Patent Docs

PocketPair Provides Post on Permutations to Palworld based on Pokémon Patents

By Andrew Velzen --

I have previously written extensively on the ongoing legal battle between Nintendo / The Pokémon Company (referred to herein collectively as simply "Nintendo") and PocketPair over PocketPair's popular video game Palworld.[1]  This past week, PocketPair published a blog post addressing some of the recent and upcoming in-game changes.[2]  The PocketPair blog post is worth analyzing vis-a-vis Nintendo's recently filed U.S. patent applications.

Before jumping into the meat of PocketPair's blog post, though, let's check in with the status of Nintendo's developing U.S. patent portfolio related to this case.  As I discussed in one of my previous posts, Nintendo has filed three patent applications that, on their face, are seemingly meant to target Palworld.[3]  To remain consistent with the nomenclature I have used previously, I will continue to refer to these three U.S. patent applications as:  U.S. App. No. 18/652,874 ("US-App-3"), U.S. App. No. 18/652,883 ("US-App-4"), and U.S. Pat. App. No. 18/776,729 ("US-App-5").  As I previously noted, two of these applications (US-App-3 and US-App-5) have both issued as U.S. patents (US-App-3 issued in December 2024 and US-App-5 issued in February 2025).

There has also been additional activity in US-App-4 since my last post.  On December 4, 2024, a final Office Action issued in US-App-4 in which the Examiner rejected the pending claims as obvious under 35 U.S.C. § 103, but indicated one of the dependent claims (claim 22) as allowable.  On March 4, 2025, Nintendo filed a response with the U.S. Patent and Trademark Office (USPTO).  In the response, rather than accepting the allowable subject matter of claim 22, Nintendo responded by:  (i) submitting a further amendment that slightly narrowed the independent claims and (ii) arguing that the prior art did not render the claims obvious.  The patent examiner at the USPTO was persuaded by this response and issued a Notice of Allowance for US-App-4 on April 4, 2025.  Nintendo now has until July 7, 2025 to pay the issue fee, which would result in an issued U.S. Patent.[4]  To summarize, Nintendo now has two patents and will likely soon have a third, as well.

Turning to PocketPair's blog post, PocketPair communicated three important things:  (1) that PocketPair "continue[s] to dispute these [patent infringement] claims and assert the invalidity of the patents in question"; (2) that PocketPair's v0.3.11 patch to Palworld (which "removed the ability to summon Pals by throwing Pal Spheres and instead changed it to a static summon next to the player" and implemented several changes to "other game mechanics") was "indeed a result of the ongoing litigation"; and (3) that PocketPair's upcoming v0.5.5 patch to Palworld (which will change "gliding" such that it is "performed using a glider rather than with Pals") represents "yet another compromise" in order to "prevent further disruptions to the development of Palworld."

While the only currently pending litigation is in Japan (i.e., there is no counterpart patent infringement litigation currently pending in the U.S.), the U.S. patent applications described above are sister applications to the presently asserted Japanese patents and cover similar game mechanics.  Further, to my knowledge, the version of Palworld presently playable in Japan is identical to the version of Palworld playable in the U.S.  Hence, any changes made to Palworld to avoid Japanese patent infringement may also assist with (e.g., be done with the purpose of) avoiding U.S. patent infringement.

On their face, the changes described in item (2) and (3) above from PocketPair's blog post do seem to relate directly to the claims issued (or allowed) in US-App-3, US-App-4, and US-App-5.  For example, the claims of the issued patents corresponding to US-App-3 and US-App-5, respectively, cover (i) "catching a field character" with a "catching item" and then later the "field character" fighting a "fighting character" and (ii) "catching a first virtual character" with a "virtual object" and then later launching the "virtual object" and displaying the "first virtual character" fighting a "second virtual character."[5]  Thus, the changes to Palworld in patch v0.3.11 could certainly assist in avoiding infringement of US-App-3 and US-App-5.  Likewise, the changes to Palworld in patch v0.5.5 could assist in avoiding infringement of US-App-4 (assuming US-App-4 ultimately issue as a patent), since the claims of US-App-4 relate to "causing [a] player character to board an air boarding object."[6]

It is important to note, however, that PocketPair's modification of game mechanics is not an admission of infringement of the U.S. patents.  This is especially true when coupled with PocketPair's statement from the blog post that PocketPair "continue[s] to dispute" the patent infringement claims.  Further, while modification of game mechanics is not an admission of infringement, neither does it insulate PocketPair from liability for any previously committed acts of patent infringement.  Instead, PocketPair may simply be taking steps to mitigate risk moving forward.

For example, should it ultimately be determined that PocketPair committed patent infringement in the U.S., multiple remedies could be applied.[7]

A first type of remedy could include assessing damages against PocketPair in the form of a reasonable royalty.  A reasonable royalty depends on both a "royalty rate" (e.g., the monetary value per unit of infringing product sold that is attributable to the infringing feature) and a "royalty base" (e.g., the number of units of infringing product sold).  The shorter the amount of time that an infringing product is for sale, the less the so-called "royalty base."  For example, any copies of Palworld sold after any infringing feature has been removed from the game could not be included in the "royalty base" (since those copies were not infringing).  Hence, PocketPair could be amending the features to protect against a higher monetary judgment should it ultimately lose a patent infringement case.

A second type of remedy could include an injunction.  PocketPair may be enjoined (i.e., judicially forbidden) from selling products in the future that include infringing features.  Thus, to prevent future software development / game design time being committed to removing infringing features, PocketPair may simply be proactively removing allegedly infringing features now.  Likewise, removal of such features upfront may both:  (i) preemptively adjust player expectations regarding those features and related features being included in-game; and (ii) prevent additional game features that rely on the underlying infringing features from being developed in the interim (i.e., between now and any infringement judgment).

Appropriately thirdly, PocketPair may avoid treble damages in the U.S. by removing the features in question now (i.e., upon becoming aware of the U.S. patents in question).  According to 35 U.S.C. § 284, when there is a finding of patent infringement, "the court may increase the damages up to three times the amount found or assessed."  Treble damages are traditionally rendered as a result of the defendant's willful infringement (e.g., the defendant performing one or more actions that the defendant knows would be covered by a claim of a valid patent of which the defendant was aware).  Due to the presently ongoing legal battles (both in Japan and in the U.S.), PocketPair has almost assuredly been made aware of the two issued U.S. Patents (and allowed US-App-4).  For example, PocketPair may have received one or more threatening letters from Nintendo indicating that Nintendo believes PocketPair to be infringing Nintendo's U.S. patents (e.g., along with copies of the U.S. Patents in question).  This puts PocketPair on notice and, if PocketPair continues to infringe Nintendo's patents thereafter (without any other protections in place, such as a non-infringement opinion), should Nintendo ultimately prevail in a U.S. lawsuit, PocketPair could be on the hook for three times the amount for any infringing acts committed after being put on notice.

As a result, it is very plausible that PocketPair maintains its innocence in terms of patent infringement liability, but for at least the three remedy-related reasons above, has decided to remove the features in question anyway.  This is speculation, but in addition to mitigating risk for the reasons above, PocketPair may also be changing in-game elements based directly on ongoing negotiations with Nintendo.  It is likely that settlement negotiations have at least been floated between the two parties (if not actively ongoing).  Further, part of those settlement negotiations would likely include PocketPair's agreement to remove certain game features from Palworld.  Thus, by removing the features from the game currently (and by issuing a public blog post about it), PocketPair may be negotiating in good faith with Nintendo.

What happens from here on out will likely be based on PocketPair's appetite for a legal battle.  Nintendo is arguably in a relatively strong negotiating position at the moment, as it has already filed suit in Japan and has obtained two (likely soon-to-be three) related patents in the U.S.  Additionally, PocketPair has had immense success over the last year with Palworld.  It may be more of a risk than PocketPair is comfortable with to stake some of that success in a multinational litigation against Nintendo.  In other words, depending on the terms of a negotiated agreement, it may be safer for PocketPair to simply capitulate to Nintendo's requests (e.g., remove certain features from Palworld and pay Nintendo some amount of money), rather than fight the charges of infringement.[8]

Should PocketPair desire to take this fight further, though, there are certainly avenues in the U.S. that could be pursued.  For example, PocketPair could haul Nintendo's U.S. patents back into the USPTO in an Inter Partes Review (IPR) proceeding or a Post Grant Review (PGR) proceeding in an attempt to invalidate the patents, as described in my previous pieces.

Since its outset, this has been an interesting case to follow, with aspects touching on many different areas of intellectual property law.  Given the size of the parties involved (and the relative success of their respective games), I think the entire gaming industry is watching to see how it plays out.  Regardless of the outcome, this legal battle clearly highlights that patents remain an effective tool in the gaming space, even if their use has fallen out of vogue somewhat post-Alice.[9]

[1] See https://www.patentdocs.org/2024/04/palworld-friend-or-foe.html; https://www.gamesindustry.biz/nintendos-patents-were-designed-to-take-on-palworld; https://www.mbhb.com/intelligence/snippets/what-the-pokemon-companys-patent-applications-are-evolving/.

[2] https://www.pocketpair.jp/news/20250508.

[3] https://www.gamesindustry.biz/nintendos-patents-were-designed-to-take-on-palworld; https://www.mbhb.com/intelligence/snippets/what-the-pokemon-companys-patent-applications-are-evolving/.

[4] It is somewhat of an interesting side note that Nintendo has yet to pay the issue fee in US-App-4 (as of May 10, 2025).  Whereas in both US-App-3 and US-App-5, Nintendo paid the issue fee a week or two after getting a Notice of Allowance, in US-App-4, it has been over a month since the Notice of Allowance was issued and Nintendo has yet to pay the fee.

[5] U.S. Pat. Nos. 11,179,111 and 12,220,638.

[6] U.S. Pat. App. Pub. No. 2024/0286040.

[7] See, e.g., 35 U.S.C. § 284.

[8] Worth noting, should PocketPair and Nintendo come to terms on a settlement regarding the Japanese patent infringement suit, such a settlement agreement would most likely be written to avoid any patent litigation in the U.S., as well.  Said differently, if PocketPair agrees to a settlement with Nintendo, PocketPair would presumably be globally insulated against future litigation over related patents.

[9] Alice Corp. v. CLS Bank Int'l, 573 U.S. 208 (2014).

DNA Genotek Inc. v. Spectrum Solutions LLC (Fed. Cir. 2025)

By Kevin E. Noonan --

Sometimes important contributions to innovation can come from the mundane rather than the extraordinary.  One (perhaps apocryphal) example comes from the story of the early development of television by Philo Farnsworth (the story, but not the apocrypha, is set forth in Evan Schwartz's book The Last Lone Inventor).  In this aspect of the tale, Farnsworth's brother-in-law, wanting to help but knowing nothing about electronics, learned to blow glass television tubes which he realized were necessary components of Farnsworth's invention.  This story comes to mind in a recent nonprecedential Federal Circuit decision regarding methods for isolating DNA from biological samples (such as sputum), found not to be infringed in DNA Genotek Inc. v. Spectrum Solutions LLC.

The case arose over U.S. Patent No. 10,619,187 that claimed a device for "preserving nucleic acids at room temperature for extended periods of time and for simplifying the isolation of nucleic acids" according to the opinion.  Claim 1 is set forth in the opinion as being representative:

A device for receiving and preserving nucleic acid in a biological sample, said device comprising:
    one or more walls defining a containment vessel having a top having an opening, and a closed bottom having a sample receiving area for holding said biological sample, said opening for receiving a liquid sample and for sealably receiving a sealing cap, said top having an opening for receiving a biological sample from the mouth of a user and further comprising at least one marking on said one or more walls which corresponds to a fluid volume in the sample receiving area;
    a reagent compartment having a barrier, said barrier sealing and containing reagents in said reagent compartment and capable of disestablishment to release said reagents into the sample receiving area;
    reagents in the reagent compartment for preserving nucleic acids potentially present in the sample wherein said reagents comprise a denaturing agent, a chelator and a buffer agent; and,
    the sealing cap, whereby the device is configured such that, when sealably closing said opening with said sealing cap, the barrier mechanically disestablishes to release said reagents to form a mixture of reagents and said biological sample wherein said buffering agent maintains a pH of said mixture equal to or above 5.0 to preserve nucleic acids potentially present in the sample.

As explained in the opinion, the device contains a first region for collecting a biological sample and a second region containing reagents for preserving the nucleic acid in the sample, with a barrier between the two regions; the device further comprises means for "disturbing the integrity" of the barrier so that the reagents in the second region and the biological sample is mixed.  Said second region also contains reagents for disrupting cells in the sample, "liberating" nucleic acids, solubilizing the lipid components, stripping [proteins] from DNA and digesting proteins therein," wherein the liberated nucleic acid is stably preserved at room temperature for later analysis.  Benefits of the claimed devices and methods for using them include eliminating the need for refrigeration between biological source and clinical or analytical laboratories.

Genotek sued Spectrum for infringement by the latter company's SDNA home saliva-collection kit for providing COVID-19 PCR testing.  The District Court granted Spectrum summary judgment of non-infringement based, according to the opinion, on construction of the term "reagent compartment."  This appeal followed.

The Federal Circuit affirmed, in an opinion by Judge Rodney Gillstrap,* sitting by designation, joined by Judges Lourie and Hughes.  The opinion focused on the District Court's construction of the term "reagent compartment" to mean "a region or section of the containment vessel" and that the '187 patent specification provided "clear guidance" regarding the location of that compartment in the device.  Specifically, the District Court construed the location of the reagent compartment to be within the containment vessel of the device.  This construction was supported by the prosecution history and the record of an inter partes review (IPR) proceeding in which the '187 patent was involved, according to the opinion.  In particular, the District Court held and the Federal Circuit affirmed that Genotek had intentionally deleted "any explicit disclosure of the reagent compartment being in the cap/lid," which evinced "a clear intent to limit the final scope of the invention to a device with the reagent compartment in the containment vessel."

Genotek argued on appeal that the District Court erred in its construction by importing limitations from the specification into the claims and that the plain language of the claims contained no limits on the location of the reagent compartment.  The Federal Circuit disagreed, citing several portions of the specification that consistently supported the District Court's construction and that these portions described the invention "as a whole" and not merely preferred embodiments, citing Regents of Univ. of Minnesota v. AGA Med. Corp., 717 F.3d 929, 936 (Fed. Cir. 2013), for the principle that "[w]hen a patent thus describes the features of the 'present invention' as a whole, this description limits the scope of the invention."

Equally unavailing was Genotek's argument that a provisional application from which the '187 patent claimed priority (and which was incorporated by reference) disclosed an embodiment where the reagent compartment was in the cap.  The panel found support in the prosecution history for the District Court's construction excluding the cap location for the reagent compartment.  According to the opinion, "[w]hen Genotek filed its non-provisional application, it intentionally deleted all references to that embodiment and included only embodiments with the reagent compartment in the container."  Such deletions have been held to "contribute[ to] understanding . . . the intended scope of the final application," citing MPHJ Tech. Invs., LLC v. Ricoh Ams. Corp., 847 F.3d 1363, 1369 (Fed. Cir. 2017), and thus the Federal Circuit agreed with the District Court that the properly construed claims of the '187 patent did not include embodiments where the reagent compartment was in the cap or lid.

Finally, Genotek objected to the District Court relying on distinctions between the device claimed in the '187 patent and prior art patents having a reagent compartment in the lid on the grounds that those statements were made with regard to preferred embodiments of the invention claimed in the '187 patent and not the invention as described a whole.  The panel noted that these statements were not dispositive but also understood the District Court's consideration of them as permissively "informing the district court's construction" of the claims to the device.

On these bases, the Federal Circuit affirmed the District Court's grant of summary judgment for Spectrum that their SDNA devices did not infringe the asserted claims of the '187 patent.

*Chief Judge of the U.S. District Court for the Eastern District of Texas.

DNA Genotek Inc. v. Spectrum Solutions LLC (Fed. Cir. 2025)
Nonprecedential disposition
Panel: Circuit Judges Lourie and Hughes, and Chief District Judge Gilstrap
Opinion by Chief District Judge Gilstrap

Wisconsin Alumni Research Foundation v. Apple Inc. (Fed. Cir. 2024)

By Kevin E. Noonan --

In a joint appeal of two adverse decisions from the District Court, the Federal Circuit on procedural grounds rejected an appeal from the Wisconsin Alumni Research Foundation ("WARF") in Wisconsin Alumni Research Foundation v. Apple Inc.  The decision was based on the Court's conclusion that WARF was precluded from asserting infringement under the doctrine of equivalents (DOE) after having failed to establish literal infringement and having withdrawn its DOE assertions in an earlier litigation, and also precluded from asserting the same patent on DOE grounds against "next-generation" Apple products similar to ones deemed non-infringing earlier.

The case arose over U.S. Patent No. 5,781,752 directed to "[a] predictor circuit [that] permits advanced execution of instructions . . . [i]n an electronic computer with a single processing unit" (alleged to be infringed by Apple's A7 and A8 processors in one of the decisions at issue and Apple's A9 and A10 processors in the other).  The first decision (WARF I) on appeal (regarding earlier litigation about the A7 and A8 processors in which the District Court found infringement by Apple and the Federal Circuit reversed) is the District's Court's refusal to permit WARF to litigate infringement under DOE that had been withdrawn in the earlier litigation, on the grounds that WARF had affirmatively abandoned that theory of infringement (as explained in the opinion, this abandonment was made in a context where Apple was precluded from introducing evidence at trial of its own patent, No. 9,128,725, regarding similar technology) and that the District Court's construction of the term "particular" ("to be associated with a single load instruction") "foreclosed an equivalent where the prediction could be associated with a group of load instructions" (emphases in opinion) because WARF's DOE theory would "vitiate the claim limitation by rendering meaningless the term "particular."  The District Court (in WARF II) after lifting a stay until resolution of WARF I refused to permit WARF from pursuing infringement of Apple A9 and A10 processors under DOE based on its decision in WARF I, supported by Federal Circuit precedent under Nystrom v. Trex Co., 580 F.3d 1281 (Fed. Cir. 2009), that ruled that "the plaintiff in that case was barred from revisiting a doctrine of equivalents theory of infringement based on waiver of that doctrine in past litigation over materially similar, earlier generation of the same products despite later generations being produced during and after the course of the first litigation."  These appeals followed.

The Federal Circuit affirmed, in an opinion by Judge Prost joined by Judges Taranto and Chen.  As explained in the opinion, WARF argued in its appeal from WARF I that it did not waive its claim of infringement under DOE "generally" with respect to Apple's A7 and A8 processors, and that issue preclusion does not apply in WARF II.  Apple argued that the Kessler doctrine supported the District Court's decision in this regard, see Kessler v. Eldred, 206 U.S. 285 (1907) (the panel agreeing with this argument in its affirmance).

With regard to WARF I and the District Court's waiver determination, the Federal Circuit asserted the preeminence of Federal Circuit law for waiver questions regarding "enforcement of a patent right," citing Harris Corp. v. Ericsson Inc., 417 F.3d 1241, 1250‒51 (Fed. Cir. 2005).  WARF's ultimate position on this question was that the District Court's claim construction of the term "particular" was a change of circumstances that precluded application of waiver in its DOE infringement theory under Exxon Chemical Patents, Inc. v. Lubrizol Corp., 137 F.3d 1475 (Fed. Cir. 1998).  Apple for its part argued that WARF made its own "strategic choice to abandon its [doctrine-of-equivalents] theory in order to prevent Apple from introducing evidence of Apple's own patent during the trial's liability phase," relying in large part upon the Federal Circuit's earlier decision reversing the District Court's finding of literal infringement and the absence in that decision of remand or a new claim construction.

The Federal Circuit agreed with Apple.  Regarding WARF's "changed circumstances" concerning claim construction of the term "particular," the opinion asserts that "[t]he correct inquiry is whether the claim construction changed in a way that would excuse WARF's failure to raise, at the previous trial, the doctrine-of-equivalents theory that it now attempts to reassert in WARF I," concluding that it did not.  The Court held that the interpretation of the term was consistent with Apple's understanding that it should be given its plain and ordinary meaning (supported by its expert's testimony).  In addition, the opinion states that WARF was not prohibited from raising its DOE grounds for infringement at trial despite its assertion of its confidence regarding its literal infringement case.  Nor was the panel convinced that Apple's failure to pursue the narrower construction of the term at trial provided any justification for WARF not earlier pursuing its DOE case.

The Court also held that, "for reasons unrelated to claim construction," WARF had waived its DOE infringement theory.  The basis for this conclusion is that WARF's actions had satisfied the standard under United States v. Olano, 507 U.S. 725, 733 (1993), for "intentional relinquishment or abandonment of a known right" by failing to present substantive arguments before the District Court for infringement under the DOE, citing Boss Control, Inc. v. Bombardier Inc., 410 F.3d 1372, 1380 (Fed. Cir. 2005), and United States v. Hible, 700 F.3d 958, 961 (7th Cir. 2012).  The panel characterized WARF's arguments against waiver as "recharacter[izations]" which the Court found to be contrary to the record.  In the panel's view, WARF "agreed to 'drop doctrine of equivalen[ts] and make no doctrine of equivalents arguments whatsoever at trial'," emphasis in opinion, "in exchange for Apple's agreement not to present its own patent at trial."  This constituted a "relinquishment of a known right" which resulted in the District Court ordering both parties not to present evidence about that Apple patent at trial.  In addition, the Court considered it relevant that both parties retained the "ability to argue their positions on what the plain and ordinary meaning required or allowed."  Under these circumstances, the panel held that while WARF could have pursued its DOE theory at trial that it now asserts, not doing so constituted an abandonment constituting waiver.

Finally, in the WARF I appeal the panel turned to (and rejected) WARF's assertion of Exxon Chemical Patents, Inc. v. Lubrizol Corp.,137 F.3d 1475 (Fed. Cir. 1998), in support of its position.  The Court found WARF's assertion of this precedent, for the proposition that "when the doctrine of equivalents becomes a critical issue only after a new claim construction is adopted on appeal, a plaintiff's prior choice to not present that theory at trial does not constitute abandonment" was overbroad.  In the Court's view, that case involved circumstances where the Federal Circuit held on appeal that the District Court had discretion to consider an unasserted DOE infringement theory because the Federal Circuit had not "dispose[d] of" that infringement theory.  Although "[a]t a bird's eye view" the facts and circumstances in Exxon were similar to those here, the panel found sufficient distinctions to reject WARF's assertion of Exxon in this instance.  In Exxon, the District Court's claim construction "rendered [Plaintiff's] doctrine-of-equivalents theory moot," which was not the case here, and in Exxon "there was no reason for the jury to consider Exxon's doctrine-of-equivalents theory under the uncontested facts."  In this case, "in contrast, there were reasons for WARF to pursue its doctrine-of-equivalents theory—namely, the parties were actively disputing the scope of the plain and ordinary meaning of 'particular' before, during, and after trial," i.e., the question on the meaning of "particular" was not moot.  In addition, here (and not in Exxon) the Court found an affirmative abandonment of its DOE theory of infringement.  Finally, in Exxon, the Federal Circuit "did not grant a per se right to a new trial on the doctrine of equivalents" but provided the District Court with the discretion to do so.

Regarding the WARF II appeal, the Court affirmed based on issue preclusion and the Kessler doctrine.  For the former, the standard applied by the Court is that "(1) the issue sought to be precluded is the same as that involved in a prior action; (2) the issue was actually litigated; (3) the determination of the issue was essential to the final judgment; and (4) the party against whom estoppel is invoked was represented in the prior action," citing Adair v. Sherman, 230 F.3d 890, 893 (7th Cir. 2000); the elements at issue here are limited to the first and second, implicating the question (according to the opinion) of "what is the issue"?  WARF contends the issue in WARF I to be "whether Apple's A7 and A8 processors literally infringe the '752 patent" and in WARF II to be "whether Apple's A9 and A10 processors infringe the '752 patent under the [doctrine of equivalents]."  Apple's contention is the same in both cases to be merely "whether Apple's accused products infringe the '752 patent."  The task the Court appreciates is to determine whether the two pairs of processors -- A7/A8 and A9/A10 -- are "essentially the same" and whether literal and DOE infringement "are part of the same overall issue of infringement."

The opinion notes that "[a]ccused devices are essentially the same where the differences between them are merely colorable or unrelated to the limitations in the claim of the patent," citing ArcelorMittal Atlantique et Lorraine v. AK Steel Corp., 908 F.3d 1267, 1274 (Fed. Cir. 2018).  Here, the District Court held that the pairs of accused infringing processors satisfied this standard, and the Federal Circuit found no clear error in this determination.  The panel dismissed WARF's contentions that there was an issue based on failure of Apple to provide discovery regarding the A9/A10 processors and that there was a "'potential' significant [design] change" in the later-developed A9/A10 processors compared with the A7/A8 processors.  This decision was based on the Court's consideration of further proceedings below wherein both parties made assertions that the two pairs of processors were the same ("not more than colorably different" in Apple's language).  And the only additional discovery WARF wanted was "damaged-related discovery" according to the panel, not technical discovery relevant to the question of substantial sameness at issue here.

The Court next considered the second prong of the test for issue preclusion, "whether the issue is infringement or the separate theories of infringement" and whether the issue litigated in the first action is identical to the one WARF wishes to pursue in the second action under B & B Hardware, Inc. v. Hargis Industries, Inc., 575 U.S. 138, 154 (2015).  Importantly, the panel interpreted the B&B Hardware holding to be that the legal standards applied in both actions were the same, not that the "factors or tests must be identical for issues to be identical."  The Court purports to apply the same analytical approach taken by the B&B Hardware Court, looking at "the statutes, the history, and the Restatement (Second) of Judgments" (i.e., the common law) to make its determination of issue identity.  Here, the statute is the same (35 U.S.C. § 271), as was the historical context for the DOE (Winans v. Denmead, 56 U.S. 330, 344 (1853); see also Graver Tank & Mfg. Co. v. Linde Air Prods. Co., 339 U.S. 605, 608 (1950), which treated literal and DOE infringement "as a single issue").  Finally, the panel's assessment of the teachings of the Restatement (Second) of Judgments sets forth "several factors" for situations where "there is a lack of total identity between the particular matter presented in the second action and that presented in the first."  These include "substantial overlap in evidence or argument"; whether "new evidence or argument involve application of the same rule of law as that involved in the prior proceeding"; "[c]ould pretrial preparation and discovery relating to the matter presented in the first action reasonably be expected to have embraced the matter sought to be presented in the second?"; and "[h]ow closely related are the claims involved in the two proceedings?"  These rubrics as applied by the Court supported the District Court's determination that issue preclusion should apply to WARF's renewed assertion of infringement under the DOE.  This treatment is also consistent with precedent, according to the opinion, citing Nystrom v. Trex Co., 580 F.3d 1281 (Fed. Cir. 2009) (relied upon by the District Court), and Aspex Eyewear, Inc. v. Marchon Eyewear, Inc., 672 F.3d 1335, 1343 (Fed. Cir. 2012).  The opinion also asserts a policy basis for their decision:

For the foregoing reasons, we are convinced that literal infringement and the doctrine of equivalents are the same issue for issue-preclusion purposes.  To conclude otherwise would allow a patentee to proceed through the entirety of litigation only on a theory of literal infringement and, after losing its case, allow that same party to accuse the same entity of infringing the same patent, accusing the same or essentially the same products, as long as those products were sold after judgment of the first suit.

Finally, the opinion turns to the proper application of the Kessler doctrine in support of the District Court's decision.  The doctrine is specific for patent law, according to the Court, wherein it "fills the gap between [claim and issue] preclusion doctrines . . . allowing an adjudged non-infringer to avoid repeated harassment for continuing its business as usual post-final judgment," citing Brain Life, LLC v. Elekta Inc., 746 F.3d 1045, 1056 (Fed. Cir. 2014).  As applied the right (to sell a non-infringing article after having been absolved of infringement of the claimed invention) "attaches to its product—to a particular thing—as an article of lawful commerce," the panel citing Rubber Tire Wheel Co. v. Goodyear Tire & Rubber Co., 232 U.S. 413, 418 (1914).  Closer to the circumstances in this case (and cited by the Court in support of the District Court's judgment) is SpeedTrack Inc. v. Off. Depot, Inc., 791 F.3d 1317, 1329 (Fed. Cir. 2015), where a plaintiff only asserting literal infringement was precluded under the Kessler doctrine from asserting DOE infringement in a second lawsuit arising after having failed to prevail against the same defendant for accused literal infringement.  As stated in the opinion, "WARF II presents exactly this type of litigation harassment, applied to a second suit against the very same defendant."

These proceedings appear to exonerate Apple from infringement that an earlier jury had decided was worth $506 million (after prejudgment interest).

Wisconsin Alumni Research Foundation v. Apple Inc. (Fed. Cir. 2024)
Panel: Circuit Judges Prost, Taranto, and Chen
Opinion by Circuit Judge Prost

Natera, Inc. v. NeoGenomics Laboratories, Inc. (Fed. Cir. 2024)

By Kevin E. Noonan --

In Natera Inc. v. NeoGenomics Laboratories, Inc. the Federal Circuit affirmed the District Court's grant of a preliminary injunction against NeoGenomics in patent infringement litigation involving Natera's U.S. Patent Nos. 11,519,035 and 11,530,454 directed to methods for amplifying targeted genetic material and methods for detecting variations in genetic material indicative for diseases and disorders, respectively.

Claim 1 of the '035 is representative and recites:

1.  A method for amplifying and sequencing DNA, comprising:
    tagging isolated cell free DNA with one or more universal tail adaptors to generate tagged products, wherein the isolated cell-free DNA is isolated from a blood sample collected from a subject who is not a pregnant women;
    amplifying the tagged products one or more times to generate final amplification products, wherein one of the amplification steps comprises targeted amplification of a plurality of single nucleotide polymorphism (SNP) loci in a single reaction volume, wherein one of the amplifying steps introduces a barcode and one or more sequencing tags; and
    sequencing the plurality of SNP loci on the cell free DNA by conducting massively parallel sequencing on the final amplification products, wherein the plurality of SNP loci comprises 25-2,000 loci associated with cancer.

The opinion explains that cell-free DNA (cfDNA) fragments are found in human blood and that a subset of these fragments are derived from tumor cells (termed ctDNA); detection of these latter species can provide a way to detect relapse in cancer patients as "molecular residual disease."  These fragments were detected using Natera's Signatera product, and in its infringement suit Natera accused NeoGenomics of infringing by selling its competing RaDaR product.  Both products "identify ctDNA within the bloodstream to assess the efficacy of cancer treatment and the risk of cancer recurrence" (i.e., "they are designed from a patient's genetic information based on a tissue biopsy of the patient's tumor").

The District Court granted Natera's motion for preliminary injunction because it held that Natera satisfied the four-prong test, specifically 1) there being a likelihood of success on the merits (infringement of at least one asserted claim of the '035 patent); 2) irreparable harm to Natera caused by NeoGenomics' infringement; 3) that the injunction would be in the public's interest; and 4) that the balance of the hardships were in Natera's favor.  The details of the injunction not only prohibited NeoGenomics from making, using, selling or offering to sell its competing RaDaR product, but also from "promoting, advertising, marketing, servicing, distributing, or supplying the RaDaR assay to allegedly induce infringement"; the injunction exempted patients already using RaDaR as well as "finalized or in-process research projects, studies, and clinical trials."  The District Court granted NeoGenomics' motions to permit three not-yet-initiated clinical testing contracts to proceed (despite testing of samples not having yet begun but for which third parties had designed the experiments and testing protocols using RaDaR), based on the public interest in this research and the negative effect that the injunction could have on these third parties.  The Court also permitted NeoGenomics to test patient samples it had received but not yet tested at the time of the injunction.  Finally, the District Court permitted NeoGenomics to use its RaDaR product in three "negotiation-stage" research contracts (but that had finalized protocols and approvals) because enforcing the injunction under these circumstances would cause "delay and hardship."  On the other hand, the Court did not permit another potential contract to go forward because the evidence for this contract was "only a conclusory statement that the sponsoring organization had done significant work designing the study." NeoGenomics appealed.

The Federal Circuit affirmed in an opinion by Chief Judge Moore, joined by Judges Taranto and Chen, expressly assessing three of the four prongs of the test in turn (the opinion does not address the "balance of the hardships" prong).  With regard to the likelihood of success on the merits for infringement of at least one asserted claim of the '035 patent, the opinion sets out the evidence for the likelihood that Natera would prevail on the question of infringement, and separately the likelihood that NeoGenomics would be unable to establish invalidity.  On the infringement question, NeoGenomics argued that the District Court erred by not engaging in explicit claim construction, but the Federal Circuit rejected this argument, noting that "[a] district court has no obligation to definitively construe claims at the preliminary injunction stage," citing Sofamor Danek Grp., Inc. v. DePuy-Motech, Inc., 74 F.3d 1216, 1221 (Fed. Cir. 1996) (while certainly a decision directed to the preliminary injunction standard Sofamor it is also curiously one handed down by the Court a few months before the Supreme Court rendered its decision in Markman v. Westview, which decision altered the claim construction landscape considerably).  Here, the parties did not present a claim construction dispute to the District Court and for its part NeoGenomics did not raise the issue despite having several opportunities to do so ("in its opposition brief before the district court, at the technology tutorial, or at the preliminary injunction hearing," only finally doing so in its motion to stay the injunction).  The Federal Circuit did not disagree with the District Court's construction nor that NeoGenomics' RaDaR product infringed the expressly recited steps of claim 1 of the '035 patent.  The Court also distinguished the facts in Amgen Inc. v. Sandoz Inc., 923 F.3d 1023 (Fed. Cir. 2019), asserted by NeoGenomics as being analogous and, as in that case, non-infringing, the Court finding no clear error in the district court's determination thereof.

On the invalidity question, the opinion rejected NeoGenomics' argument that the District Court applied an incorrect legal standard regarding their obviousness contentions, and that "mere vulnerability" to invalidation is enough to defeat a preliminary injunction motion, citing Amazon.com, Inc. v. Barnesandnoble.com, Inc., 239 F.3d 1343, 1358–59 (Fed. Cir. 2001).  While the Court recognized that an accused infringer "need not make out a case of actual invalidity" under Amazon the proper standard is to show a "substantial question" of invalidity, and "[t]he relevant inquiry is therefore whether the patentee has shown it is more likely than not to prevail over an invalidity challenge."  On the merits, NeoGenomics argued that the '035 patent claims were obvious over a poster presented by Fiona Kaper and colleagues and reproduced in the 2010 PROC. OF THE 101ST ANN. MEETING OF THE AM. ASS'N FOR CANCER RES. entitled "Parallel Preparation of Targeted Resequencing Libraries From 480 Genomic Regions Using Multiplex PCR on the Access Array System," which disclosed "a system for tagging, amplifying, and adding barcodes to DNA locations of interest" termed the "Fluidigm Access Array."  The opinion finds no error in the District Court's decision based in large part by the Court's assessment that NeoGenomics' assertions were "little more than conclusory argument with no meaningful supporting documentation" set forth in [only] "four paragraphs." Citing KSR Int'l Co. v. Teleflex Inc., 550 U.S. 398, 418–19 (2007), the Federal Circuit asserted that "[i]t is not sufficient to merely allege that the individual elements of the claimed invention were each known in the prior art," and that "NeoGenomics failed to articulate a reason why a skilled artisan would have been motivated to use the Fluidigm Access Array system with cfDNA for cancer detection as claimed by the '035 patent."  The Court further held that the District Court did not commit clear error in rejecting NeoGenomics' allegations of sufficient motivation to combine the Fluidigm Access Array system with cfDNA and a reasonable expectation of success thereof in the face of Natera's "significant evidence of obstacles to using cfDNA in the present setting that would have been known to a skilled artisan."  Nor was NeoGenomics persuasive in arguing that the District Court erred in assessing the obstacles raised by Natera based on being able to amplify and sequence ctDNA "with precision" because the '035 patent claims contained no such precision requirement. The Federal Circuit held that while "[u]nclaimed factors relevant to the feasibility of creating a useful claimed invention can impact the motivation to combine analysis," citing Auris Health, Inc. v. Intuitive Surgical Operations, Inc., 32 F.4th 1154, 1159 (Fed. Cir. 2022), here the District Court did not abuse its discretion in deciding against NeoGenomics on whether a skilled worker would have expected the method to be practiced with some level of "precision."

Turning to the issue of irreparable harm, the Court opined that the standard is whether Natera could show a "causal nexus" between infringement and the harm alleged, citing Luminara Worldwide, LLC v. Liown Elecs. Co., 814 F.3d 1343, 1352 (Fed. Cir. 2016).  Such evidence can include "head-to-head" competition and "lost market share" and can arise where the injury alleged is not quantifiable (the old bromide being "no adequate remedy at law").  Natera's evidence of direct competition between the parties in a "two-player" market meant to the Court that "any growth experienced by NeoGenomics would therefore result in lost sales to Natera" which was sufficient to satisfy the standard for irreparable harm.  The Federal Circuit rejected NeoGenomics' argument that the District Court had misinterpreted Presidio Components, Inc. v. American Technical Ceramics Corp., 702 F.3d 1351 (Fed. Cir. 2012), to create a per se standard for competition in the two-player market situation.  According to the opinion, the District Court assessed the circumstances, including the potential for "biopharmaceutical partnerships, business relationships, clinical opportunities, and market share" to be lost by Natera because of competition from NeoGenomics if permitted to continue to compete (recognizing that in Presidio, as here, the patentee was unwilling to grant a license to the accused infringer).  Other factors considered by the Court were the necessity for cancer patients of "continuity of care" which would inhibit patients using a different diagnostic test once NeoGenomics' test was used instead of Natera's test (resulting in loss of current sales plus loss of repeat business/future sales).  Regarding another NeoGenomics' argument the Federal Circuit rejected the aspect of both the Signatura and RaDaR tests as being tumor-informed testing, which was not a claimed limitation of the '035 patent, based upon Natera's evidence that the method claimed in the '035 patent was "critical to overcoming challenges associated with successfully amplifying and sequencing cfDNA in the claimed ctDNA context" and "would be impossible to achieve without practicing the particular methods claimed in the '035 patent."  Finally the Court rejected NeoGenomics' argument that Natera delaying in bringing suit, based on its involvement with other infringement cases and Natera having brought suit within days of NeoGenomics obtaining regulatory approval (Medicare coverage) and or months of NeoGenomics achieving commercial availability.

Regarding the public interest, the Court noted that the District Court considered evidence that Natera's Signatura and NeoGenomics' RaDaR products were approved for use with patients having the same cancer diagnoses and that Natera had commercial capacity to satisfy any increased demand caused by imposition of the injunction.  The Federal Circuit noted that the District Court had carved out sales to existing patients or those involved in "ongoing clinical trials or research projects."  The Federal Circuit also rejected NeoGenomics' claims that the public was harmed because their RaDaR product was superior to Natera's Signatura product in the face of controverting evidence from Natura.  Nor was the Court convinced by testimony of NeoGenomics' expert that their product was superior for certain specific cancers, finding that "the [expert's] letter provides no scientific basis for its broad and conclusory assertions" nor does it "point to any evidence that RaDaR is effective for more types of cancers than Signatera" (while on the contrary Natera provided evidence that its product was approved for all the cancer indications that the RaDaR product was approved for).  And while NeoGenomics provided testimony from a "key opinion leader" as well as market reports and other evidence of its RaDaR product being superior to Natera's Signatura product, none of this evidence was sufficient to convince the panel that the District Court had erred regarding the public interest prong of the preliminary injunction standard.

Finally, the opinion does not set forth its review of the District Court's consideration of the  balance of the hardships (or equities, as termed in the opinion) being in Natera's favor, merely stating that "[w]e have considered NeoGenomics' remaining arguments and find them unpersuasive."

Natera, Inc. v. NeoGenomics Laboratories, Inc. (Fed. Cir. 2024)
Panel: Chief Judge Moore and Circuit Judges Taranto and Chen
Opinion by Chief Judge Moore

H. Lundbeck A/S v. Lupin Ltd. (Fed. Cir. 2023)*

By Kevin E. Noonan --

The provisions of U.S. regulatory law regarding FDA approval for less than all the indications for which an innovator drug was approved under 21 U.S.C. § 355(j)(2)(A)(viii) (the so-called "skinny label) has in the recent past raised something of a kerfuffle before the Federal Circuit (see "GlaxoSmithKline LLC v. Teva Pharmaceuticals USA (Fed. Cir. 2022)").  In contrast, the patency of skinny label approvals under the patent statute was affirmed by the Federal Circuit in a December 7th decision in H. Lundbeck A/S v. Lupin Ltd.

The case arose in ANDA litigation in which Lundbeck and assorted plaintiffs asserted U.S. Patent No. 9,278,096, directed to use of the antidepressant vortioxetine (Trintellix®) for treating patients who discontinued or reduced treatment with other antidepressants due to "sexually related adverse effects," and U.S. Patent No. 9,125,910 for treating patients with vortioxetine for cognitive impairment against all defendants, and U.S. Patent No. 9,101,626, directed to methods for making vortioxetine against defendant Lupin.  Takeda is the NDA holder for Trintellix® and the opinion notes that two patents not in suit, U.S. Patent No. 7,144,884 and 8,476,297 (on the drug compound) expire on June 17, 2026 and expired on October 2, 2022, respectively.  In contrast, the patents in suit expire on March 21, 2032 (the '096 patent) and June 15, 2027 (the '910 patent).  Defendants filed "Paragraph III" ANDAs on the '884 and '297 patents, which ANDAs are limited to treatment of major depressive disorder; this indication is not claimed in the '096 or '910 patents-in-suit.

Claims 1 and 7 of the '096 patent are representative of claims for treating depression without or with reduced adverse sexual side effects with vortioxetine:

1.  A method for the treatment of a disease selected from the group consisting of depression, anxiety, abuse and chronic pain, comprising the administration of a therapeutically effective amount of [vortioxetine] or a pharmaceutically acceptable salt thereof to a patient in need thereof, wherein said patient has previously received medication or is still receiving medication for the treatment of said disease, the medication is ceased or reduced or has to be ceased or reduced due to sexually related adverse events, and the medication is selected from the group consisting of selective serotonin reuptake inhibitors, selective noradrenaline reuptake inhibitors, noradrenaline/serotonin reuptake inhibitors, and tri-cyclics.

6.  The method according to claim 1, wherein Compound I or a pharmaceutically acceptable salt thereof is administered to the patient in unit doses of about 1–50 mg.

7.  The method according to claim 6, wherein the patient is administered between about 1 and 20 mg per day of the hydrobromic acid salt of Compound I orally.

Claims 1, 3, and 6 of the '096 patent are representative of claims for treating cognitive impairment with vortioxetine:

1.  A method of treating cognitive impairment involving decline in speed of processing, executive function, attention, or verbal learning and memory in a patient diagnosed with depression, the method comprising administering a therapeutically effective amount of [vortioxetine] or a pharmaceutically acceptable salt thereof to the patient, wherein . . . the method alleviates a symptom or complication of the cognitive impairment or delays the progression of the cognitive impairment.

3.  The method of claim 1, wherein the depression is major depressive disorder.

6.  The method of claim 3, wherein the method comprises administering a hydrobromide salt of [vortioxetine] to the patient.

Plaintiffs asserted induced or contributory infringement against defendants, asking the District Court for an injunction until the '096 and '910 patents expired.  The District Court held that defendants' ANDAs "neither induced infringement of nor contributorily infringed" the '096 nor '910 patents, and denied the injunction.  Plaintiffs appealed this judgment.

In addition, plaintiffs asserted the '626 patent against defendant Lupin, the opinion stating that claims 1 and 11 were representative; claim 1 recites:

1.  A process for the preparation of [vortioxetine] or a pharmaceutically salt thereof, the process comprising reacting compound II . . ., with a compound of formula III . . ., and a compound [IV] . . ., in the presence of a solvent, a base and a palladium catalyst consisting of a palladium source and a phosphine ligand at a temperature between 60° C. and 130° C.

The District Court construed the claims consistent with plaintiffs' interpretation of the word "reacting" and held Lupin's method of producing vortioxetine would infringe.  Lupin cross-appealed this judgment.

The Federal Circuit affirmed, in an opinion by Judge Dyk joined by Judges Prost and Hughes.  Plaintiffs argued that an infringement action under § 271(e)(2)(A) "creates a separate cause of action that does not require a showing of direct, induced, or contributory infringement by the ANDA filer"; in other words filing an ANDA by itself is an act of infringement.  In the context of this lawsuit, Plaintiffs also asserted that "it makes no difference that the drug is proposed to be sold for a use not covered by the '096 and '910 patents because the drug could be prescribed for those patented uses."  The panel rejected this argument, stating that "'the use . . . claimed in a patent' under section 271(e)(2)(A) must be the use for which an applicant is seeking marketing approval" under their case law.**  The opinion cites Warner-Lambert Co. v. Apotex Corp., 316 F.3d 1348, 1365 (Fed. Cir. 2003), in support of this determination, the opinion stating that how a drug was used was a necessary factor in determining infringement.  This is because otherwise the NDA holder for a particular drug could extend its exclusivity "by regularly filing a new patent application claiming a narrow method of use not covered by its NDA, [which] would confer substantial additional rights on pioneer drug patent owners that Congress quite clearly did not intend to confer," citing Warner Lambert.  Despite the possibility of off-label use, that possibility does not override the basis in § 271(e)(2)(A) to be limited to preventing an ANDA filer from approval for uses subject to patent protection; here, defendants do not seek approval for the uses claimed in the '096 and '910 patents.  Such uses do not raise infringement liability under §§ 271(a), 271(b), or 271(c) and § 271(e)(2)(A) does not create infringement liability independently of these statutory bases for finding infringement, according to the Federal Circuit.

Turning to the District Court's findings that defendants' ANDAs did not constitute infringement of claim 7 under § 271(b), the opinion cites that "instructions may not merely describe an infringing mode; they must 'evidence intent to encourage infringement,'" citing Takeda Pharms. U.S.A., Inc. v. West-Ward Pharm. Corp., 785 F.3d 625, 630–31 (Fed. Cir. 2015).  Plaintiffs' sole evidence for inducing infringement liability was the FDA-approved label, which does not induce infringement of the asserted claims of the '096 patent because it is limited to the indication for treating major depressive disorder (which indication the opinion notes predates the '096 patent).  The opinion expressly distinguishes this situation with that in GlaxoSmithKline LLC v. Teva Pharmaceuticals USA, Inc., 7 F.4th 1320, 1333 (Fed. Cir. 2021), where there was evidence of the existence of advertising or promotional activities and materials that encouraged infringement inter alia by off-label use stratagems.  The panel reiterates their interpretation of § 271(e)(2)(A) that "a patentee can[not] bar the sale of a drug for a use covered only by patents that will have expired simply by securing a new patent for an additional, narrower use," citing Warner-Lambert.  Further, the Court opined:

[W]e do not see how, in the normal course, a label required to market the drug for a use covered by expired patents could demonstrate the required specific intent to encourage infringement of new patents covering different uses.

The panel notes that there may be circumstances (related to safety, for example) where FDA requires a new patented method of use to be included on the label due to such safety concerns, citing for example AstraZeneca LP v. Apotex, Inc., 633 F.3d 1042, 1060– 61 (Fed. Cir. 2010) (instructions to lower a dose for safety reasons); Vanda Pharms. Inc. v. West-Ward Pharms. Int'l Ltd., 887 F.3d 1117, 1131 (Fed. Cir. 2018) (requiring a test and adjustment of drug dose accordingly); and Eli Lilly & Co. v. Teva Parenteral Medicines, Inc., 845 F.3d 1357, 1365, 1368–69 (Fed. Cir. 2017) (taking a supplement to reduce "potentially life-threatening toxicities").  That is not the case here according to the opinion.  Rather, these defendants had properly under the statute "carved out" the indications encompassed by the '096 patent claims, and accordingly the Court held that "[t]he district court correctly determined that, under these circumstances and consistent with our cases," the proposed ANDA labels "will not encourage, recommend, or promote an infringing use."

The opinion concludes its considerations of the induced infringement issue by rejecting plaintiffs' argument that physicians could prescribe the approved drug based on their own "background knowledge together with information in the carved-out label," stating that "mere knowledge of possible infringement by others does not amount to inducement; specific intent and action to induce infringement must be proven," again based on the Warner=Lambert opinion.  Also rejected was plaintiffs' assertion of error by the District Court in "ignoring the lower doses recited in the '096 patent claims, while at the same time arguing with regard to claim validity that the skilled worker would have recognized the lower incidence of adverse sexual events that resulted at any of the approved dosages, the panel stating that "Plaintiffs cannot now fault the district court for crediting their own argument."

With regard to contributory infringement, the panel likewise rejected plaintiffs' arguments, here because there is no liability for contributory infringement for selling an article that is "suitable for substantial noninfringing use" under the statute, 35 U.S.C. § 271(c).  The opinion states that the District Court properly found that vortioxetine had such substantial noninfringing uses over the claims of the '096 patent, for example, by prescribing the drug to "patients with no prior treatment, patients with prior treatment other than with the drugs referenced in the '096 patent, and in cases where the prior antidepressant was ceased or reduced for reasons other than sexually related adverse events (for example, due to poor efficacy)."  Similarly for the '910 patent, substantial noninfringing uses found sufficient to avoid contributory infringement include "prescription for treating MDD, prescription to patients without cognitive impairment, and prescription for purposes unrelated to cognition."  And plaintiffs' assertion that these uses may infringe other Lundbeck patents is not relevant, according to the Court, because the determination under § 271(c) relates and is limited to substantial noninfringing uses of the asserted patents.

In Lupin's cross-appeal regarding the District Court's infringement determination of the '626 patent, the Court found no basis to adopt Lupin's narrow interpretation of the term "reacting" based on the term's plain meaning and rejected Lupin's assertion of the prosecution history for its contrary construction.  The Court found no error by the District Court either for its claim construction nor its infringement determination.

The Court apportioned costs to the defendants in plaintiffs' appeal of the judgment of non-infringement of the '096 and '910 patents and to plaintiffs in defendant Lupin's appeal of the District Court's judgment of infringement of the '626 patent.

Lundbeck A/S v. Lupin Ltd. (Fed. Cir. 2023)
Panel: Circuit Judges Dyk, Prost, and Hughes
Opinion by Circuit Judge Dyk

* The caption in full reads as follows:

H. LUNDBECK A/S, TAKEDA PHARMACEUTICAL COMPANY LIMITED, TAKEDA PHARMACEUTICALS U.S.A., INC., TAKEDA PHARMACEUTICALS INTERNATIONAL AG, TAKEDA PHARMACEUTICALS AMERICA, INC., Plaintiffs-Appellants

v.

LUPIN LTD., LUPIN PHARMACEUTICALS, INC., MACLEODS PHARMA USA, INC., MACLEODS PHARMACEUTICALS LTD., SANDOZ INC., SIGMAPHARM LABORATORIES, LLC, ZYDUS PHARMACEUTICALS (USA) INC., ALEMBIC GLOBAL HOLDING S.A., ALEMBIC PHARMACEUTICALS INC., ALEMBIC PHARMACEUTICALS LIMITED, CADILA HEALTHCARELTD., LEK PHARMACEUTICLS D.D.

** Defendants contended that this argument was waived by it not having been asserted at the district court.

Astellas US LLC v. Hospira, Inc. (Fed. Cir. 2022)

By Kevin E. Noonan --

A change in the weather is known to be extreme
But what's the sense of changing horses in midstream?
I'm going out of my mind, oh, oh
With a pain that stops and starts
Like a corkscrew to my heart
Ever since we've been apart

"You're a Big Girl Now," Blood on the Tracks, Bob Dylan

In perhaps one of his most infelicitous lyrics* Bob Dylan inserted the adage that it is unwise to change horses in midstream.  This lesson comes to mind with regard to the Federal Circuit's decision late last year regarding an attempt to pursue a new theory of infringement just weeks before trial would commence (which attempt failed) in Astellas US LLC v. Hospira, Inc.

The case involved ANDA litigation brought by Gilead Sciences, Inc., Astellas US LLC and Astellas Pharma US, Inc. against Hospira for infringement of U.S. Patent Nos. 8,106,183; RE47,301; and 8,524,883 claiming a particular polymorph (termed Form A, a monohydrate) of regadenoson, an A2A adenosine receptor agonist that is a coronary vasodilator used to mimic cardiac stress and sold as Lexiscan®.  The formula for Hospira's generic regadenoson contained Form G as its active pharmaceutical ingredient (API) that would not infringe Astellas's asserted claim (the basis for Hospira's Paragraph IV certification), made by a process converting crude regadenoson to Form F (another polymorph) to Form G.  Plaintiff's initial theory of the case was that Hospira's generic drug nevertheless infringed the asserted claims, because Form A was made inadvertently by Hospira's third party supplier of an intermediate product and consequently the Form A polymorph was incorporated into Hospira's final generic product (on the basis that when these compounds "are exposed to a sufficient amount of water, including water in the air . . . and in reagents, they will convert to Form A").  In response to Hospira amending the Drug Master File (DMF) portion of its ANDA prior to trial (in an attempt to make Astellas's infringement showing harder to establish, wherein the new DMF recited that its manufacturing process had been optimized to "limit the presence of water"), Astellas asserted an alternative theory alleging that Form A arose as part of Hospira's compounding process in making its generic regadenoson.

The District Court granted Hospira's motion to strike Astellas's newly presented infringement contentions and expert testimony and evidence, with the case going to trial on Astellas's original infringement theory.  The District Court found Hospira did not infringe according to Astellas's original infringement contentions, and Astellas appealed solely on the issue of whether the District Court's preventing their assertion of their alternative infringement theory and contentions and expert evidence associated therewith was an abuse of discretion.

The Federal Circuit ruled that the District Court had not abused its discretion and affirmed the judgment in favor of Hospira, in an opinion by Judge Dyk joined by Judges Reyna and Cunningham.  The opinion notes that the District Court granted Astellas extra fact discovery in response to Hospira's change in its ANDA, but in addition to taking this discovery, Astellas submitted its new infringement contentions and expert evidence related to these contentions.  On the procedural issue of whether Astellas's motion was untimely, the Court recited the circumstances the panel relied upon in finding no abuse of discretion by the District Court.  These included testimony by Astellas's expert in the initial discovery phase that he was offering no opinion regarding whether Form A was made during Hospira's compounding process as well as several timing issues.  These included that Astellas proffered its alternative theory a year after the close of fact discovery and six months after expert discovery closed, and waited 14 months after Hospira's document disclosure, six months after learning of Hospira's ANDA change and two months after receiving Hospira's actual ANDA amendments.  In addition, Astellas waited "more than a month" after the District Court's grant of supplemental discovery prompted by Hospira's ANDA change.  Under these circumstances, the Federal Circuit stated that:

There was no reason, other than Astellas's own litigation choices, that the compounding infringement theory could not have been asserted earlier.

This is not a case where Astellas relied on new information disclosed in the ANDA amendment to craft a new theory of infringement.  Instead, Astellas simply decided that the ANDA amendment would make it harder to prove its original infringement theory and decided to try a new theory related to a process not changed by the amendment.

Based in a supplementary discovery order the District Court had issued against another defendant (who later settled) in this case who had amended its ANDA, the Federal Circuit considered the supplementary discovery order here to have been limited to Hospira's changes to its ANDA and was not broad enough to be used to develop Astellas's alternative infringement theories or proffer expert evidence in support thereof, as well as representations by Astellas to the District Court regarding the limited extent of this discovery.  On this issue the Federal Circuit based its affirmance of the District Court striking Astellas's alternative infringement contention and expert evidence on  the "great deference . . . given to a district court's interpretation of its own order," citing WRS, Inc. v. Plaza Entertainment, Inc., 402 F.3d 424 (3rd Cir. 2005).

The Federal Circuit similarly rejected Astellas's arguments that, timely or not, it was an abuse of the District Court's discretion to exclude its alternative theory of infringement.  Applying Third Circuit law, the Court considered whether Astellas had not satisfied the factors required in the Third Circuit under Meyers v. Pennypack Woods Home Ownership Assn, 559 F.2d 894 (3rd Cir. 1977):

(1) "the prejudice or surprise in fact of the party against whom the excluded witnesses would have testified" or the excluded evidence would have been offered; (2) "the ability of that party to cure the prejudice"; (3) the extent to which allowing such witnesses or evidence would "disrupt the orderly and efficient trial of the case or of other cases in the court"; (4) any "bad faith or willfulness in failing to comply with the court's order"; and (5) the importance of the excluded evidence.

Here, the Federal Circuit held that, while there was no finding under factor (4) of bad faith, the other factors supported the exercise of the District Court's discretion to preclude Astellas's alternative infringement theory.  These included clear evidence that Hospira was surprised by the alternative theory and was prejudiced thereby in view of the time remaining before trial, particularly in view of Astellas's expert's earlier testimony that he had no opinion regarding whether the Form A polymorph arose in Hospira's compounding process and there being insufficient time to perform the testing necessary to show that this conversion did not take place.  The Court also considered the prejudice to other parties to the litigation if the District Court postponed trial long enough for Hospira to complete this testing.  The opinion states that regarding factor (3) Astellas had not presented any persuasive evidence that the District Court erred in finding disruption of the court's calendar, and that Astellas had not shown that the evidence was sufficiently important to satisfy factor (5) (the opinion voicing reasons why the panel was not convinced that the excluded evidence would have been helpful for Astellas in establishing infringement).

Ultimately the decision came down to the District Court's discretion, and the Federal Circuit was unwilling to second guess that court absent more compelling evidence than Astellas was able to provide.

Astellas US LLC v. Hospira, Inc. (Fed. Cir. 2022)
Nonprecedential disposition
Panel: Circuit Judges Dyk, Reyna, and Cunningham
Opinion by Circuit Judge Dyk

* Of course he also wrote this lyric on that album, so maybe it was just a phase:

They say I shot a man named Gray
And took his wife to Italy
She inherited a million bucks
And when she died they came to me
Can I help it if I'm lucky?

"Idiot Wind"

Genentech, Inc. v. Sandoz Inc. (Fed. Cir. 2022)

By Kevin E. Noonan --

The Federal Circuit recently affirmed a district court judgment of invalidity for obviousness and for noninfringement for a series of patents challenged in ANDA litigation, in Genentech Inc. v. Sandoz Inc.  In doing so, a majority of the panel illustrated perhaps unintentionally how initial impressions regarding the issues before the Court can influence the final outcome in circumstances where the Federal Circuit is compelled to give deference to the lower court.

These issues arose in ANDA litigation brought by Genentech and InterMune against ANDA filer Sandoz and its supplier LEK Pharmaceuticals.  The drug at issue was pirfenidone used to treat idiopathic pulmonary fibrosis (IPF), an incurable, chronic, irreversible disease whose patients have a 2- to 5-year average survival length.  There is one other drug, nintedanib that has been approved for treating IPF and the two drugs split the marker evenly (approximately).  Pirfenidone had a long development time (more than 30 years) before obtaining orphan drug approval in 2004 and was approved for IPF treatment in 2014 as Esbriet®, the drug sold by Genentech and the proximal subject of this lawsuit.

Unlike most ANDA suits, the patents at issue here were not directed at the drug, formulations thereof, or methods of treatment, but rather towards administration methods for ameliorating or avoiding certain drug side effects.  There were two categories of patents at issue in the ANDA litigation and this appeal.  The first, termed the "LFT patents," were directed at administration methods for patients having liver abnormalities as detected by biomarker alterations.  These patents were U.S. Patent Nos. 7,566,729 (the "'729 patent"), 7,635,707 (the "'707 patent"), 8,592,462 (the "'462 patent"), and 8,609,701 (the "'701 patent") and the claims at issue are set forth in this table:

The asserted LFT patent claims:

The opinion summarizes the claimed subject matter into five categories:  administration methods that (1) temporarily reduce the administered dose followed by return to the "full" therapeutic dose; (2) maintain the full administered dose; (3) reduce the dose (and maintain the reduced dose); (4) discontinue administration for a week and then return to the full therapeutic dose; and (5) discontinue administration for a week and then administer a reduced dose.

Infringement was assessed as to these claims based on Sandoz's proposed label, which recited how the drug should be administered to patients showing sufficiently severe liver abnormalities:

Dosage modifications or interruptions may also be necessary when liver enzyme and bilirubin elevations are exhibited.  For liver enzyme elevations, modify the dosage as follows:

If a patient exhibits >3 but ≤5 x the upper limit of normal (ULN) ALT and/or AST without symptoms or hyperbilirubinemia after starting pirfenidone tablets therapy:

• Discontinue confounding medications, exclude other causes, and monitor the patient closely.
• Repeat liver chemistry tests as clinically indicated.
• The full daily dosage may be maintained, if clinically appropriate, or reduced or interrupted (e.g., until liver chemistry tests are within normal limits) with subsequent re-titration to the full dosage as tolerated.

wherein the italicized language was particularly relevant to Genentech's allegations sounding in inducement of infringement under 35 U.S.C. § 271(b).

Sandoz asserted invalidity for obviousness over three references:  a scientific journal article by Azuma related to a clinical trial of pirfenidone; a label for Shionogi's pirfenidone product approved in Japan, Pirespa®; and "known, standard medical practices."  The Federal Circuit's opinion characterized the teachings of the Azuma reference to specify a "stepwise" reduction in pirfenidone administration up to and including discontinuing the drug in response to severity of liver-associated side effects, and that the Pirespa® label specified discontinuing the drug.  The District Court had found that four of the five liver-associated side-effect induced alterations in pirfenidone administration were disclosed in the Pirespa® label, and furthermore found that Genentech's asserted claims in the LFT patents were invalid for obviousness in light of the references relied upon by Sandoz.

Sandoz also argued that there was no specific intent to induce infringement and thus its label did not induce infringement.

The other category of patents asserted by Genentech were directed to adverse interactions with another drug, fluvoxamine (termed "the DDI patents").  Fluvoxamine inhibits an enzyme, CYP1A2, that is involved in liver detoxification and metabolism of drugs including pirfenidone, where administration of pirfenidone to a patient taking fluvoxamine would result in what the opinion calls "supertherapeutic" drug levels in the patient's body.  The claims at issue for these patents were as follows:

The opinion summarizes the instructions in Sandoz's label (which forms the basis for Genentech's direct (literal) infringement allegations) as directing that fluvoxamine administration be discontinued prior to administering pirfenidone or reducing the amount of pirfenidone administered to a specified dose (267mg/3 time per day).  The District Court found this label to be insufficient to support Genentech's direct infringement allegations by a preponderance of the evidence because, despite Genentech showing that the label "encourages, recommends, or promotes an infringing use" Genentech failed to show that "such an infringement will in fact occur" (which seems at least odd in view of the function of the label as enshrining FDA determinations regarding how an approved drug can be safely and effectively used).  The basis for the District Court's decision was that Genentech failed to show that any patient would be prescribed both drugs to be administered together or at the same time, a prohibition that if it deemed necessary, the FDA would be capable of requiring, particularly insofar as the label expressly stated that:

The concomitant administration of pirfenidone and fluvoxamine or other strong CYP1A2 inhibitors (e.g., enoxacin) is not recommended because it significantly increases exposure to pirfenidone.  . . .   Use of fluvoxamine or other strong CYP1A2 inhibitors should be discontinued prior to administration of pirfenidone and avoided during pirfenidone treatment.  In the event that fluvoxamine or other strong CYP1A2 inhibitors are the only drug of choice, dosage reductions are recommended.  Monitor for adverse reactions and consider discontinuation of pirfenidone as needed [emphasis added].

The Federal Circuit affirmed, in an opinion by Judge Lourie who was joined by Judge Prost; Judge Newman dissented without an opinion (perhaps getting to the point where the Judge is not willing to waste her judicial breath in cases where her opinion has proven to be unavailing).  With regard to the District Court's finding that the asserted claims of the LFT patents were obvious, the majority displayed the mindset brought to the question by stating that "it is worth noting our initial perception that, as the district court noted, varying doses in response to the occurrence of side effects would seem to be a well-established, hence obvious, practice.  Thus, claiming it as an invention would appear to be at best a long shot" before stating that, like the District Court, the Federal Circuit would give the matter "careful scrutiny."  Perhaps not surprisingly in view of the majority's preconceptions, the Court agreed with Sandoz that these claims were obvious, despite Genentech's objections regarding what Azuma and the Pirespa® label taught to the skilled artisan (which as questions of fact the District Court's findings were due "clear error" deference by the Federal Circuit).  The District Court's findings as to the teachings of the asserted prior art were supported in the majority's view by "record evidence" and expert testimony.  Finally, the majority relied upon the Federal Circuit's rubric following KSR v. Teleflex that "weak secondary considerations [as the District Court and the majority considered Genentech's secondary considerations arguments to be] generally do not overcome a strong prima facie case of obviousness," citing W. Union Co. v. MoneyGram Payment Sys., Inc., 626 F.3d 1361, 1371 (Fed. Cir. 2010).  These arguments included skepticism in the art and long-felt but unmet need; none of these were sufficiently established by Genentech in the majority's view nor had Genentech established that the District Court clearly erred in arriving at its conclusions in this regard.

Having affirmed the District Court's obviousness determination, the panel did not reach the District Court's non-infringement decision.

With regard to the DDI patents, despite citing precedent that "a patentee does not need to prove an actual past instance of direct infringement by a physician to establish infringement in an ANDA case," Vanda Pharms. Inc. v. W.-Ward Pharms. Int'l Ltd., 887 F.3d 1117, 1129–30 (Fed. Cir. 2018), the majority nevertheless opined that the question of direct infringement requires "'consideration of all the relevant evidence,' including the proposed label's instructions and physician practice," citing Ferring v. Watson Lab'ys, 764 F.3d 1401, 1408 (Fed. Cir. 2014), because "past conduct is relevant to what will happen in the future" (a position the opinion acknowledges Sandoz argued).  The majority's affirmance relied upon expert witness testimony that the two drugs (pirfenidone and fluvoxamine) would not be administered together or at the same time based on "decades of treating IPF patients" (which testimony is at least curious in view of the 2014 approval date of Genentech's Esbriet® product) and that there was an alternative product on the market (nintedanib) that the physicians would prescribe instead.  The majority characterized as speculation without evidentiary support Genentech's argument that instructions regarding co-administration were important enough that the FDA included them on Sandoz's label, and in any event were not enough to sufficiently support Genentech's direct infringement arguments according to the majority.  (And in what appears to be something of a "Hail Mary" argument, the majority rejected Genentech's assertion that fluvoxamine can be used to treat COVID-19 infection in an IPF patient as speculation.)

Based on the totality of the evidence relied upon by the District Court, the Federal Circuit majority affirmed the District Court's finding that Sandoz would not necessarily directly infringe the claims of Genentech's DDI patents.

Genentech, Inc. v. Sandoz Inc. (Fed. Cir. 2022)
Panel: Circui9t Judges Newman, Lourie, and Prost
Opinion by Circuit Judge Lourie; dissent without opinion by Circuit Judge Newman

Alpek Polyester, S.A. v. Polymetrix AG (Fed. Cir. 2021)

By Kevin E. Noonan --

While the Federal Circuit has patent law as its principal focus, as a U.S. Circuit Court of Appeals, questions come before the Court on more mundane, procedural matters (which, sometimes being dispositive, does not reduce their importance to the parties and occasionally the rest of us).  One such case was decided on December 16th in Alpek Polyester, S.A. v. Polymetrix AG (complicated, as should be evident from the caption, by involving non-US. parties and having putatively infringing activities arising both here and abroad).

The case arose over Polymetrix's asserted infringement of U.S. Patent Nos. 7,790,840, 7,868,125, and 7,192,545 owned by Alpek (a Mexican company) and exclusively licensed to co-Plaintiff DAK Americas LLC (a U.S. company), the patent claim being directed to methods for producing polyethylene terephthalate (PET) resins; because the matters on appeal were exclusively procedural there was no need in the opinion (or here) to delve into the scope of the claims any further.  Defendant Polymetrix is a Swiss company in the business of supplying equipment and engineering services for constructing plants for making PET resin (while not making the resin itself, i.e., it provides the means but not the product and thus did not itself practice the claimed methods).

The activity that prompted the lawsuit was Polymetrix contracting with a Polish company, Indorama Ventures Poland sp. z o.o. ("IVP") wherein Polymetrix equipped a manufacturing plant located in Wloclawek, Poland to run the patented process.  When the work was completed Polymetrix entered into a "commissioning" period during which the plant was tested (using the patented process to product PET resin); during this time Polymetrix retained ownership of the equipment and IVP withheld payment until the installation passed appropriate tests.

Jurisdiction arose in the U.S. when IVP sent to affiliates in the U.S. (Auriga Polymers and AlphaPet Inc.) samples of PET resin made in the Wloclawek plant using Polymetrix equipment to perform the patented process.  There were three instances of this importation, including one wherein an AlphaPet employee brought the sample into the country personally.  Alpek sued following these activities, alleging that Polymetrix induced infringement under 35 U.S.C. § 271(b) (the predicate literal infringement lying under the provisions of § 271(g)).  While the opinion references "a complicated and protracted international discovery process" that ensued, only three incidents were worthy of the Court's consideration.  The first involved failure of Defendant Polymetrix to disclose under Federal Rule of Civil Procedure 26 the identity of IVP's director, Mr. Saini (the relevance of this failure being Polymetrix's reliance on a declaration in support of a summary judgment motion at issue in this appeal).  Second was disputed testimony in a deposition (of a Rule 30(b)(6) witness representing Auriga) that Polymetrix owned the plant in Wloclawek, Poland, supporting Alpek's motion to amend its complaint to include an allegation of direct infringement under § 271(g).  The third and final discovery dispute involved an assertion of privilege by Polymetrix over an opinion of counsel concerning Alpek's infringement allegations, which Alpek alleged had been waived by disclosure to a potential corporate suitor.

Polymetrix filed a summary judgment motion that it did not infringe, which the District Court granted.  The District Court rejected Alpek's arguments that there were disputed issues of material fact, denied Alpek's motion to strike the Saini testimony due to failure to satisfy Rule 26 when Polymetrix did not identify him as someone with knowledge about the company and its activities, and held that the misstatement at deposition was inadmissible under Federal Rule of Evidence 602 because the witness lacked personal knowledge regarding importation of PET resin made in the Polish plant using the patented process.  The District Court also denied Alpek's motion to amend the complaint as being untimely.  This appeal followed.

The Federal Circuit affirmed, in an opinion by Judge Lourie joined by Judges O'Malley and Stoll.  The opinion addresses the four arguments raised by Alpek on appeal:

• First, Alpek argues that the court abused its discretion by disregarding [the Rule 30(b)(6) witness's] admission that the July 17, 2014 sample was brought into the United States 'for Polymetrix' [arguing that the statement was admissible because the witness's testimony under Rule 30(b)(6) does not require personal knowledge to be admissible].

• Second, Alpek argues that the court erred by finding that Polymetrix did not ratify IVP's importation by using test results from the United States [by receiving and relying on test results it knew were produced by Auriga and AlphaPet in the U.S.]

• Third, Alpek argues that the court erred in failing to recognize fact disputes that stem from Polymetrix's ownership of the equipment under a Swedish law interpretation of the contract[ and]

• [F]ourth, Alpek argues that the court erred by declining to strike the Saini declaration upon which Polymetrix heavily relied to support its summary judgment motion [based on Federal Rule of Civil Procedure 37].

Polymetrix's counterargument was based on the causation prong of § 271(b), i.e., that its activities did not cause IVP to import into the U.S. PET resin samples for testing.  Regarding Alpek's first argument, Polymetrix contended that the witness misspoke due to misunderstanding the question (which the witness clarified at the time during subsequent testimony during the deposition).  The Federal Circuit, applying Eighth Circuit law appropriate for reviewing the District Court's decision here, noted that in the Eighth Circuit evidence to be considered on summary judgment must be "admissible evidence," citing Crews v. Monarch Fire Prot. Dist., 771 F.3d 1085, 1092 (8th Cir. 2014) (emphasis in original) (citing Nooner v. Norris, 594 F.3d 592, 603 (8th Cir. 2010).  Under the applicable abuse of discretion standard, the Federal Circuit found no abuse (noting that the witness did not testify at trial and "would not [have been] admissible at trial under Federal Rule of Evidence 801(d)(2)" nor Federal Rule of Civil Procedure 32(a)(3) relating to the testimony of an adverse party.  The opinion also distinguished seemingly contrary precedent in General Mills Operations, LLC v. Five Star Custom Foods, Ltd., 703 F.3d 1104, 1110 (8th Cir. 2013), because the disputed testimony was not by an adverse party's witness.  Finally, the Federal Circuit did not find Alpek's argument persuasive insofar as it relied on two words ("for Polymetrix") "excerpted from one question in one deposition in the larger context of a protracted discovery process that lasted years" and was asserted by Alpek for an inducement argument that was "contrary to the overwhelming majority of the evidence which demonstrates that Polymetrix had no knowledge or concern about where, when, or how IVP conducted performance tests."  In the panel's view the evidence showed the witness simply misspoke.  The Court found no genuine issue of material fact here that would justify the "delay and expense" of a trial.

Regarding Alpek's second argument, the Federal Circuit did not see any genuine issue of material fact on the evidence, which the Court considered to be supported only with "a conclusory assertion by [Alpek's] expert."  According to the opinion, the "overwhelming majority of the evidence" supported a finding that AlphaPet was not the source of the data relied upon by Polymetrix with regard to the performance of the Polish plant (including agreement with the District Court that Alpek blundered when it asserted that this data "match[ed] up almost exactly," the opinion stating that "If the AlphaPet test results were really the source of the data for Polymetrix's report, we can discern no reason why the two sets of data would not match up exactly" (emphases in opinion).

As for Alpek's third argument, the Federal Circuit agreed with the District Court that the details of Swedish contract law, asserted to support Alpek's contention that under that law Polymetrix was responsible for the activities in the Polish plant, were "inapposite."  "As a matter of American law," according to the opinion, 'the mere fact that Polymetrix owned the plant equipment is wholly insufficient for Alpek to meet its burden of proving that Polymetrix took active steps to induce IVP to infringe," citing MGM Studios Inc. v. Grokster, Ltd., 545 U.S. 913, 935–36 (2005), in support for this principle.

Finally, the Court rejected Alpek's fourth argument, based in part on the breadth of the District Court's discretion on discovery matters and enforcement of the Civil Procedure rules.  The Federal Circuit saw none of the surprise or prejudice the Rule was intended to prevent, in view of the "more than 1,000 documents produced during discovery" bearing the witness's name.

Having dispensed with the summary judgment portion of the appeal, the panel turned to the District Court's denial of Alpek's motion to amend its complaint.  Here the Court found no justification for Alpek's failure to file its motion by the deadline date the District Court had established, and the panel rejected Alpek's allegations that witness testimony adduced during a deposition that occurred after the deadline alerted it to the factual bases for the amended complaint, i.e., that Polymetrix was a literal infringer under § 271(g).  And Alpek's arguments, according to the opinion, "consist[ed] of mere disagreement with the magistrate judge's view of the facts."  Under these circumstances the Federal Circuit affirmed denial of Alpek's motion to amend.

The final issue considered by the Court was Alpek's motion to compel production of attorney opinion based on waiver due to disclosure to Polymetrix's corporate suitor.  The Court agreed with Polymetrix that the panel need not address the issue because it "has no bearing on the district court's summary judgment ruling."  The opinion notes that Alpek had the burden of showing that Polymetrix caused IVP's infringement of the patents-in-suit, while the opinion even if offered into evidence would only address Polymetrix' intent to induce infringement, citing Omega Patents, LLC v. CalAmp Corp., 920 F.3d 1337, 1352–53 (Fed. Cir. 2019).  Because the District Court's basis for granting summary judgment was Alpek's failure to establish Polymetrix's causation of IVP's asserted infringement, "the issue of intent did not factor into the district court's grant of summary judgment" according to the Court (emphasis in opinion).  This issue, in view of the Court's affirmance of the District Court's grant of summary judgment, was thus moot according to the panel.

Alpek Polyester, S.A. v. Polymetrix AG (Fed. Cir. 2021)
Nonprecedential disposition
Panel: Circuit Judges Lourie, O'Malley, and Stoll
Opinion by Circuit Judge Lourie

Jennewein Biotechnologie GmbH v. International Trade Commission (Fed. Cir. 2021)

By Kevin E. Noonan --

The International Trade Commission can more readily provide injunctive relief against an adjudged infringer than a district court, under appropriate conditions (i.e., with regard to an infringing product or a product made by infringing a claimed method).  In September, the Federal Circuit affirmed an exclusion order by the Commission in Jennewein Biotechnologie GmbH v. International Trade Commission (Glycosyn LLC joined as an Intervenor based on its patent being the basis for the exclusion order), based on importation of a product made by a patented method, which relied in part on an application of the doctrine of equivalents in establishing infringement (something that has become more common of late; see, e.g., Ajinomoto Co. v. International Trade Commission).

The matter arose when Glycosyn filed a complaint before the ITC under 19 U.S.C. § 1337 for importing milk oligosaccharaides (particularly, fucosyllactose or 2'-FL) made using methods claimed in its U.S. Patent No. 9,970,018.  Claim 1 is representative of the patented methods:

1.  A method for producing a fucosylated oligosaccharide in a bacterium, comprising providing an isolated E. coli bacterium comprising,
    (i)  a deletion or functional inactivation of an endogenous β-galactosidase gene;
    (ii)  an exogenous functional β-galactosidase gene comprising a detectable level of β-galactosidase activity that is reduced compared to that of a wildtype E. coli bacterium, wherein the level of β-galactosidase activity comprises between 0.05 and 200 units;
    (iii)  an inactivating mutation in a colanic acid synthesis gene; and
    (iv)  an exogenous lactose-accepting fucosyltransferase gene;
    culturing said bacterium in the presence of lactose;
and
    retrieving a fucosylated oligosaccharide from said bacterium or from a culture supernatant of said bacterium.

Relevant limitations were that the bacterium has an inactivated colonic acid synthase gene and that the endogenous β-galactosidase gene (lacZ) is deleted or inactivated and an exogenous lacZ gene had been added to produce low-level ("between 0.05 and 200 Miller units") β-galactosidase activity; this enzymatic activity would degrade residual lactose that would be difficult and expensive to eliminate in the final product, while being expressed at a level low enough not to "significantly diminish the intracellular lactose pool."

Important cell characteristics resulting from these genetic manipulations included: (1) an increased intracellular guanosine diphosphate (GDP)-fucose pool; (2) an increased intracellular lactose pool; and (3) a fucosyltransferase, resulting in an apparently delicate metabolic balance.

The basis for Glycosyn's ITC complaint was Jennewein's importing 2'-FL made by the process claimed in the '018 patent.  Two of the strains express lacZα and lacZΩ, two gene fragments that when expressed together produce active β-galactosidase, with expression of the lacZΩ fragment being under temperature regulatory control (i.e., the gene is expressed at 42°C but not at 30°C).

The ALJ construed the limitations "'β-galactosidase activity comprises between 0.05 and 200 units' to mean 'β-galactosidase activity is measurable at between exactly 0.05 and exactly [200] Miller Units, as defined in Miller'"; "functional β-galactosidase gene" to mean "a functional sequence of DNA that encodes β-galactosidase;" and the term "exogenous" to have its plain and ordinary meaning.  The ALJ did not impose any temporal limits on the claimed activity ("the claimed activity need only be met 'at some point in time'").  Under this construction, the ALJ held that the two accused strains that expressed the lacZα and lacZΩ fragments infringed while a third strain (that only expressed the lacZα fragment) and did not use lactose to produce 2'-FL did not have sufficient evidentiary findings to adjudicate whether it infringed or not.

The Commission reviewed the ALJ's findings and concluded that the two strains that expressed lacZα and lacZΩ fragments infringed under the doctrine of equivalents, and that the third, lacZα-expressing strain did not infringe.  This appeal followed.

The Federal Circuit affirmed, in an opinion by Judge Chen joined by Judges Lourie and Bryson.  The panel expressly rejected Jennewain's three arguments:

(1) [that] Jennewein's [two strains adjudged to infringe did not] satisfy the claim limitation requiring that "the level of β-galactosidase activity comprises between 0.05 and 200 units"; (2) [that] Jennewein's [two strains adjudged to infringe did not] satisfy the "exogenous functional β-galactosidase gene" claim limitation; and (3) that the ITC erred in holding that "the level of β-galactosidase activity comprises between 0.05 and 200 units" claim limitation does not require the β-galactosidase activity to occur "within the claimed range at substantially all times during 2'-FL production and retrieval."

As for Jennewein's first argument, the Federal Circuit assessed the Commission's decision under the substantial evidence standard appropriate for questions of fact such as infringement.  The panel held that the evidence presented to the Commission was sufficient under this standard to withstand Jennewein's appeal, and in particular that no negative control strain was needed when performing the Miller assay to determine β-galactosidase activity.  There was no evidence of "background" lactose being produced in these cells or that any other enzymatic pathway produced this sugar other than the combination of the lacZα and lacZΩ fragments to produce functional (albeit barely) β-galactosidase (and thus that there was nothing to control for), according to the Court.  The panel agreed that any β-galactosidase activity detected at the lower temperature (30°C) was due to "leakage" in the temperature control of lacZΩ fragment expression, according to unrebutted expert (Glycosyn's)) testimony as well as other controls performed as part of the Miller assay.

The Court also was not convinced by Jennewein's quantitative arguments that showed the two negative control strains having higher Miller values than the accused strains.  Because the negative control strains should only have "background" β-galactosidase activity levels these results were anomalous for the panel, leading them to conclude that these strains were "not valid" as negative controls.  That the two control strains had different Miller levels also suggested to the Court that there was something amiss.  (There were also communications between Jennewein and a third party hired to assess infringement that undercut Jennenwein's arguments in this regard, to the effect that the control strains were "not suitable.")

The Federal Circuit found that Jennewein's strains satisfied the "exogenous functional β-galactosidase gene limitations" under the substantial evidence standard, at least under the doctrine of equivalents.  Jennewein based its arguments on the endogenous nature of the lacZα β-galactosidase gene fragment but the Federal Circuit agreed with the Commission (supported by substantial evidence) that the (barely) functional β-galactosidase gene was exogenous because the lacZΩ fragment was exogenous.  (The lacZΩ fragment itself is exogenous to the E. coli genome, having originated according to the opinion in a prophage.)

Finally, the panel agreed with the Commission that there was no temporal aspect recited in the claims and rejected Jennewein's argument that the Commission erred by not requiring Glycosan to establish that "the modified bacterium's level of β-galactosidase activity be 'within the claimed range substantially throughout 2'-FL production and retrieval'" based on the Commission's claim construction.  In reaching this conclusion, the Federal Circuit reviewed the Commission's claim construction de novo because the Commission had relied solely on intrinsic evidence, using the rubrics set forth in Phillips v. AWH Corp., 415 F.3d 1303, 1312 (Fed. Cir. 2005) (en banc), finding no error.

Jennewein Biotechnologie GmbH v. International Trade Commission (Fed. Cir. 2021)
Panel: Circuit Judges Lourie, Bryson, and Chen
Opinion by Circuit Judge Chen

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

By Kevin E. Noonan --

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

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

The '664 patent:

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

The '682 patent:

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

The '635 patent:

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

By Kevin E. Noonan --

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

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

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

Claim 1 of the '024 patent:

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

Claim 1 of the '468 patent:

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

Claim 1 of the '530 patent:

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

By Kevin E. Noonan --

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Top Stories of 2020: #5 to #8

By Donald Zuhn –-

After reflecting upon the events of the past twelve months, Patent Docs presents its 14th annual list of top patent stories.  For 2020, we identified eight stories that were covered on Patent Docs last year that we believe had (or are likely to have) a significant impact on patent practitioners and applicants.  Today, we count down stories #8 to #5, and later this week we will count down the top four stories of 2020.  As with our other lists (2019, 2018, 2017, 2016, 2015, 2014, 2013, 2012, 2011, 2010, 2009, 2008, and 2007), links to our coverage of these stories (as well as a few links to articles on related topics) have been provided in case you missed the articles the first time around or wish to go back and have another look.  As always, we love to hear from Patent Docs readers, so if you think we left something off the list or disagree with anything we included, please let us know.  In addition, we will be offering a live webinar on the "Top Patent Law Stories of 2020" on January 20, 2020 from 10:00 am to 11:15 am (CT).  Details regarding the webinar, which will focus on a few of the most important stories on this year's list, can be found here.

8.  Patenting and Artificial Intelligence

In October, the U.S. Patent and Trademark Office, which had earlier issued a request for comments on patenting artificial intelligence (AI) based inventions and then collated the comments it received from stakeholders, released a report entitled "Public Views on Artificial Intelligence and Intellectual Property Policy."  In its report, the USPTO noted that most commenters believed the current framework for examining computer-implemented software inventions should be suitable for examining AI-based inventions, but that it may be difficult to meet the requirements of 35 U.S.C. § 112(a) for certain AI-based inventions; that most commenters believed that AI may lead to changes in how the standard of a person of ordinary skill in the art is interpreted; and that some commenters expressed concerns that AI would lead to a proliferation of prior art making it difficult for examiners to conduct searches for relevant prior art.  Shortly after releasing that report, the USPTO released a study entitled "Inventing AI," which highlighted the increasing prevalence of AI-based patent applications in the U.S. over the past few decades.  The study, prepared by the Office of the Chief Economist of the USPTO, surveyed publicly available granted U.S. patents and U.S. patent application pre-grant publications published from 1976 through 2018.  In the study, the USPTO sets forth the perhaps unsurprising finding that the number of AI patent applications increased by more than 100% between 2002 and 2018, and the more surprising finding that the share of applications relating to AI grew from 9% to nearly 16% of all patent applications over that same time period.  The study suggests that it is clear that AI-based patents will remain an important part of the U.S. patent landscape going forward.

For information regarding this and other related topics, please see:

• "New USPTO Study Shows Rapid Growth, Regional Spread of AI-Based Patenting," October 27, 2020
• "USPTO Publishes Report on AI-Related Policies," October 11, 2020
• "'Creativity Machine' Cannot Be Named As Inventor," August 18, 2020

7.  CRISPR Interference Progresses

Five years ago, the journal Science picked the CRISPR (clustered regularly interspaced short palindromic repeats) technology as its "Breakthrough of the Year," declaring that the technology had "matured into a molecular marvel."  Not surprisingly, CRISPR's status as breakthrough molecular marvel has resulted in a battle over who has the best patent position with respect to this technology.  And despite an ongoing and worsening pandemic, Interference No. 106,115 between the Broad Institute, Harvard University, and the Massachusetts Institute of Technology (as Senior Party) and the University of California/Berkeley, the University of Vienna, and Emmanuelle Charpentier (as Junior Party) moved forward in 2020 with the two Parties presenting various motions and oppositions to those motions.  CRISPR interferences have now made three of our last four top stories lists, and could very well be on next year's list as well.

In a related development, the Opposition Division of the European Patent Office revoked European Patent No. EP 2771468 in its entirety in January.  The patent, which named as Proprietors the Broad Institute, MIT, and Harvard College, had been opposed by Novozymes and CRISPR Therapeutics.  In December, the Technical Board of Appeal affirmed the revocation, finding that because Rockefeller University had not been named as an Applicant, the named Proprietors could not validly claim priority to several provisional applications, and by the filing date of the provisional application to which the named Proprietors could validly claim priority, there had published prior art that invalidated the granted claims.

For information regarding this and other related topics, please see:

• "Broad Files Priority Motion in CRISPR Interference*," December 31, 2020
• "CVC Files Substantive Motion No. 3 (for Improper Inventorship) and Broad Opposes," December 30, 2020
• "Broad Files Motion Opposing CVC's Motion to Subpoena Witnesses," December 28, 2020
• "Broad Institute Loses Appeal in European Patent Office, Patents Remain Revoked," December 8, 2020
• "CVC Discloses Priority Evidence and Earliest Conception Date in Interference," November 19, 2020
• "CRISPR Housekeeping," October 29, 2020
• "PTAB Grants Broad Motion No. 4 for Priority Benefit to U.S. Provisional Application No. 61/736,527," October 6, 2020
• "PTAB Denies Broad Motion No. 3 to De-designate Claims as Not Corresponding to Count No. 1," October 4, 2020
• "CVC Takes Its Turn at Filing Dispositive Motion to End Interference," September 28, 2020
• "PTAB Denies Broad Motion No. 2 to Substitute the Interference Count," September 27, 2020
• "Claim Construction by PTAB in CRISPR Interference Decision," September 24, 2020
• "PTAB Decision Denying Broad's Substantive Motion No. 1 in CRISPR Interference," September 20, 2020
• "PTAB Decides Parties' Motions in CRISPR Interference," September 11, 2020
• "PTAB Hears Oral Argument on Motions in Interference No. 106,115," May 19, 2020
• "The Plot Thickens: Sigma Aldrich Has Allowed Claims," May 14, 2020
• "PTAB Sets Date for Oral Argument in CRISPR Interference," April 30, 2020
• "CVC Files Reply to Broad Opposition to CVC's Motion to Exclude Broad Evidence," April 26, 2020
• "Broad Reply No. 4 to CVC's Opposition No. 4 to Broad's Motion No. 4 for Priority to U.S. Provisional Application No. 61/736,527," April 22, 2020
• "Broad Reply No. 3 to CVC's Opposition No. 3 to Broad's Motion No. 3 to De-designate Claims as Not Corresponding to Count No. 1," April 22, 2020
• "Broad Reply No. 2 to CVC's Opposition No. 2 to Broad's Motion No 2 to Substitute the Count," April 21, 2020
• "CVC Files Motion to Exclude Broad Evidence; Broad Opposes," April 16, 2020
• "CVC Reply No. 2 to Broad's Opposition No. 2 to CVC's Motion No. 2 to Be Accorded Benefit of Priority," April 14, 2020
• "CVC Reply No. 1 to Broad's Opposition No. 1 to CVC's Motion No. 1 to Be Accorded Benefit of Priority," April 12, 2020
• "CRISPR Housekeeping," March 3, 2020
• "CVC Files Motion in Opposition to Broad's Substantive Motion No. 4," February 20, 2020
• "CVC Files Motion No. 3 in Opposition to Broad's Substantive Motion No. 3 to De-designate Claims as Not Corresponding to Count No. 1," February 10, 2020
• "CVC Submits Motion No. 2 in Opposition to Broad's Substantive Motion No. 2 to Substitute the Count," February 5, 2020
• "Broad Files Opposition to CVC's Motion No. 1 for Priority Benefit," January 30, 2020
• "Meanwhile, Back at the Broad-CVC Interference . . .," January 29, 2020
• "Broad Institute Patents Remain Revoked in Europe," January 28, 2020

6.  IP Decisions Implicate Sovereign Immunity

Last year, the question of sovereign immunity in patent cases -- more particularly whether tribal sovereign immunity could protect the St. Regis Mohawk Indian Tribe from being named as a party in an inter partes review (IPR) proceeding, and whether the University of Minnesota, as an "arm of the state," could assert sovereign immunity in an IPR -- made our top stories list (coming in at #3).  The issue of sovereign immunity with respect to IP cases has once again made our list for 2020.  In two recent cases, the Federal Circuit determined in Gensetix, Inc. v. Board of Regents of the University of Texas System that Gensetix was without remedy for a claim of infringement asserted against the Baylor College of Medicine, Diakonos Research, and William Decker with respect to patents licensed from the University of Texas (UT), because UT refused to join as a necessary party on sovereign immunity grounds.  In this case, the Federal Circuit found that the Eleventh Amendment precluded involuntary joinder of a State in a lawsuit brought by a citizen of the State or other States.  And last month, in Board of Regents of the University of Texas System v. Baylor College of Medicine, the Federal Circuit found that state sovereign immunity did not prevent a petitioner from instituting an IPR against a state or arm of the state in view of its decision in Regents of the University of Minnesota v. LSI Corp. (for which certiorari was denied in 2020).

For information regarding this and other related topics, please see:

• "Board of Regents of the University of Texas System v. Baylor College of Medicine (Fed. Cir. 2020)," December 23, 2020
• "Gensetix, Inc. v. Board of Regents of the University of Texas System (Fed. Cir. 2020)," July 27, 2020
• "Allen v. Cooper (2020)," March 23, 2020

5.  Doctrine of Equivalents Continues to Make Comeback

The doctrine of equivalents is a Supreme Court-created patent doctrine that arose in Graver Tank & Mfg. Co. v. Linde Air Products Co., 339 U.S. 605 (1950).  However, the doctrine fell into disfavor at the Federal Circuit during the 1990's and arguably provided the first inkling to the Supreme Court that the Federal Circuit's patent jurisprudence would benefit from the Court's closer oversight.  In Warner-Jenkinson Co. v. Hilton Davis Chem. Co. and Festo v. Shoketsu Kinzoku Kogyo Kabushiki, the Supreme Court reiterated the vibrancy of the doctrine; nevertheless, its successful assertion continued to decline.

As we noted in our top stories list last year, the doctrine of equivalents began to make a bit of a comeback in 2019 (enough to make last year's top stories list, coming in at #10), and this comeback continued in 2020.  In March, the Federal Circuit continued its recent willingness to affirm findings of infringement under the doctrine of equivalents in Galderma Laboratories, L.P. v. Amneal Pharmaceuticals LLC, affirming the District Court's decision regarding infringement under the doctrine of equivalents with respect to some asserted patents (while reversing as to infringement under the doctrine of equivalents with respect to other asserted patents).  And then last month, in Eli Lilly & Co. v. Apotex, Inc., the Federal Circuit again affirmed a finding of infringement under the doctrine of equivalents.  Between those two decisions, however, the Federal Circuit, in Eagle Pharmaceuticals Inc. v. Slayback Pharma LLC, applied the dedication-disclosure doctrine to affirm a District Court dismissal on the pleadings of infringement allegations under the doctrine of equivalents.

For information regarding this and other related topics, please see:

• "Eli Lilly & Co. v. Apotex, Inc. (Fed. Cir. 2020)," December 27, 2020
• "Supreme Court Denies Another Certiorari Petition on Doctrine of Equivalents," June 16, 2020
• "Eagle Pharmaceuticals Inc. v. Slayback Pharma LLC (Fed. Cir. 2020)," May 11, 2020
• "Galderma Laboratories, L.P. v. Amneal Pharmaceuticals LLC (Fed. Cir. 2020)," March 29, 2020
• "DOE Infringers Petition for Certiorari over PHE "Tangential Relationship" Test," March 18, 2020

Eli Lilly & Co. v. Apotex, Inc. (Fed. Cir. 2020)

By Kevin E. Noonan --

After more than two decades of being the red-headed stepchild of patent infringement before the Federal Circuit, infringement under the doctrine of equivalents has made a dramatic comeback in the past few years, the Court affirming plaintiffs asserting their patents under the doctrine six times (versus denying DOE infringement on the basis of prosecution history estoppel twice, on the basis of the dedication-disclaimer estoppel twice, and finding no equivalents twice).  One of those affirmances was in Eli Lilly & Co. v. Hospira, Inc., directed to the same patent and with assertion of infringement under the doctrine of equivalents as in the most recent case decided by the Federal Circuit, Eli Lilly & Co. v. Apotex, Inc.

This case arose in ANDA litigation over Apotex's generic version of Eli Lilly's ALIMTA® (premetrexed disodium) drug product for treating mesothelioma and certain lung cancers.  Lilly asserted Orange Book-listed U.S. Patent No. 7,772,209 against Apotex for infringement under the doctrine of equivalents pursuant to 35 U.S.C. § 271(e)(2); claims 1 and 12 are representative:

1.  A method for 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, cyanocobalamin, 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.

The accused infringing article, Apotex's generic version of ALIMTA®, comprised pemetrexed dipotassium (instead of the disodium salt).  As explained in this opinion, while the District Court was considering the parties' cross-motions for summary judgment, the Federal Circuit handed down its decision in Eli Lilly v Hospira for infringing generic versions of ALIMTA® comprising pemetrexed ditromenthamine.  In applying this decision, the District Court considered whether, in the face of rejection, Lilly's change from ALIMTA to "pemetrexed disodium" raised an estoppel sufficient for the Court to find infringement under the doctrine of equivalents for dipotassium species.  Neither this substitution nor expressly reciting "pemetrexed disodium" in the claim was sufficient to raise prosecution estoppel in the District Court's opinion.  The District Court having granted summary judgment against Apotex for infringement under the doctrine of equivalents, this appeal followed.

The Federal Circuit affirmed, in an opinion by Judge Stoll joined by Chief Judge Prost and Judge Bryson.  In the panel's view, Lilly's substitution of "ALIMTA" with "pemetrexed disodium" was not a narrowing amendment that raises prosecution history estoppel, the Court expressly relying on its earlier Eli Lilly v. Hospira precedent.  One basis for this conclusion was that the '209 specification expressly equated ALIMTA with pemetrexed disodium, thereby introducing no narrowing amendment (being in the panel's view merely a change in nomenclature).  This equivalence was supported by the Examiner's rejection of claims reciting ALIMTA for indefiniteness, the opinion quoting MPEP § 2173.05(u) (2004) for the proposition that "[i]f the trademark or trade name is used in a claim as a limitation to identify or describe a particular material or product, the claim does not comply with the requirements of 35 U.S.C. 112, second paragraph," that "claim scope is uncertain since the trademark or trade name cannot be used properly to identify any particular material or product," and that the "value of a trademark would be lost to the extent that it became descriptive of a product, rather than used as an identification of a source or origin of a product."  In response Lilly swapped "ALIMTA" with "pemetrexed disodium" in its claims, which in due course passed to issue in the '209 patent.  In the Court's view "[n]othing in the prosecution history suggests that Lilly's amendment narrowed the claims, that the Examiner understood Lilly to be narrowing the claims, or that either Lilly or the Examiner understood "ALIMTA" to mean anything other than pemetrexed disodium."

The Court considered Apotex's reading of the District Court's reasoning, that the Examiner's indefiniteness rejection rested on ALIMTA meaning either pemetrexed disodium or pemetrexed alone, to be a "misread[ing] of the prosecution history."  It was not the case that the Examiner rejected claims reciting ALIMTA for being indefinite and for reciting a trade name; rather, in the Court's view the rejection was raised that such claims were indefinite because they recited the ALIMTA trade name.

And finally, the panel also did not credit Apotex's argument that in a corresponding European Patent Convention application the Applicant had substituted pemetrexed disodium for pemetrexed per se, saying "[i]n light of the European prosecution history as a whole, we do not read Lilly's statement that it was "refocus[ing]" the claims in its application to suggest that Lilly equated "ALIMTA" with "pemetrexed."

Eli Lilly & Co. v. Apotex, Inc. (Fed. Cir. 2020)
Nonprecedential disposition
Panel: Chief Judge Prost and Circuit Judges Bryson and Stoll
Opinion by Circuit Judge Stoll