatment in Indivior Inc. v. Dr. Reddy's Laboratories, S.A.

The case arose in ANDA litigation over Indivior's suboxone film product Suboxone®, a rapidly dissolving film formulation of two active ingredients:  buprenorphine, which decreases a patient's need for opioids, and naloxone, which deters abuse.  The challenge for such formulations is drug content uniformity, i.e., having the ingredients homogeneously distributed in the films, which are produced from larger sheets that are cut into individual dosage units based on a particular size and shape to provide the appropriate dose of each drug.  U.S. Patent Nos. 8,017,150, 8,603,514, and 8,900,497, licensed by Indivior from Aquestive Therapeutics, Inc., disclose methods for mixing the drugs with a polymer, casting the mixture to produce a wet film, and then "controllably drying the film to produce a solid sheet having less than ten percent variance in active ingredient throughout any given area."  Relevant to the issues before the Court, prior art methods (involving drying the films by applying warm air to only the top surface) were inadequate to achieve content uniformity, with films produced in this manner having a "rippled" surface.  The invention overcame these limitations by "applying heat to the bottom of the film, introducing controlled microwaves, controlling the air flow above and beneath the film, and employing furnace filters."  A fourth patent, U.S. Patent No. 8,475,832, claims film formulations per se and is owned by Indivior.

The specification of the '514 patent disclosed that "drug content uniformity is required by regulatory authorities yet difficult to achieve in practice because of problems in manufacturing the films" and "[m]ultiple factors in the film-making process can affect uniformity."  According to the claims of the '514 patent, "(1) the viscosity of the matrix must be "sufficient to aid in substantially maintaining non-self-aggregating uniformity" of the active ingredients (the "viscosity limitation"); and (2) the matrix must be "capable of being dried without loss of substantial uniformity of the active [ingredients]" (the "drying limitation").  The specification further discloses that "using conventional drying methods, which apply hot air to the top of the film, produces nonuniform films."  To overcome these issues, "the specification discloses controlled drying processes that differ from conventional techniques" that include "controlled bottom drying or controlled microwave drying."  The '150 patent is directed to uniform pharmaceutical films themselves and components thereof.

Indivior brought suit against Dr. Reddy's Laboratories (S.A and Inc. entities); Watson Laboratories Inc.; Actavis Laboratories UT, Inc.; Teva Pharmaceuticals USA Inc.; Par Pharmaceuticals, Inc.; Intelgenx Technologies Corp.; and Alvogen Pine Brook, LLC.  The parties had engaged in ANDA litigation involving the '514, '497, and 150 patents brought in the District of Delaware.  Claim 62 of the '514 patent and claim 1 of the '150 patent are informative:

62.  A drug delivery composition comprising:
    (i) a cast film comprising a flowable water-soluble or water swellable film-forming matrix comprising one or more so substantially water soluble or water swellable polymers; and a desired amount of at least one active;
    wherein said matrix has a viscosity sufficient to aid in substantially maintaining non-self-aggregating uniformity of the active in the matrix;
    (ii) a particulate active substantially uniformly stationed in the matrix; and
    (iii) a taste-masking agent selected from the group consisting of flavors, sweeteners, flavor enhancers, and combinations thereof to provide taste- masking of the active;
    wherein the particulate active has a particle size of 200 microns or less and said flowable water-soluble or water swellable film-forming matrix is capable of being dried without loss of substantial uniformity in the stationing of said particulate active therein; and
    wherein the uniformity subsequent to casting and drying of the matrix is measured by substantially equally sized individual unit doses which do not vary by more than 10% of said desired amount of said at least one active.

1.  A mucosally-adhesive water-soluble film product comprising:
    an analgesic opiate pharmaceutical active; and
    at least one water-soluble polymer component consisting of polyethylene oxide in combination with a hydrophilic cellulosic polymer;
    wherein:
        the water-soluble polymer component comprises greater than 75% polyethylene oxide and up to 25% hydrophilic cellulosic polymer;
        the polyethylene oxide comprises one or more low molecular weight polyethylene oxides and one or more higher molecular weight polyethylene oxides, the molecular weight of the low molecular weight polyethylene oxide being in the range 100,000 to 300,000 and the molecular weight of the higher molecular weight polyethylene oxide being in the range 600,000 to 900,000; and
        the polyethylene oxide of low molecular weight comprises about 60% or more in the polymer component.

Indivior accused Dr. Reddy's Labs of infringing the '514 and '150 patents, and both Dr. Reddy's Labs and Watson of infringing the '497 patent; Watson of infringing the '514 and '832 patents; and Alvogen of infringing the '514 and '497 patents.  (In a footnote, the opinion identifies the '514 patent claims asserted by Indivior against the various defendants:  claims 62–65, 69, 71, and 73 against Dr. Reddy's Labs; claims 62, 64, 65, 69, and 73 against Watson; and claims 62, 63, 65, 69, 71, and 73 against Alvogen.)

In four bench trials the District Court found the '514, '497, and '150 patents were not invalid for obviousness and the '514 patent was not invalid for indefiniteness.  Regarding infringement, the Court found Watson infringed the '514 patent under 35 U.S.C. § 271(e)(2), but that Dr. Reddy's Laboratories did not infringe the '514 patent nor the '150 patent, and Alvogen Pine Brook did not infringe the '514 patent.  Finally, the District Court found claims 15-19 of the '832 patent to be invalid.  (The Patent Trial and Appeal Board held claims 15–19 unpatentable as anticipated and obvious in a separate, parallel inter partes review proceeding.)

The Federal Circuit affirmed all the District Court's determinations but vacated invalidation of claims 15-19 of the '872 patent as moot in view of the PTAB's IPR decision, in a decision by Judge Lourie joined by Judge Newman; Judge Mayer dissented based on his differing reading of the references asserted by Defendants against both the ‘514 and ‘150 patents.  The opinion sets forth its basis for affirming the District Court's finding of non-infringement of the '514 patent by Dr. Reddy's Laboratories and Alvogen based on claim construction of the drying limitation.  In both cases, the District Court construed the drying limitation of the '514 patent claims to mean "dried without solely employing conventional convection air drying from the top," and further that patentee's specification disclaimed (indeed, disparaged; see "Indivior Inc. v. Dr. Reddy's Laboratories, S.A. (Fed. Cir. 2018)") conventional convection air drying from the top surface of the film.  Similarly, the Court found that Alvogen's film manufacturing process dries the films primarily from the top and does not satisfy the drying limitation recited in the '514 patent claims.  Finding that Defendants used conventional convection air drying from the top surface of the film, the District Court found that Defendants did not infringe and the Federal Circuit affirmed.

Regarding the District Court's determination that Watson infringed the '514 patent, the Federal Circuit held that the District Court did not abuse its discretion when it properly refused to reopen its judgment under Federal Rule of Civil Procedure 59.  Watson had amended its ANDA to eliminate bottom heating sources, but had not requested construction of the drying limitation in the claims of the '514 patent.  On these facts, the Federal Circuit found "no manifest injustice" in the District Court's decision despite the different outcomes for two generic versions of Indivior's patented films.  Separate trials had utilized separate strategies:  Dr. Reddy's Labs and Watson challenged the drying limitation in one case, but Watson did not in the other, and this justified the disparate outcomes regarding infringement.  The Federal Circuit opinion noted that "it is neither unusual nor unjust for a party to be bound by its litigation decisions, particularly here where Watson was fully aware of but did not request the claim construction it now seeks."  In addition, accepting the broader construction of this term strengthened Watson's invalidity position but at the expense of its noninfringement case.  On the merits, the District Court found that the viscosity of Watson's generic films fell "squarely within the most preferred range identified in the '514 patent."  The Federal Circuit found no clear error in this determination and affirmed.

Regarding infringement of the '150 patent claims under Indivior's doctrine of equivalents contentions, the opinion notes that claim 1 of the '150 patent recites a pharmaceutical film with: (1) "at least one water-soluble polymer component consisting of polyethylene oxide [PEO] in combination with a hydrophilic cellulosic polymer [HCP]"; wherein (2) "the water-soluble polymer component comprises greater than 75% [PEO] and up to 25% [HCP]"; (3) the PEO comprises at least one L-PEO and at least one H-PEO; and (4) the L-PEO "comprises about 60% or more in the polymer component."  It was undisputed that Dr. Reddy's Labs substituted polyvinyl pyrrolidone for hydrophilic cellulosic polymer, and the District Court held that Indivior could not capture these formulations under the doctrine of equivalents because embodiments of the claimed films comprising PVP were disclosed in the '150 patent specification but not claimed.  Hence these embodiments were dedicated to the public according to the District Court, citing Johnson & Johnston Assocs. Inc. v. R.E. Serv. Co., 285 F.3d 1046, 1054 (Fed. Cir. 2002) (en banc).  The Federal Circuit found no clear error in this determination and affirmed.

Turning to Defendants' various invalidity contentions, the Federal Circuit affirmed the District Court's finding that the claims of the '514 patent were not indefinite.  The basis for Watson's indefiniteness contention focused on the claim term "cast film comprising a flowable water-soluble or water swellable film-forming matrix" because the film is not "flowable" in its final dosage form.  Watson's position was that the recited property needed to be possessed by accused infringing article, but the District Court disagreed and analogized to the Gemtron Corp. v. Saint-Gobain Corp., 572 F.3d 1371, 1375–76 (Fed. Cir. 2009) case, where the claimed property was only present during assembly.  The Federal Circuit characterized as nonsensical the argument (which Watson and Teva advanced at trial) that the finished film product needed to be flowable to fall within the scope of the claim.  The Federal Circuit agreed with the District Court that "a product claim may recite elements 'in the state in which they exist during manufacture, before the final product exists'" and thus the claims were not indefinite.

The Court also affirmed the District Court's decision that the claims of the '514 patent were not obvious.  Dr. Reddy's Labs asserted three prior art references at trial:  U.S. Patent Nos. 4,849,246 ("Schmidt"), 6,552,024 ("Chen"), and 5,881,476 ("Strobush").  The '246 patent discloses methods for making pharmaceutical films but Indivior proffered persuasive expert testimony that the uniformity of the film not assessed.  The '024 patent taught top-air drying pharmaceutical films.  And the '476 patent taught methods for drying non-pharmaceutical films without introducing "mottle."  The District Court found insufficient motivation to combine these references on two grounds.  First, there was no evidence that the '246 and '024 patents disclosed uniform drug content as a property of the disclosed films (a property required of the claimed invention), and second, the status of pharmaceutical films was "nascent."  In addition, the Court noted that there was even less motivation to combine the '476 patent because this reference did not disclose not a pharmaceutical film.  Finally, Indivior asserted evidence of secondary considerations that supported its nonobviousness position.

The Federal Circuit found no clear error on these facts.  It found Dr. Reddy's Labs' arguments disputing the level of skill in the art used by the District Court to be "nitpicking," and that the District Court properly relied on expert testimony regarding the relationship between "mottle" in the prior art and uniformity as recited in the '514 patent claims.  The assertion by Dr. Reddy's Labs of the skilled artisan's expectation of success was undercut, in the Court's view, by the "multiple factors throughout the manufacturing process that contribute to the uniformity of pharmaceutical films, that adjusting the various factors would have been unintuitive, and that the field was still emergent at the time of invention."  The Federal Circuit found no clear error in District Court's finding regarding the totality of the evidence for these facts and affirmed the nonobviousness of the '514 patent claims.

Finally the Federal Circuit affirmed the District Court's determination that Watson had not established by clear and convincing evidence that the claims of the '150 patent were obvious.  This determination rested on whether the '150 patent was entitled to the priority date of the earlier-filed U.S. Provisional Patent Application No. 60/473,902, i.e., whether that application satisfied the disclosure requirements of 35 U.S.C. § 112 for the '150 patent claims.  The District Court held that the priority claim was proper (and thus the '150 patent claims were not obvious), relying expressly on the following disclosure in the '902 application:

For instance, certain film properties, such as fast dissolution rates and high tear resistance, may be attained by combining small amounts of high molecular weight PEOs with larger amounts of lower molecular weight PE[O]s.  Desirably, such compositions contain about 60% or greater levels of the lower molecular weight PEO in the PEO-blend polymer component.

To balance the properties of adhesion prevention, fast dissolution rate, and good tear resistance, desirable film compositions may include about 50% to 75% low molecular weight PEO, optionally combined with a small amount of a high molecular weight PEO, with the remainder of the polymer component containing a hydrophilic cellulosic polymer (HPC or HPMC).

The Federal Circuit found no clear error in this determination by the District Court because "the application discloses that a polymer component with 60% L-PEO has desirable properties and that the remainder of the component may include H-PEO and HCP," consistent with '150 patent claims.

Indivior Inc. v. Dr. Reddy's Laboratories, S.A. (Fed. Cir. 2019)
Panel: Circuit Judges Newman, Mayer, and Lourie
Opinion by Circuit Judge Lourie; dissenting opinion by Circuit Judge Mayer

Tinnus Enterprises, LLC v. Telebrands Corp. (Fed. Cir. 2018)

When the PTAB Attacks!

By Andrew Williams --

In the past few years, the public's perception of the patent system in the United States has been at a low point.  One of the causes of this lack of confidence in the system has been the increase in abusive patent litigation from entities that have been labelled as "patent trolls."  This problem has been magnified (and likely blown out of proportion) by the mainstream media that has been reporting on (and exaggerating) the evils of the current patent system.  The patent system's alleged failings appeared to reach the public consciousness with the two episodes of the NPR show "This American Life" entitled "When Patents Attack!" and "When Patents Attack . . . Part Two!"  As we reported at the time, these episodes concluded by focusing on a single case and extrapolated all of its "perceived problems to be indicative of the entire patent system, leaving the uninitiated to probably question why we even have a patent system in the first place."  This was followed by even more one-sided "reporting" from the NPR "Planet Money" podcast (see "When NPR Podcasters Hit the Patent System") and John Oliver's HBO commentary/comedy show "Last Week Tonight."  A response from defenders of the patent system (outside of the blogosphere) has been slow in coming.  But a couple of new videos released by, of all places, the Federalist Society does just that by highlighting the plight of Josh Malone and his struggles defending his invention "Bunch O Balloons" (see here and here).  Mr. Malone's company Tinnus Enterprises has been embroiled in multiple district court litigations and post-grant review proceedings before the PTAB.  The latest chapter of that saga occurred on May 30, 2018, when the Federal Circuit reversed and remanded the Board's final written decision in PGR2015-00018.

For those readers unfamiliar with "Bunch O Balloons," (and who have not yet watched the above-referenced videos), they can be seen in the following figure next to an accused infringing device (taken from a prior Federal Circuit opinion on the subject patents):

These devices can fill multiple water balloons (or as they are known in the art "fluid-filled inflatable containers") in less time than it normally takes to fill and tie a single water balloon.  Figure 1 from U.S. Patent 9,051,066 provides a more detailed explanation of the device:

These devices have been very popular, from the initial Kickstarter campaign to the alleged copying of the accused infringing devices.

The history of the PTAB proceedings and the concurrent district court litigation is extensive.  In short, on the day the '066 patent issued, June 9, 2015, Tinnus filed suit against Telebrands and moved for a preliminary injunction.  Telebrands filed its first PGR against a Tinnus patent (and the PGR that is the subject of this appeal) on June 22, 2015.  On September 11, 2015, after the Board instituted the PGR, the Eastern District of Texas granted the injunction after determining that Telebrands had "not raised a substantial question concerning the validity of the '066 [p]atent based on the claim term 'substantially filled' being indefinite."  That decision was affirmed by the Federal Circuit in a prior opinion on January 24, 2017.  The month prior, the PTAB issued its final written decision finding the same claim term to be indefinite, thereby rendering all challenged claims to be unpatentable.  Tinnus appealed both this determination and the Board's decision granting institution.

What the Patent Office Gives, the Patent Office Takes Away

This case highlights the frustration experienced by patent owners when their patents are challenged at the Patent Office in post-issuance proceedings.  In essence, the same institution that granted the intellectual property right turns around and takes it away, often after substantial investment has been made in reliance on that grant.  In this case, issued claim 1 read (with the relevant section highlighted):

1.  An apparatus comprising:
    a housing comprising an opening at a first end, and a plurality of holes extending through a common face of the housing at a second end;
    a plurality of flexible hollow tubes, each hollow tube attached to the housing at a respective one of the holes at the second end of the housing;
    a plurality of containers, each container removably attached to a respective one of the hollow tubes; and
    a plurality of elastic fasteners, each elastic fastener clamping a respective one of the plurality of containers to a corresponding hollow tube, and each elastic fastener configured to provide a connecting force that is not less than a weight of one of the containers when substantially filled with water, and to automatically seal its respective one of the plurality of containers upon detaching the container from its corresponding hollow tube, such that shaking the hollow tubes in a state in which the containers are substantially filled with water overcomes the connecting force and causes the containers to detach from the hollow tubes thereby causing the elastic fasteners to automatically seal the containers, wherein the apparatus is configured to fill the containers substantially simultaneously with a fluid.

The claim term "substantially filled" was not defined in the specification, nor were the two words used in conjunction at any point in the disclosure.  Instead, the term was added by the Examiner in an Examiner's Amendment that was included in the Notice of Allowability.  And the focus of the Amendment was not on the "substantially filled" limitation, but rather was included in a description of the configuration and functional capability of the elastic fasteners, that was described by the Examiner as necessary to distinguish the prior art.  As the Federal Circuit put it, it "presume[d] that an examiner would not introduce an indefinite term into a claim when he/she choose to amend the claim for the very purpose of putting the application in a condition for allowance."

Correspondingly, the Federal Circuit found that the patent was "not indefinite under the Nautilus standard because the claims, viewed in light of the specification and prosecution history, inform a person of ordinary skill about the scope of the invention with reasonable certainty."  In addition, the Court found that "the claims, in the context of the specification, 'notify the public of what is within the protections of the patent, and what is not,'" thereby also satisfying the standard articulated in In re Packard.  This conclusion was perhaps not surprising in view of the prior Federal Circuit decision in which the Court found "it difficult to believe that a [person of ordinary skill in the art, defined as] a person with an associate's degree in a science or engineering discipline[,] who has read the specification and relevant prosecution history would be unable to determine with reasonable certainty when a water balloon is 'substantially filled.'"  As a result, the Court reversed and remanded for the Board to consider the obviousness allegations.

There were other interesting legal and procedural issues considered by the Court that were ultimately deferred to the future.  And did we mention that this was one of the first (if not the first) PGR appeals considered by the Federal Circuit.  Nevertheless, this case stands as a prime example of why patent owners are frustrated with the current system, and why the attack on the patent system has perhaps gone too far.

Tinnus Enterprises, LLC v. Telebrands Corp. (Fed. Cir. 2018)
Nonprecedential disposition
Panel: Circuit Judges O'Malley, Wallach, and Hughes
Opinion by Circuit Judge O'Malley

Mastermine Software, Inc. v. Microsoft Corp. (Fed. Cir. 2017)

By Michael Borella --

Mastermine brought a patent infringement action against Microsoft in the District of Minnesota.  At issue were four claims of U.S. Patent No. 7,945,850 and three claims of U.S. Patent No. 8,429,518.  After claim construction and indefiniteness rulings came down unfavorably for Mastermine, the parties agreed to a stipulated judgment of non-infringement and invalidity of the patents.  Mastermine appealed.

As explained by the Federal Circuit on review:

The patents describe a process by which an electronic worksheet is automatically created.  Within this electronic worksheet, a multi-dimensional analysis table, known as a pivot table, allows the user to quickly and easily summarize or view large amounts of CRM data.  For example, the user can rotate the rows and columns of a pivot table to see different summaries of the CRM data, filter the data by displaying different pages, or display the details for [an] area of interest.

The District Court held that several of the asserted claims were invalid for claiming both a system and method steps.  While the Federal Circuit eventually reversed this holding, its review of the relevant case law is instructive for understanding the claim drafting nuances at hand.

The Court began by noting that a claim covering both an apparatus and a method of using that apparatus is indefinite under 35 U.S.C. § 112, paragraph 2.  According to the Court, the concern is that doing so "within a single claim can make it unclear whether infringement occurs when one creates an infringing system, or whether infringement occurs when the user actually uses the system in an infringing manner."  However, "apparatus claims are not necessarily indefinite for using functional language," as means-plus-function language is explicitly permitted by statute.

In order to further illustrate the differences between permissible and impermissible functional language in apparatus claims, the Court reviewed its recent cases addressing this matter.

In IPXL Holdings, L.L.C. v. Amazon.com, Inc., the claim at issue recited:

The system of claim 2 [including an input means] wherein the predicted transaction information comprises both a transaction type and transaction parameters associated with that transaction type, and the user uses the input means to either change the predicted transaction information or accept the displayed transaction type and transaction parameters.

The problem with this claim is whether infringement occurs "when one creates a system that allows the user to change the predicted transaction information or accept the displayed transaction, or whether infringement occurs when the user actually uses the input means to change transaction information or uses the input means to accept a displayed transaction."  Thus, the claim was held indefinite.

In In re Katz Interactive Call Processing Patent Litigation, a claim recited:

[A] system with an interface means for providing automated voice messages . . . to certain of said individual callers, wherein said certain of said individual callers digitally enter data.

Even though the active step of individual callers digitally entering data appears in a wherein clause, this claim exhibited the same problem as that of In re Katz -- is the claim infringed when the system is made or when the active step occurs?  This claim was held indefinite as well.

In Rembrandt Data Techs., LP v. AOL, LLC, a challenged claim recited:

A data transmitting device for transmitting signals corresponding to an incoming stream of bits, comprising:
    first buffer means . . . ;
    fractional encoding means . . . ;
    second buffer means . . . ;
trellis encoding means for trellis encoding the frames from said second buffer means; and
    transmitting the trellis encoded frames.

Here, there was little controversy.  The apparatus claim clearly includes a method step, rendering it indefinite.

On the other hand, a number of cases have found functional language in apparatus claims to be definite due to how the functional language is drafted.  In HTC Corp. v. IPCom GmbH & Co., KG, the claim recited:

A mobile station for use with a network including a first base station and a second base station that achieves a handover from the first base station to the second base station by:
    storing link data for a link in a first base station,
    holding in reserve for the link resources of the first base station, and
    when the link is to be handed over to the second base station:
    initially maintaining a storage of the link data in the first base station,
    initially causing the resources of the first base station to remain held in reserve, and
    at a later timepoint determined by a fixed period of time predefined at a beginning of the handover, deleting the link data from the first base station and freeing up the resources of the first base station, the mobile station comprising:
    an arrangement for reactivating the link with the first base station if the handover is unsuccessful.

According to the Court, this claim "does not recite a mobile station and then have the mobile station perform the six enumerated functions, but rather . . . claim merely establishes those functions as the underlying network environment in which the mobile station operates."  Thus, infringement only occurs when one makes, offers to sell, or sells the mobile station, or uses it in this network environment.  Therefore, the claim is valid.

In Microprocessor Enhancement Corp. v. Tex. Instruments Inc., the claim in question recited:

A pipelined processor for executing instructions comprising:
    a conditional execution decision logic pipeline stage . . . ;
                                                 * * *
    the conditional execution decision logic pipeline stage performing a boolean algebraic evaluation of the condition code and said conditional execution specifier and producing an enable-write with at least two states, true and false;
    said enable-write when true enabling and when false disabling the writing of instruction results at said write pipeline stage;
    the conditional execution decision logic pipeline stage, when specified by the conditional execution specifier, determining the enable-write using the boolean algebraic evaluation.

Here, the Court held that the claim is "clearly limited to a pipelined processor possessing the recited structure and capable of performing the recited functions, and is thus not indefinite."

In UltimatePointer, L.L.C. v. Nintendo Co., a claim recited "a handheld device including: an image sensor, said image sensor generating data' and other similar 'generating data' limitations."  This claim was definite because "the 'generating data' limitation reflects the capability of that structure rather than the activities of the user, and do not reflect an attempt to claim both an apparatus and a method, but instead claim an apparatus with particular capabilities."

Turning to the case at hand, claim 8 of the '850 patent recites in relevant part:

A system comprising:
    a reporting module installed within the CRM software application . . . wherein the reporting module installed within the CRM software application presents a set of user-selectable database fields as a function of the selected report template, receives from the user a selection of one or more of the user-selectable database fields, and generates a database query as a function of the user selected database fields.

The Court observed that the active verbs therein -- presents, receives, and generates -- are used to describe the capabilities of the system, and therefore the system "possesses the recited structure which is capable of performing the recited functions."  Furthermore, claim 8 is unlike that of In re Katz, because the activities of the user are not actually being claimed.  Instead, the claim focuses on the system's capability to interact with a user.  Additionally, unlike Rembrandt, "the functional language here does not appear in isolation, but rather, is specifically tied to structure: the reporting module installed within the CRM software application."

Thus, claim 8 does not attempt to cover both an system and the use of that system, and infringement occurs when one makes, uses, offers to sell, or sells the claimed system.  Accordingly, the claim was ruled to be definite, and the District Court was reversed on this issue.

The take home from all of this is that when you draft an apparatus claim with functional language, make sure that the verbs of functional language recite actions that are carried out by the apparatus.  For instance, the apparatus might receive input, respond to that input in some fashion, and provide output.  Avoid claiming actions of a user or even those of another device (in fact, best practice in many situations is to avoid reciting a user at all, if possible).

Mastermine Software, Inc. v. Microsoft Corp. (Fed. Cir. 2017)
Panel: Circuit Judges Newman, O'Malley & Stoll
Opinion by Circuit Judge Stoll

In re McAward (PTAB 2017)

By Kevin E. Noonan --

Patent law can be apparently inconsistent, particularly where claim construction is concerned.  For example, claim construction standards that apply in district court are not the same standards that the U.S. Patent and Trademark Office applies during examination; the rationale for the difference is a mixture of a patent having a presumption of validity that claims undergoing examination (or the various flavors of re-examination or review) do not, as well as the gatekeeping function of the Office in granting claims commensurate in scope with an applicant's disclosure.

Another area where there are differences between the Office and district courts is in applying the law of indefiniteness, i.e. determining whether claims satisfy the requirements of 35 U.S.C. § 112, second paragraph (renamed § 112(b) under the Leahy-Smith American Invents Act).  The Supreme Court opined on the standard district courts should apply in Nautilus, Inc. v. Biosig Instruments, Inc., 572 U.S._, 134 S. Ct. 2120 (2014); in this precedential opinion, the Patent Trial and Appeal Board (PTAB) provided the Board's view on how the statute should be applied by the Office and the impact vel non of the Court's Nautilus decision on the Office with regard to the indefiniteness standard.

The claims of the application on appeal, U.S. Serial No. 13/435,655 to McAward et al., were directed to "water leakage detectors . . . which are easily connectable to flexible water hoses, and, can be coupled together to monitor leakage from hot and cold supplies."  All claims were rejected; claim 1 being representative (with italics added):

1.  A water detector comprising:
    a housing;
    flow connectors carried by the housing including a spin­ on female pipe connector at an inflow end and a spin-on male pipe connector on an outflow end;
    at least one water presence sensor carried by the housing;
    an electrically actuatable valve, carried by the housing, and having first and second states; and
    control circuits, carried by the housing, coupled to the sensor and valve, and, responsive to a leakage indicating signal from the sensor, the circuits actuate the valve causing it to change state wherein the control circuits detect flood conditions, shut off a malfunctioning water branch to a home appliance and communicate to a premises alarm communication device or home automation system via a wireless link and wherein the water detector is configured to be reliably installed by an untrained installer or a homeowner and to not require the services of a plumber or electrician to perform installation, thereby permitting widespread and cost effective adoption.

The italicized limitation was recited by the Examiner as being indefinite under 35 U.S.C. § 112, second paragraph.  The Examiner asserted that the metes and bounds of this claim could not be understood by the person of ordinary skill in the art because "the claim language does not provide any structure to the apparatus or system that would allow it to be 'configured' to function as described in the claims."

This rejection was affirmed by the PTAB in a precedential decision in which the Board reaffirmed its application of the indefiniteness requirement in light of the Supreme Court's decision in Nautilus.  In the opinion, the PTAB reiterates the PTO's role in having the initial burden of presenting a prima facie case of indefiniteness to reject claims on this basis, citing Hyatt v. Dudas, 492  F.3d 1365, 1369-70 (Fed. Cir. 2007), and In re Oetiker, 977 F.2d 1443, 1445 (Fed. Cir. 1992).  This exercise requires claim construction (In re Zietz, 893 F.2d 319, 321-22 (Fed. Cir. 1989)) and that raised the issue of the claim construction standard the Office should use.  The Board reiterated that the proper standard is the broadest reasonable interpretation (BRI) construction (In re Am. Acad. of Sci. Tech Ctr., 367 F.3d 1359, 1364 (Fed. Cir. 2004) (cited with approval in Phillips v. A WH Corp., 415 F.3d 1303, 1316 (Fed. Cir. 2005) (en banc)).  Citing In re Packard, 751F.3d1307, 1311-12 (Fed. Cir. 2014) (per curiam), the opinion sets forth the rationale for this standard:

During prosecution, an examiner's indefiniteness rejection begins what is intended to be an interactive process in which the applicant has the opportunity to respond to the examiner by amending the claims or by providing evidence or explanation that shows why the claims are not indefinite.

This reasoning supports the Office's role in ensuring that the claims are "clear, unambiguous, and drafted as precisely as the art allows" so that "the rights afforded by patents [are] commensurate with the invention's contribution to the art," citing. Packard, 751 F.3d at 1313.  Using BRI permits the Office to "fulfill this important role" according to the opinion, citing In re Buszard, 504 F.3d 1364, 1366 (Fed. Cir. 2007).  An applicant has the opportunity to respond to such a rejection by amending claims to satisfy the § 112 requirements, citing In re Yamamoto, 740 F.2d 1569, 1571 (Fed. Cir. 1984) (and quoting In re Prater, 415 F.2d 1393, 1405 (CCPA 1969)).  The Board further asserted that the Office's use of BRI was approved by the Supreme Court in Cuozzo Speed Techs., LLC v. Lee, 136 S. Ct. 2131, 2146 (2016), as being authorized under the Office's rulemaking authority.  In Cuozzo, the Court's approval was grounded on the understanding that such a system protects the public by avoiding "overly broad claims" and "tying up too much knowledge."

And In re Morris, 127 F.3d 1048, 1054 (Fed. Cir. 1997), is consistent with this view:

We note that the patent drafter is in the best position to resolve the ambiguity in the patent claims, and it is highly desirable that patent examiners demand that applicants do so in appropriate circumstances so that the patent can be amended during prosecution rather than attempting to resolve the ambiguity in litigation.

Citing In re Packard, the opinion characterizes this regime as an approach that "fundamentally differs" from a court's role -- one that "effectively results in a lower threshold for ambiguity than a court's":

The different approaches to indefiniteness before the Office and the courts stem not from divergent interpretations of § 112, but from the distinct roles that the Office and the courts play in the patent system.  The lower threshold makes good sense during patent examination because the patent record is in development and not fixed, the Office construes claims broadly during that period, and an applicant may freely amend claims.

Nautilus, which was decided after Packard, is not contrary:  "We do not understand Nautilus, however, to mandate a change in the Office's approach to indefiniteness in patent-examination matters in which, as discussed above, the claims are interpreted under the broadest reasonable interpretation standard and an opportunity to amend the claims is afforded."  The government's position has been consistent, in its amicus in Nautilus and in opposing a writ of certiorari in Packard.

The PTO standard from Packard controls: "[a] claim is indefinite when it contains words or phrases whose meaning is unclear."  751 F.3d at 1310, 1314.  Put differently, "claims are required to be cast in clear-as opposed to ambiguous, vague, indefinite-terms":

[W]hen the USPTO has initially issued a well-grounded rejection that identifies ways in which language in a claim is ambiguous, vague, incoherent, opaque, or otherwise unclear in describing and defining the claimed invention, and thereafter the applicant fails to provide a satisfactory response, the USPTO can properly reject the claim as failing to meet the statutory requirements of § 112(b).  MPEP § 2173.02(1).

In applying these principles, the Board found that the claims are indefinite because "the claim language attempts to further define the water detector's structure by the skill level required to install the water detector" rather than "further defining the water detector's structure," which the opinion terms "unusual."  For this reason, the claim language "fails to provide adequate clarity to the required structure" because the skill level of "an untrained installer or a homeowner" is "ambiguous and vague."  The definitions the Applicant argued on appeal for the meaning of the term were not found in the specification according to the Board's opinion, particular with regard to the knowledge or tools needed for installing the claimed water detector.  As with many such indefiniteness problems, here the wide variability in skill levels among "an untrained installer or a homeowner" robbed the phrase of the clarity required by the statute.  In addition, the Board found that the specification did not provide a basis for determining what the term "configured" meant in the context of the disputed limitation.  These deficiencies extended to both the plumbing and electrical components of the claimed device according to the Board.

The Board also affirmed rejection of all pending claims on obviousness grounds, construing narrowly the terms determined to be indefinite where, even under such a construction the claims were found to be obvious.

Eli Lilly & Co. v. Teva Parenteral Medicines, Inc. (Fed. Cir. 2017)

By Kevin E. Noonan --

From the nadir of the Supreme Court's allegations that the Federal Circuit "fundamentally misunderstood" the law of inducing infringement in Limelight Networks, Inc. v. Akamai Technologies, Inc., the nation's specialized patent appellate court has crafted a two-prong test for assessing when the actions of more than a single actor amount to literal infringement sufficient to support a determination of inducement.  Akamai Technologies, Inc. v. Limelight Networks, Inc. (Fed. Cir. 2015) (en banc).

The case came to the Court from ANDA litigation between Eli Lilly and Teva and other ANDA filers over infringement under 35 U.S.C. § 271(e)(2) of U.S. Patent No. 7,772,209.  The claims were directed to methods for administering pemetrexed disodium (sold by Eli Lilly as Alimta^®) after pretreatment with folic acid and vitamin B12.  Claims 1 and 12 are representative as set forth in the opinion:

1.  A method of administering pemetrexed disodium to a patient in need thereof comprising administering an effective amount of folic acid and an effective amount of a methylmalonic acid lowering agent followed by administering an effective amount of pemetrexed disodium, wherein the methylmalonic acid lowering agent is selected from the group consisting of vitamin B12, hydroxycobalamin, cyano-10-chlorocobalamin, aquocobalamin perchlorate, aquo-10-cobalamin perchlorate, azidocobalamin, cobalamin, cyanoco- balamin, or chlorocobalamin.

12.  An improved method for administering pemetrexed disodium to a patient in need of chemotherapeutic treatment, wherein the improvement comprises:
    a)  administration of between about 350 μg and about 1000 μg of folic acid prior to the first administration of pemetrexed disodium;
    b)  administration of about 500 μg to about 1500 μg of vitamin B12, prior to the first administration of pemetrexed disodium; and
    c) administration of pemetrexed disodium.

(Where the italicized limitations were specifically at issue.)  Here, the patient practices the step of the claim involving administering folic acid (which is available as a pill), and the physician administers B12 and pemetrexed by injection.  The question of whether the existence of two actors (patients and physicians) practicing the claims creates a divided infringement situation that would vitiate literal infringement was clearly contemplated throughout the litigation, during the course of which the Federal Circuit and Supreme Court were considering the question.  That both actors performed their individual steps of the claimed method was not disputed, but its effects on infringement liability, and whether Teva could be liable for inducing infringement was central to the dispute between the parties.

As the litigation progressed, defendants conditionally stipulated to induced infringement subject to being able to litigate the issue if (as it turned out) the Supreme Court reversed the Federal Circuit's contemporaneous standard.  The District Court proceeded on the invalidity issues and held Eli Lilly's claims not to be invalid on obviousness and obviousness-type double patenting grounds nor were indefinite.  After the Supreme Court's Akamai decision, the parties relitigated the infringement issues.  The District Court used the label as evidence of infringement, wherein under FDA regulations Teva's label comprising instruction for administration of the drug would be identical to Eli Lilly's label.  Based on this determination, the District Court found defendants had induced infringement, and this appeal followed.

The Federal Circuit affirmed, in an opinion by Chief Judge Prost joined by Judges Newman and Dyk.  The opinion recognized the Supreme Court's overriding teaching that induced infringement requires a finding that literal infringement had occurred.  Moreover, inducement also requires an intent to induce, which requires that the alleged infringer "knew or should have known" that her actions would induce infringement.  In order for more than one actor to practice the steps of a claimed method and for literal infringement to lie, the Supreme Court-approved standard is that either one of the actors works at the "direction or control" of the other actor, or the actors form a joint enterprise.  With regard to the question of "direction or control," the panel set forth the revised Akamai standard operationalized as a two-prong test.  The first prong of that test is whether one actor "'conditions participation in an activity or receipt of a benefit' upon anothers' performance of one or more steps of a patented method," and the second prong is whether that actor "'establishes the manner or timing of that performance,'" citing the Court's Akamai decision following remand from the Supreme Court (italics in opinion).  The District Court held that the first prong was satisfied because folate administration was a precondition for the physician administering B12 and the drug, and that the second prong was satisfied because the physician prescribed the dose and administration schedule to the patient.

With regard to the District Court's decision on the first prong, the Federal Circuit held that this determination was supported by the evidence of record.  Contrary to Teva's argument that reduction of toxicity was not conditioned by a patient taking folate, the opinion states that what was conditioned was whether the physician administered the drug to the patient (i.e., a physician would only administer the drug if a patient had taken the prescribed amount of folate at the proper schedule):

What is relevant is whether the physician sufficiently directs or controls the acts of the patients in such a manner as to condition participation in an activity or receipt of a benefit—in this case, treatment with pemetrexed in the manner that reduces toxicities—upon the performance of a step of the patented method and establishes the manner and timing of the performance [italics in opinion].

The panel also noted that the District Court's conclusions on this point were supported by the Physician Prescribing Information and Patient Information comprising the FDA-approved label as well as expert testimony (wherein both parties' experts agreed on the importance of folate pre-administration).  Finally on this point, the panel stated that such "conditioning" did not require that a legal obligation be imposed on one of the parties or that the step comprise an "unavoidable technological prerequisite to participation."

With regard to the second prong, the District Court and the panel relied upon the product label.  This information comports with the dosage amounts and frequencies encompassed by the asserted claims.  Expert testimony supported the finding that it was the physician who prescribed folate (in administered amount and frequency) to the patient.

Taken as a whole, the panel found no reversible error in the District Court's factual determinations.

The panel then turned to whether Eli Lilly had established that defendants exhibited the requisite intent to induce infringement, which required evidence of specific intention and acts and not mere knowledge of the patent in suit.  The District Court once more relied on the generic product label (identical to Eli Lilly's label).  The District Court and the Federal Circuit rejected Teva's argument that the label was not sufficient to provide specific evidence of inducement, because it purportedly did not show how physicians (the direct infringer) do act rather than as they may act.  The panel's reaction to that argument was that "[t]he question is not just whether [those] instructions describ[e] the infringing mode, . . . but whether the instructions teach an infringing use such that we are willing to infer from those instructions an affirmative intent to infringe the patent," citing Takeda Pharm. USA, Inc. v. West-Ward Pharm. Corp. and that "it is irrelevant that some users may ignore the warnings in the proposed label," citing AstraZeneca LP v. Apotex, Inc.  Also relevant to the panel's decision was that the label (in both the Physician Prescribing Information and Patient Information) emphasized how important folate administration was for reducing toxicity associated with administration of the drug.  This portion of the opinion concludes "[i]n sum, evidence that the product labeling that Defendants seek would inevitably lead some physicians to infringe establishes the requisite intent for inducement."

With regard to the invalidity issues, the opinion first considered Teva's indefiniteness contentions.  The factual basis for these were that the term "vitamin B12" was indefinite, because there were various species of the vitamin (claimed as vitamin B12, hydroxycobalamin, cyano-10-chlorocobalamin, aquocobalamin perchlorate, aquo-10-cobalamin perchlorate, azidocobalamin, cobalamin, cyanocobalamin, or chlorocobalamin); the District Court found that the term meant cyanocobalamin based on expert testimony.  The panel noted that it does not defer to this expert testimony because satisfaction of the statute is a question of law.  But the opinion does note that the question of how the skilled worker would understand the term is a question of fact reviewable for clear error, and found no such error in the District Court's finding (a definition that was supported even by defendant's expert).  Upon consideration of how the term was used in the claims, and despite some apparent inconsistency in claim language, the Federal Circuit agreed that the skilled worker would have understood the meaning of the term.

With regarding to obviousness, the panel referenced the District Court's "thorough opinion" that the prior art did not motivate the skilled worker to practice the claimed method, and specifically that the skilled artisan would not have been motivated to "(1) use folic acid pretreatment with pemetrexed; (2) use vitamin B12 pretreatment with pemetrexed; or (3) use the claimed doses and schedules of folic acid and vitamin B12 pretreatments with pemetrexed."  The focus of these determinations was that the art did not show any correlation between pemetrexed toxicity and vitamin B12 deficiency (although there was evidence of a correlation with folate deficiency).  Expert testimony from both sides established that there was no recognition in the art that vitamin B12 deficiencies were associated with cancer treatment with antifolate compounds.  Nor was there evidence from the art that B12 would have been routinely administered (or that its administration schedules would have been routine) in cancer treatment.  The panel made similar determinations in affirming the District Court's finding that the claims of the '209 patent were not invalid under the obviousness-type double patenting doctrine.

Eli Lilly benefited in this case by having prevailed at the District Court, in large part due to the burden of finding clear error to overcome the District Court's decision.  But the opinion does set forth an affirmation of the Court's two-prong test for finding that more than one actor can perform the steps in a claimed method sufficient to satisfy the unitary standard for finding literal infringement.

Eli Lilly & Co. v. Teva Parenteral Medicines, Inc. (Fed. Cir. 2017)
Panel:  Chief Judge Prost and Circuit Judges Newman and Dyk
Opinion by Chief Judge Prost

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

Icon Health & Fitness, Inc. v. Polar Electro Oy (Fed. Cir. 2016); Icon Health & Fitness, Inc. v. Garmin Int'l., Inc. (Fed. Cir. 2016)

By Kevin E. Noonan --

In parallel, nonprecedential decisions regarding litigation over the same patent, the Federal Circuit affirmed a District Court decision that the claims were invalid for indefiniteness under 35 U.S.C. § 112(b).  This decision, expressly applying the Supreme Court's revision to how courts apply the indefiniteness test in Nautilus Inc. v. Biosig Instruments, Inc. illustrates how district courts can now address indefiniteness issues and the effects on the standard of review that these efforts can have.

The patent-in-suit, U.S. Patent No. 6,921,351, claims an exercise system that can act as a "virtual coach" via a computer linkup between an individual user and a remote server.  Claims 1 and 5 are representative:

1.  An exercise system comprising:
    a local system including at least one exercise apparatus and at least one associated local server, said at least one local server monitoring the operation of said at least one exercise apparatus, said exercise apparatus and said local server having an in-band communication using a bid-directional [sic] wireless protocol;
    an out-of-band communication with a user of said at least one exercise apparatus, wherein said out-of-band communication has a relationship to said in-band communication;
    a remote server; and
    wherein said local server and said remote serve include communication interfaces which permits communication over a packet network connection that at least part-time couples said local server to said remote server for data communication between said local server and said remote server, such that said remote system may receive local system data from said local server concerning said operation of said exercise apparatus, and such that said local system may receive remote server data from said remote server providing feedback concerning said operation of said exercise apparatus.

5.  An exercise system comprising:
    at least one exercise apparatus having an in-band bi-directional wireless communication device;
    an out-of-band communication device capable communication with a user of said at least one apparatus that has a relationship to said in-band communication;
    at least one associated local server having a bidirectional wireless communication device such that said exercise apparatus and said local server may communicate with each other via a wireless connection; and
    at least one remote server in communication with said local server via, at least in part, an Internet connection, said remote server at least temporarily storing information concerning exercise sessions performed on said exercise apparatus.

(The disputed claim terms are italicized in the claims above.)  The claimed invention was illustrated in two Figures included in the Federal Circuit's decision:

Figure 1

 

The opinion acknowledges that Figure 1 does not illustrate any structure directly corresponding to any of the disputed terms, while Figure 14 sets out at representations, albeit incomplete in the Court's opinion, of the terms "in-band communication" and "out-of-band" communication.  Also missing from the specification was any disclosure relating to the "relationship" between in-band and out-of-band communications as recited in the claims.

Important to the Court's decision was the portion of the proceedings before the District Court, wherein the Court required additional briefing and for each party to submit expert testimony regarding the disputed terms.  Because the indefiniteness issue was presented in the context of construing the claims in a Markman hearing, such expert testimony constituted extrinsic evidence and, hence, Icon as appellant was required to show clear error to prevail on appeal under Teva Pharm. USA, Inc. v. Sandoz, Inc., 135 S. Ct. 831, 842 (2015).  This it could not do.

The Federal Circuit affirmed the District Court's determination that the claims were indefinite, in an opinion by Judge O'Malley joined by Judges Newman and Moore.  Applying the Nautilus indefiniteness standard under the clear error review mandated by Teva, the panel found that Icon had not shown clear error by the District Court in view of the competing opinions provided by each party's expert.  Icon's argument was simple: there existed in-band communication and out-of-band communication that were different, and "the fact that there is a difference is alone sufficient to render the claims definite and capable of construction."  Polar argued that the specification failed to disclose any relationship between in-band and out-of-band communications: "there is no reference provided in the specification to teach a person of ordinary skill what constitutes an in-band communication versus an out-of-band communication (other than the fact, and without such disclosure that they are different) or how the two are related." These are relative terms, according to Polar, and in particular there was no way to distinguish an "in-band" communication from mere communication itself (since "any communication can be considered 'in-band' to itself").  Further:

One of ordinary skill in the art would understand that the words of the claims are supposed to have meaning, and "in-band communication" should be narrower (more limiting) than "communication".  But, unless the meaning can be elucidated from the specification or file history, there would be no way to draw this distinction, and thereby determine the metes and bounds of the claim (and the claims that depend from this claim) with reasonable certainty.

Even worse, according to Polar, is that the term "out-of-band communication" is "completely untethered" to an "in-band communication," which thus could be any communication, even one outside the claimed system itself.  Polar's expert proffered ten prior art patents and textbook references to support his position, which of course constituted additional extrinsic evidence.

The Federal Circuit noted that the District Court expressly relied on the evidence contained in these references in determining that the '351 patent claims were indefinite.  According to the opinion, "[t]his is precisely the type of extrinsic evidence upon which a district court may rely in analyzing the record before it when construing claim terms," and [t]he district court's findings on such evidence constitute findings of fact [that] we review [] for clear error," citing Teva.  Finding no clear error, nor any error in the District Court's legal conclusion of indefiniteness, the Federal Circuit affirmed.

The panel rejected both Icon's arguments that the District Court improperly considered extrinsic evidence and Polar's argument that Icon had waived this argument by not raising it before appeal.  Insofar as Icon's arguments were "intended only to reinforce Icon's assertion that "'in- band' and 'out-of-band' are separate and distinct instances of communication" they are "redundant and unnecessary," because "Polar does not contest, and the district court did not question, that 'in-band' and 'out-of-band' [communications] are 'separate and distinct.'"  The question was whether the "ambiguous nature of the distinction between the two claim terms renders them incapable of construction," which was the District Court's conclusion with which the Federal Circuit agreed.

And illustrating the catholic nature of the indefiniteness requirement, the panel supported its conclusion by citing its decision in Amgen Inc. v. Hoechst Marion Roussel, Inc., 314 F.3d 1313 (Fed. Cir. 2003), a biotech case.  There, the ambiguous claim term was erythropoietin "having glycosylation which differs from that of human urinary erythropoietin [uEPO]."  In that case (decided under the "insolubly ambiguous" test negated by Nautilus), the fact that two preparations of urinary EPO produced from the same source could yield EPO having difference glycosylation patterns made the claims indefinite.  Under such circumstances "the claim itself was a moving target" because "one must know what the glycosylation of uEPO is with certainty before one can determine whether the claimed glycoprotein has a glycosylation different from that of uEPO" (emphasis in this opinion).  The panel found the same deficiency here, because "Icon argues that the scope of the claim term 'in-band' would be selected by a person of ordinary skill, but that the scope could vary from day-to-day and from person-to-person."  This is the same type of "moving target" in this technology as was the uEPO glycosylation pattern in the Amgen case, and was just as indefinite according to the Court.

Icon Health & Fitness, Inc. v. Polar Electro Oy (Fed. Cir. 2016)
Icon Health & Fitness, Inc. v. Garmin Int'l., Inc. (Fed. Cir. 2016)
Nonprecedential disposition
Panel: Circuit Judges Newman, Moore, and O'Malley
Opinion by Circuit Judge O'Malley