Patent Docs

Wilson v. Martin (Fed. Cir. 2019)

By Kevin E. Noonan --

Ever since the Supreme Court's decision in Dickerson v. Zurko, decisions from the U.S. Patent and Trademark Office (whether in ex parte examination or any of the many varieties of actions before the Patent Trial and Appeal Board) involving questions of fact are treated on appeal with almost overwhelming deference.  This lesson was learned again by the losing party in an interference, styled Wilson v. Martin, where the PTAB held the claims corresponding to the count in the interference were anticipated by the prior art.

The interference was declared between Wilson's U.S. Patent No. 8,809,044 and Martin's U.S. Application No. 14/814,267.  The claims of the '044 patent were directed to methods for using a cell culture apparatus comprising semipermeable membranes (that permit passage of gas but not liquids like culture media).  The culture apparatus comprises multiple vertical shelves with two or more compartments for culturing cells wherein cells and the liquid culture media are placed:

Martin's '276 application is also directed to a liquid cell culture apparatus having two or more compartments having a gas permeable membrane.

The count in the interference is identical to claim 1 of the '044 patent:

1.  A method of culturing animal cells in a gas permeable multi-shelf cell culture apparatus, the method comprising:
    adding animal cells and media into a gas permeable multi-shelf apparatus comprising two or more culture compartments, each compartment including a shelf comprised of gas permeable, liquid impermeable material for cells to reside upon, each shelf connected to an opposing surface, a fluid pathway shared by said culture compartments, and each said shelf is in contact with a gas space,
    whereby said apparatus is incubated in the presence of ambient gas suitable for animal cell culture, oriented in a position such that said culture compartments are located one above the other, each said shelf is in a horizontal position with said gas space located below it, animal cells reside upon at least a portion of each said shelf, said culture compartments include media in contact with said shelf and said opposing surface, and ambient gas resides within each said gas space and is in contact with each shelf.

For comparison, the opinion set forth claim 2 of the '267 application:

2.  A method of culturing cells in a gas permeable multi-shelf cell culture apparatus, the method comprising:
    adding cells and media into a gas permeable multi-shelf apparatus comprising two or more culture compartments, each compartment including a shelf comprised of gas permeable, liquid impermeable material for cells to reside upon, each shelf connected to an opposing surface, a fluid pathway shared by said culture compartments, and each said shelf is in contact with a gas space,
    whereby said apparatus is incubated in the presence of ambient gas suitable for cell culture, oriented in a position such that said culture compartments are located one above the other, each said shelf is in a horizontal position with said gas space located below it, cells reside upon at least a portion of each said shelf, said culture compartments include media in contact with said shelf and said opposing surface, and ambient gas resides within each said gas space and is in contact with each shelf.

The "ambient gas" term italicized in each claim was the basis for the PTAB's invalidation of Wilson's claims and the Federal Circuit's review.

Martin filed a motion in the interference that a prior art reference to Toner (U.S. Patent No. 6,759,245) anticipated most of Wilson's claims-in-interference corresponding to the Count, supported by two expert witness declarations.  The Toner reference discloses "systems and methods for culturing animal cells using modular cell culturing devices with gas-permeable membranes" having structures with common (left, 222) or individual (right, 20) oxygenated fluid compartments:

The parties proposed different constructions for the term "ambient gas" that were not used by the Board, which did not construe the term because the Toner reference, in its opinion, disclosed the "ambient gas' limitation using either of the proposed constructions.

The Board held that the reference disclosed a multiplicity of ports that communicate between the interior and exterior of the device that would permit outside air to enter the device.  The Board held that the gas could be air or other oxygenated "fluid" and that "ambient gas" describes "[a]ir passing from the exterior of the device into the interior of the device" supported by Martin's expert who averred that "the common gas space inside the device is open to the ambient environment for venting air or the mixture of air with other gases supplied into the gas space via the inlet."

Wilson contended before the Board that the Toner reference did not anticipate its claims-in-interference because it required the gas to be "pumped or forced into the device."  The Board rejected this interpretation because the reference disclosed "static, as well as directional, flow of the oxygenated fluid."  The Board also rejected Wilson's characterization of the nature of the gas disclosed in the Toner reference as having "carefully controlled characteristics different from 'those found in standard ambient cell culture conditions,'" stating that the gas in Toner needs merely to be "ambient" (albeit conceding that Toner does not expressly use the word "ambient" but that it is "inherent or otherwise implicit" in the reference, citing Standard Havens Prods., Inc. v. Gencor Indus., Inc., 953 F.2d 1360, 1369 (Fed. Cir. 1991)).

Finally, the Board refused to preclude Martin from asserting the Toner reference for disclosing the "ambient gas" reference based on judicial estoppel because assignee Corning (the real party in interest) had made inconsistent statements during prosecution of the parent application to the '267 application-in-interference, inter alia because the Board could rely on the expert testimony before it from both parties.

Consequently, the Board held that all Wilson's claims in the '044 patent at issue in the interference were invalid as being anticipated or obvious over the Toner reference.  Wilson appealed.

The Federal Circuit affirmed, in an opinion by Judge Reyna joined by Chief Judge Prost and Judge Stoll.  With regard to the Board's anticipation determination, the panel found that this conclusion was supported by the written description of the Toner patent and the figures set forth therein.  Important in this outcome was Wilson's argument that Toner only disclosed embodiments wherein the gas was provided by a gas tank (and thus not "ambient"), where the Federal Circuit pointed to Figure 8A not showing a gas tank and disclosure that embodiments having a gas tank as the source of gas were "preferable" but not required.  Further, the panel credited (and gave deference to) the Board's consideration of Martin's expert.  Despite the absence of the conventional bases for giving deference to expert witness testimony at trial (that the factfinder can observe the witness' demeanor, for example, which the Board cannot, relying on only the written record and portions of deposition transcripts), the Federal Circuit states that "the Board was entitled to weigh and credit that testimony," citing Elbit Sys. of Am., LLC v. Thales Visionix, Inc., 881 F.3d 1354, 1358 (Fed. Cir. 2018); Inwood Labs., Inc. v. Ives Labs., Inc., 456 U.S. 844, 856 (1982); and Yorkey v. Diab, 601 F.3d 1279, 1284 (Fed. Cir. 2010).  Under the substantial evidence standard, the panel held that the Board's determination was "such that a reasonable mind might accept as adequate to support the Board's conclusion," citing Fleming v. Escort Inc., 774 F.3d 1371, 1375 (Fed. Cir. 2014).

The panel also rejected Wilson's other arguments, that the expert witness testimony was extrinsic evidence, stating that "[e]xtrinsic evidence may be used to interpret the allegedly anticipating reference and to shed light on what it would have meant to a person of ordinary skill in the art," citing Monsanto Tech. LLC v. E.I. DuPont de Nemours & Co., 878 F.3d 1336, 1345 (Fed. Cir. 2018) (citing In re Baxter Travenol Labs., 952 F.2d 388, 390 (Fed. Cir. 1991)).  The panel held that the expert's testimony was consistent with the disclosure in the Toner reference and did not "provide missing disclosure of the claimed invention."  In like manner, the panel rejected Wilson's arguments regarding differences between "air" as disclosed in the Toner reference and "ambient gas" recited in its claims, based on its previous rejection of Wilson's argument (reiterated here) that Toner required a gas tank, and again in reliance on Martin's expert declarations.

Turning to the question of judicial estoppel (that "where a party successfully urges a particular position in a legal proceeding, it is estopped from taking a contrary position in a subsequent proceeding where its interests have changed," citing Data Gen. Corp. v. Johnson, 78 F.3d 1556, 1565 (Fed. Cir. 1996) (citing Davis v. Wakelee, 156 U.S. 680, 689 (1895)), the panel states that the Board has the authority to apply the doctrine.  The opinion then sets forth the factors to be considered in deciding to apply judicial estoppel:

(1) whether a party's later position is "clearly inconsistent" with its earlier position; (2) whether a court has accepted the party's prior position, such that accepting its "inconsistent position in a later proceeding would create the perception that either the first or the second court was misled"; and (3) whether the party changing its position "would derive an unfair advantage or impose an unfair detriment on the opposing party if not estopped,"

citing New Hampshire v. Maine, 532 U.S. 742, 751 (2001).  The standard of review for this Board determination is abuse of discretion (an even more deferential standard) and the Federal Circuit held that the Board's decision here satisfied those criteria.  The opinion notes two distinctions in support of its decision.  The first is that the purported arguments made in the related prosecution were made regarding an embodiment of the Toner invention different from the ones at issue here (specifically, Figure 8b, rather than Figure 8a which the Board relied upon here).  The purportedly inconsistent argument is based, according to the opinion, on the different configuration of the two embodiments and are thus not inconsistent and do not raise the estoppel.  The second basis for finding no abuse of discretion is that "Martin's current position is not clearly inconsistent with Corning's prior statements because those statements were made in a different context and were part of a different evidentiary record," specifically that the claims in the earlier, related patent were directed to the structural components of the apparatus rather than methods for culturing cells with it.  Indeed, according to the panel opinion the claims of this earlier patent did not recite the "ambient gas" limitation.  Finally, the Court held that the differences in context between ex parte examination and the interference here (specifically the expert testimony) was sufficient to support the conclusion that the Board did not abuse its discretion.

Of course, anyone familiar with interference practice will recognize that a finding of anticipation of one party's claims in interference will usually result in the moving party's claims also being held to be anticipated, and that is the final conclusion in the opinion, i.e., all claims in interference were held anticipated by the Toner reference.  The Federal Circuit, at least, awarded Martin its costs.

Wilson v. Martin (Fed. Cir. 2019)
Nonprecedential disposition
Panel: Chief Judge Prost and Circuit Judges Reyna and Stoll
Opinion by Circuit Judge Reyna

Quest USA Corp. v. PopSockets LLC (PTAB 2019)

Functional Language in Device Claim Ignored for Patentability Purposes

By Joseph Herndon --

The U.S. Patent and Trademark Office Patent Trial and Appeal Board recently issued a decision indicating that certain claims of a patent directed to the popular PopSockets are invalid.  In Quest USA Corp. (Petitioner) v. PopSockets LLC (Patent Owner) (Case IPR2018-00497), the PTAB determined that Quest showed, by a preponderance of the evidence, that claims 9–11, 16, and 17 ("challenged claims") of U.S. Patent No. 8,560,031 are unpatentable.

Quest filed a Petition for inter partes review of claims 9–11, 16, and 17 of the '031 patent based on the five different grounds.  Only one is discussed below—namely, claims 9–11, 16, and 17 as being anticipated by UK Patent Application GB 2 316 263 (Grinfas).

The '031 Patent

The '031 patent, entitled "Extending Socket for Portable Media Player," was filed on February 23, 2012.  The '031 patent specification describes extending sockets for attaching to the back of a portable media player or media player case.

Figure 3A illustrates a preferred embodiment of the socket in an accordion shape in its expanded configuration.

Of the challenged claims, claims 9 and 16 are independent, and claim 9 is representative and reproduced below.

9.  A socket for attaching to a portable media player or to a portable media player case, comprising:
    a securing element for attaching the socket to the back of the portable media player or portable media player case; and
    an accordion forming a tapered shape connected to the securing element, the accordion capable of extending outward generally along its [axis] from the portable media player and retracting back toward the portable media player by collapsing generally along its axis; and
    a foot disposed at the distal end of the accordion.

Overview of Grinfas

Grinfas relates to a collapsible sound conduit for attaching to a cellular telephone earpiece.  Grinfas states that a concern had arisen regarding the safety of users of portable hand-held cellular telephones, namely with regard to radiation emitted by such telephones.  To address such concern, Grinfas discloses a collapsible sound conduit placed between the telephone's earpiece and the user's ear, for enabling a user to maintain the telephone at a spaced distance away from the user's head to reduce radiation exposure while nevertheless maintaining an acceptable level of hearing.

Grinfas discloses that the collapsible sound conduit can be "attached to either the telephone or the carrying case," by bonding or fastening.

Figure 2 of Grinfas (shown below), shows an example of the collapsible sound conduit in use.  Figure 3 of Grinfas (shown below) shows a cellular telephone 40 and collapsible sound conduit 42, wherein conduit 42 includes adhesive pad 46 for bonding the conduit to earpiece 44 of telephone 40.

Petitioner identified the collapsible sound conduit as the asserted socket for attaching to a portable media player or portable media player case.

Patent Owner disputed Petitioner's assertions that Grinfas discloses "a securing element" and "an accordion," as those terms are used in the claim.

The Board found that with regard to the recitation in claim 9 that the socket comprises "a securing element for attaching the socket to the back of the portable media player or portable media player case" ("securing element limitation"), there is no genuine dispute that Grinfas discloses the recited structure, namely "a securing element."  However, the parties disputed whether the remaining language, "for attaching the socket to the back of the portable media player or portable media player case," recites 1) functional language that must be given patentable weight, or 2) an intended use that is not limiting.

As the Patent Owner pointed out, Grinfas describes attaching the collapsible sound conduit to the front of the telephone, whereas claim 9 recites a securing element for attaching the socket to the back of a portable media player.

The Board pointed to a number of Federal Circuit decisions, in which the Court stated that in an apparatus claim, "choosing to define an element functionally, i.e., by what it does, carries with it a risk."  This is because it is well settled that the recitation of a new intended use for an old product does not make a claim to that old product patentable.  This finds support from the notion that an apparatus claim covers what a device is, not what a device does.  Thus, "[w]here all structural elements of a claim exist in a prior art product, and that prior art product is capable of satisfying all functional or intended use limitations, the claimed invention is nothing more than an unpatentable new use for an old product."  Bettcher Indus., Inc. v. Bunzl USA, Inc., 661 F.3d 629, 654 (Fed. Cir. 2011).

Thus, the Board found that because Grinfas discloses securing structures that are inherently capable of performing the function of attaching the asserted socket to the back of the portable media player, it has supporting disclosure for the limitation "a securing element for attaching the socket to the back of the portable media player or portable media player case."

The Patent Owner argued that the issue is not whether Grinfas' securing structures would adhere the conduit to the back of a phone, but rather was whether Grinfas discloses attaching the conduit to the back of a phone.  Therefore, Patent Owner's argument was not about whether Grinfas' securing structures are capable of attaching a conduit to the back of a phone, but rather was about whether Grinfas discloses the function of attaching to the back of a phone.  The Patent Owner argued that an expert declaration failed to provide evidence that the claimed function is necessarily present in Grinfas, and that expert testimony, without (additional) evidence is insufficient to establish inherency.

The Board disagreed that the Petitioner failed to establish inherency.  In particular, the Board disagreed that the Petitioner is required to show that the claimed function is actually performed or must be performed when the full structure is described.

Thus, despite the cited art failing to describe the full use of the structure, as recited in the claim, and also being directed to a clearly different use altogether, it was found to anticipate the claim because the structure in Grinfas was capable of performing the recited use.

As a result, because Grinfas discloses a securing element inherently capable of being attached to the back of a portable media player, the Board found that Grinfas discloses the securing element limitation.  Thus, the Board determined that Petitioner demonstrated, by a preponderance of the evidence, that claim 9 is anticipated by Grinfas.

Panel: Administrative Patent Judges Zado, Kaiser, and Margolies
Final Written Decision by Administrative Patent Judge Zado

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

By Kevin E. Noonan --

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

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

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

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

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

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

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

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

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

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

U.S. Water Services, Inc. v. Novozymes A/S (Fed. Cir. 2019)

By Donald Zuhn --

Earlier this year, in U.S. Water Services, Inc. v. Novozymes A/S, the Federal Circuit reversed a decision by the U.S. District Court for the Western District of Wisconsin, partially granting judgment as a matter of law in favor of Defendants-Appellees Novozymes A/S and Novozymes North America, Inc. that claims 1, 6, and 12 of U.S. Patent No. 8,415,137 and claims 1, 2, 5, 7–9, and 18–20 of U.S. Patent No. 8,609,399 were invalid as inherently anticipated.  In reversing and remanding the District Court, the Federal Circuit determined that Novozymes did not meet its burden at trial of showing that the prior art inherently anticipates the asserted claims.

The dispute between the parties began when Plaintiffs-Appellants U.S. Water Services, Inc. and Roy Johnson filed suit against Novozymes for infringement of the asserted claims of the '137 and '399 patents.  A jury determined that the asserted claims were not inherently anticipated by International Publication No. WO 01/62947 A1 ("Veit").  Novozymes responded by moving for judgment as a matter of law, which the District Court granted, and U.S. Water Services then appealed.

The '137 and '399 patents, which share a common specification as continuations of an earlier-filed application, are directed to methods for reducing the formation of deposits of phytic acid salts and phytates on equipment used during ethanol production.  Representative claim 1 of the '137 patent recites:

1.  A method of reducing formation of insoluble deposits of phytic acid or salts of phytic acid on surfaces in a fuel ethanol-processing equipment, the method comprising:
    adding phytase to an ethanol processing fluid in the equipment containing phytic acid or salts of phytic acid under conditions suitable for converting the insoluble phytic acid or phytic acid salts to soluble products; thereby reducing the formation of deposits of insoluble phytic acid or phytic acid salts on surfaces in the equipment; wherein the equipment in which deposit formation is reduced comprises a beer column, and
    wherein the pH of the ethanol processing fluid in the beer column is 4.5 or higher during production of ethanol.

The opinion notes that phytase is an enzyme that is capable of breaking down phytic acid found in plant material.

Veit describes a process for producing ethanol, and in particular, discloses the addition of phytase during the fermentation step (or a combined or simultaneous fermentation and saccharification step) of ethanol production that may result in the increase in the fermentation and ethanol yields.  In the lone experiment disclosed in Example 1 of Veit, the addition of phytase is shown to improve the fermentation process; the experiment was conducted in a 500 mL bottle in which phytase was added during the pre-saccharification reaction (i.e., prior to fermentation).

At trial, the jury determined that Novozymes had not proven by clear and convincing evidence that Veit anticipates the asserted claims by inherently disclosing the requirement of reducing the formation of insoluble deposits of phytic acid or salts of phytic acid.  The jury also determined that Novozymes infringed the asserted claims, and awarded damages of $7,582,966 to U.S. Water Services.  Novozymes moved for judgment as a matter of law, arguing that Veit inherently anticipates the asserted claims because Example 1 shows that in the absence of any phytate, no deposits of phytate can form.  The District Court granted Novozymes' motion, finding that Veit inherently disclosed using phytase to reduce phytate deposits because Veit's fermentation test expressly disclosed conditions sufficient to break down all the phytic acid present in the ethanol fluid, which would have prevented phytate deposits from forming on ethanol processing equipment.

On appeal, U.S. Water Services argued that the District Court erred because Novozymes failed to show that a rational jury could have found that Example 1 inherently anticipateds the asserted claims since the asserted claims require a reduction of phytate deposits on surfaces on ethanol processing equipment.  The Federal Circuit agreed with U.S. Water Services, finding that:

The District Court erred in ruling as a matter of law that Veit inherently anticipates the Asserted Claims.  The Asserted Claims require the reduction of phytic acid deposits in specific locations of an ethanol plant such as on the "heat transfer equipment" or in the "beer column."  . . .  By contrast, Veit does not disclose any examples using phytase to reduce phytic acid deposits in an ethanol plant, but rather describes in Example 1 an experiment in a laboratory bottle.

In particular, the opinion notes that in Veit, the phytase is not added into fermentation, but rather is added into a saccharification step, which differs from the reaction specified in the asserted claims.  The opinion indicates that "[e]nzymes that may be effective at saccharification's temperatures may be ineffective at the lower temperatures required during fermentation," and therefore concludes that "Veit's addition of phytase at the pre-saccharification stage cannot disclose the reduction of phytic acid deposits on ethanol processing plant equipment as required by the Asserted Claims."  The Federal Circuit also noted that:

[U]nlike the stated limitations for reducing deposits found in the Asserted Claims, Example 1 [of Veit] does not provide any conditions necessary to determine whether any deposit on equipment is formed during the experiment, nor does it provide any specific variables that impact phytase in a way that will always reduce deposits in the plant equipment.

The Federal Circuit therefore determined that there was "substantial evidence to support the jury finding that Example 1 only discloses the possibility of reducing phytic acid concentration below detection levels, which is not legally sufficient to demonstrate inherent anticipation" (emphasis in opinion).  Citing Hansgirg v. Kemmer, 102 F.2d 212, 214 (CCPA 1939), for the proposition that "[i]nherency . . . may not be established by probabilities or possibilities," the Court explained that:

Because Example 1 is silent as to whether its Protocol would reduce phytate fouling in the "beer column" or "heat transfer equipment" and Novozymes did not provide evidence that Example 1 satisfies all the required constraints in the Asserted Claims, Veit does not disclose whether any deposits would have formed when using Example 1's Protocol in a fuel ethanol plant.

The Federal Circuit therefore found that Novozymes did not meet its burden at trial of showing by clear and convincing evidence that Example 1 would always eliminate phytic acid deposits under the conditions required by the asserted claims, that a jury could have reasonably found that Veit does not inherently anticipate the asserted claims, and that the District Court erred in overturning the jury's verdict.  The Federal Circuit thus reversed and remanded the District Court's decision partially granting judgment as a matter of law in favor of Novozymes.

U.S. Water Services, Inc. v. Novozymes A/S (Fed. Cir. 2019)
Nonprecedential disposition
Panel: Circuit Judges Moore, Wallach, and Taranto
Opinion by Circuit Judge Wallach

Intellectual Ventures II, LLC v. Sprint Spectrum, L.P. (E.D. Tex. 2019)

By Donald Zuhn --

In April, in Intellectual Ventures II, LLC v. Sprint Spectrum, L.P., U.S. Magistrate Judge Roy S. Payne of the U.S. District Court for the Eastern District of Texas issued a Report and Recommendation that Defendants' Motion for Partial Summary Judgment that Certain Disputed References are Prior Art should be granted in part and denied in part.  In particular, Judge Payne recommended that summary judgment should be denied for four references (i.e., Hwang, Liebetreu, CATT, and LG) and granted for one reference (i.e., Yang).

In arriving at his recommendation, Judge Payne noted that an important fact question in determining whether a reference qualifies as a printed publication under 35 U.S.C. § 102 is the public accessibility of the reference.  Citing Jazz Pharm., Inc. v. Amneal Pharm., LLC, 895 F.3d 1347 (Fed. Cir. 2018), for the proposition that "[a] reference is considered publicly accessible if it was 'disseminated or otherwise made available to the extent that persons interested and ordinarily skilled in the subject matter or art, exercising reasonable diligence, can locate it,'" Judge Payne pointed out that several factors are used by courts to determine whether a reference was publicly accessible.  Such factors include "how widely circulated the reference was, whether the reference was indexed in a manner that would have made it accessible to interested persons with a reasonable degree of effort, and whether the reference was distributed with a pledge or understanding that the contents would remain confidential"; another factor to be considered is the expertise of the target audience.

Judge Payne addressed the Yang reference first, noting that Plaintiff Intellectual Ventures did not contest the public accessibility of this reference.  Judge Payne therefore concluded that the Yang reference was publicly accessible before the priority date of the asserted patents, and as a result, recommended that Defendants' Motion be granted with respect to this reference.

Judge Payne next turned to the Hwang and Liebetreu references, which the Defendants (except for Nokia) argued were submissions to the March 2004 IEEE 802.16 Working Group Session #30 meeting, were publicly accessible by at least March 15, 2004, and thus qualified as prior art to U.S. Patent No. 8,953,641.  Despite Defendants' argument, however, Judge Payne determined that "fact questions remain as to whether the Hwang and Liebetreu references were publicly accessible before the relevant priority date," since "[b]oth references were filed on a website with somewhere between 4,000 to 10,000 references (by the estimate of the applicable Defendants' own witness) with the references listed primarily in chronological order."  Judge Payne also noted that "the Hwang reference was withdrawn, so it likely was not discussed at the meetings, making it even more difficult for this reference to be found."  Finding that "a question of fact exists as to whether these references were publicly available as it is unclear whether persons interested and ordinarily skilled in the subject matter would be able to locate these references using reasonable diligence," Judge Payne recommended that Defendants' Motion be denied with respect to the Hwang and Liebetreu references.

Finally, Judge Payne addressed the CATT and LG references, which Defendants argued were publicly accessible by at least March 31, 2006, and thus qualified as prior art to U.S. Patent Nos. 8,682,357 and 9,532,330.  Finding that questions of fact remained as to the public accessibility of these references, Judge Payne recommended that Defendants' Motion also be denied with respect to the CATT and LG references.  In support of this recommendation, Judge Payne noted that "[w]hile the references were distributed by email to the working group and then placed on the 3GPP server, it remains unclear whether the references were indexed in a way that would allow persons interested and ordinarily skilled in the subject matter or art, exercising reasonable diligence, to locate the two references."  In response to Defendants' argument that indexing is not a prerequisite to finding that a reference qualifies as a printed publication, Judge Payne stated that "a failure to appropriately index may still create a question of fact as to whether a reference qualifies as a printed publication."  Moreover, Judge Payne noted that Intellectual Ventures' expert asserted that the CATT and LG references were not publicly available, and therefore, he indicated that "this suggests that summary judgment would be inappropriate."

Judge Payne therefore recommended that Defendants' Motion for Partial Summary Judgment that Certain Disputed References are Prior Art should be denied for the Hwang, Liebetreu, CATT, and LG references, and granted for the Yang reference.

Intellectual Ventures II, LLC v. Sprint Spectrum, L.P. (E.D. Tex. 2019)
Report and Recommendation by Magistrate Judge Payne

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

Federal Circuit Reverses Board in Two IPR Decisions

By Joseph Herndon --

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

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

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

The '346 Patent

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

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

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

Claim 1 of the '346 patent recites:

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

IPR Claim Construction

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

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

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

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

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

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

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

IPR Decisions

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

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

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

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

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

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

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

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

In re Qapsule Technologies, Inc. (Fed. Cir. 2019)

By Kevin E. Noonan --

Patent law is known for its several challenges in sufficiently capturing an invention, tangible in form and substance, in words with all their limitations.  Patent law is known for being littered with traps for the unwary.  And patent law is replete with instances where claims are found unpatentable because they can fairly be construed to encompass disclosure in the prior art.  All these features of patent law are present in one form or another in the Federal Circuit's decision handed down today in In re Qapsule Technologies, Inc.

The claims at issue in this appeal from the Patent Trial and Appeal Board (PTAB) decision affirming rejection are represented by rejected claim 1:

1.  A synthetic capsule construct for providing a protected chemical milieu, the construct comprising:
    a shell having a plurality of shell proteins, said plurality of shell proteins being assembled with one another for forming said shell and defining an enclosure therein, each of said shell proteins, when assembled for forming said shell, having an interior surface facing inwardly toward said enclosure and an exterior surface facing outwardly away from said enclosure, said shell serving to restrict permeability to and from said enclosure for providing the protected chemical milieu therein, said shell proteins being recombinant;
    a cargo protein, said cargo protein being recombinant and optionally including a peptide tag; and
    a bifunctional polynucleotide having both a first aptameric activity for binding said cargo protein and a second aptameric activity for retaining said bifunctional polynucleotide within said enclosure by assembly with the interior surface of said shell protein,
    said bifunctional polynucleotide being non-naturally occurring; said bifunctional polynucleotide serving to link said cargo protein within said enclosure for providing the said cargo protein with the protected chemical milieu therein.

(Where the bold, italicized terms are identified in the Court's opinion as being relevant to the issues discussed therein.)

Procedurally before the Board Applicants overcame grounds of rejection under §§ 102 and 103 over references not discussed in the opinion, but (improvidently, as it turned out) when faced with new grounds of rejection from the PTAB decided not to reopen prosecution but to request rehearing under 37 C.F.R. § 41.50(B)(2).  When that proved unavailing this appeal followed.  The new grounds of rejection disclosed the following:

which the discerning will recognized to be an influenza virus (a recombinant one, as it turns out).  The Board was able to map the limitations in the claims to this structure (wherein the M1 protein is a "shell protein," mutated viral protein PB1 satisfied the "cargo protein" limitation, and the interaction between the viral RNA and both the M1 protein and PB1 protein as part of the "mutated" (and thus "non-naturally occurring") viral RNPs constituted the "bifunctional polynucleotide" limitation.  Finally, the Board rejected Applicant's argument that the reference did not disclose "recombinant" proteins as an attempt to impose a process limitation (how the proteins were made) on a product claim.  Having found all the recited elements disclosed in this recombinant influenza virus, the Board affirmed its own determination that the Perez reference "inherently" anticipated the claimed invention.

The Federal Circuit affirmed, in an opinion by Judge Newman joined by Judges Chen and Stoll.  The panel recognized that Applicant had the burden to overcome the deference the Federal Circuit is compelled to give the PTO on fact questions (such as anticipation) and accordingly found that the Board had adduced sufficient evidence to support its rejection of these claims under § 102.  Specifically, the Court rejected several distinctions drawn by Applicant because they were not affirmatively recited (despite being negative limitations).  For example, to Applicant's argument that viral assembly as disclosed in the cited art requires viral ribonucleoproteins (RNPs), the Court notes that the claims recite that the claimed synthetic capsule construct "comprises" the recited elements (and in other limitations recites the open claim language "having") and thus does not exclude embodiments that include such RNPs.  Accordingly, "it does not affect the Board's ground of rejection that Qapsule has purportedly created a capsule that will assemble in the presence of only a shell protein, cargo protein, and bifunctional polynucleotide, . . . for representative claim 1 is not so limited," and the panel held that the Board's conclusion was supported by substantial evidence.  Similarly, the Court found unpersuasive other aspects of the recombinant influenza virus disclosed in the Perez reference not recited in the rejected claims (the viral lipid envelope, the other proteins comprising the virus) using the same reasoning, as well as arguments related to the different functions of the claimed construct and the prior art virus.  These distinctions did not persuade the panel because "unclaimed functional distinctions or uses are insufficient to overcome anticipation," and, in the only faint glimmer of hope provided to Qapsule in the opinion, "[i]t is not before us to decide whether further specificity in the claims might distinguish these references."

It is not without some irony that the specification recites a great number of sources of shell and capsid proteins and viruses that produce them:

• [0008] Another preferred embodiment selects the shell protein from a group consisting of capsid proteins, coat proteins, and envelope proteins. In particular, the shell protein may be Qβ capsid protein; alternatively, the shell protein may be of a type derived from a single-stranded RNA virus, for example, icosahedral virus, bromovirus, comoviruses, nodavirus, picornavirus, tombusviruses, levivirus, or tymovirus. In another preferred embodiment, the shell protein is of a type derived from a double-stranded RNA virus, for example, birnavirus and reovirus. In another preferred embodiment, the shell protein is of a type derived from a double-stranded DNA virus, for example, parvovirus, microvirus, podovirus, or polyomavirus.

• [0083] However, capsid proteins from other bacteriophages and viruses may be employed assembling synthetic capsule constructs. The bifunctional polynucleotide employed with an alternative capsid protein employs an aptamer obtained from or adapted to assemble with such virus or bacteriophage shell proteins. Bifunctional polynucleotide employable with capsids from single-stranded RNA viruses and bacteriophages are single-stranded RNA. Exemplary single-stranded RNA viruses having assemblable shell proteins employable with the present invention are as follows

• [0084] Non-icosahedral viruses (rod-shaped or other shapes) tobacco mosaic virus.
• [0085] Bromoviruses: alfalfa mosaic virus, brome mosaic virus, cowpea chlorotic mottle virus, cucumber mosaic virus, tomato aspermy virus.

• [0086] Comoviruses: bean pod mottle virus, cowpea mosaic virus, tobacco ringspot virus.
• [0087] Nodaviruses: black beetle virus, pariacoto virus.
• [0088] Picornaviruses: coxsackievirus, echovirus, foot and mouth disease virus, rhinovirus 14, poliovirus.
• [0089] Tombusviruses: artichoke mottled crinkle virus, red clover necrotic mosaic virus, tomato bushy stunt virus.
• [0090] Leviviruses: bacteriophages MS2, FR, GA, PP7.
• [0091] Tymoviruses: physalis mottle virus, desmodium yellow mottle virus, turnip yellow mosaic virus.

• [0092] Shell proteins from virus particles that package double-stranded RNA can also be employed. However, their bifunctional polynucleotides will employ a single-stranded aptamer to bind/assemble with shell proteins. Exemplary double-stranded RNA viruses having assemblable shell proteins employable with the present invention are as follows:

• [0093] Birnaviruses: infectious pancreatic necrosis virus, infectious bursal disease virus.
• [0094] Reoviruses: reovirus, rice dwarf virus.

• [0095] Shell proteins from virus particles that package DNA can also be employed. These are constructed in the same way, by expression in cells using plasmids that drive the synthesis of both the shell protein and pieces of DNA (usually single-stranded) that associate with the protein and get packaged inside. Exemplary DNA viruses having assemblable shell proteins employable with the present invention are as follows:

• [0096] Parvoviruses: adeno-associated virus, canine parvovirus, feline panleukopenia virus, porcine parvovirus.
• [0097] Microviruses: bacteriophages phi-x 174, G4, alpha-3.
• [0098] Podoviruses: bacteriophages P22, T7, epsilon 15.
• [0099]Polyomavirus: SV40, Murine polyomavirus, Merkel cell virus.

And yet influenza virus (indeed, any paramyxovirus) is not disclosed.  It is possible that Qapsule will pursue claims having a scope that can better differentiate claimed embodiments supported by its disclosure from prior art recombinant virus, if only for claims withdrawn pursuant to a restriction requirement.  But the procedural history of this case and the PTAB's and Federal Circuit's decisions on the merits provide yet another cautionary tale of the difficulties and uncertainties occasioned by the patenting process.

In re Qapsule Technologies, Inc. (Fed. Cir. 2019)
Nonprecedential disposition
Panel: Circuit Judges Newman, Chen, and Stoll
Opinion by Circuit Judge Newman

Barry v. Medtronic, Inc. (Fed. Cir. 2019)

By Kevin E. Noonan --

Elevation to Chief Judge in a U.S. Court of Appeals, particularly in the Federal Circuit, is frequently accompanied by an apparent mandate to place an imprimatur on the Court's decisions.  This pattern has been shown consistently in this appellate court, from Chief Judge Markey through Chief Judges Michel and Rader.  Now it is Chief Judge Prost's turn, as illustrated by her decision in Amgen v. Sanofi, overturning application of the written description precedent of Noelle v. Ledermann as being inconsistent with the Court's en banc opinion in Ariad v. Eli Lilly & Co. This week she did not prevail in convincing her brethren of the correctness of her opinion and thus provided a dissent, in Barry v. Medtronic, Inc., relating to the application of the public use and on-sale bars to patentability and its relationship to the experimental use exception to applying these bars.

The case arose in patent infringement litigation by Dr. Mark Barry, a sole inventor, for infringement by Medtronic of his invention as claimed in U.S. Patent Nos. 7,760,358 and 8,361,121.  The invention was directed to a device and method for correcting spinal column deviation conditions; claims 4 and 5 of the '358 patent asserted in the litigation depend from independent claim 1:

1.  A method for aligning vertebrae in the amelioration of aberrant spinal column deviation conditions comprising the steps of:
    selecting a first set of pedicle screws, said pedicle screws each having a threaded shank segment and a head segment;
    selecting a first pedicle screw cluster derotation tool, said first pedicle screw cluster derotation tool having first handle means and a first group of pedicle screw engagement members which are mechanically linked with said first handle means, each pedicle screw engagement member being configured for engaging with, and transmitting manipulative forces applied to said first handle means to said head segment of each pedicle screw of said first set of pedicle screws,
    implanting each pedicle screw in a pedicle region of each of a first group of multiple vertebrae of a spinal column which exhibits an aberrant spinal column deviation condition;
    engaging each pedicle screw engagement member respectively with said head segment of each pedicle screw of said first set of pedicle screws; and
    applying manipulative force to said first handle means in a manner for simultaneously engaging said first group of pedicle screw engagement members and first set of pedicle screws and thereby in a single motion simultaneously rotating said vertebrae of said first group of multiple vertebrae in which said pedicle screws are implanted to achieve an amelioration of an aberrant spinal column deviation condition;
    selecting a first length of a spinal rod member; wherein one or more of said pedicle screws of said first set of pedicle screws each includes:
        a spinal rod conduit formed substantially transverse of the length of said pedicle screw and sized and shaped for receiving passage of said spinal rod member therethrough; and
        spinal rod engagement means for securing said pedicle screw and said spinal rod member, when extending through said spinal rod conduit, in a substantially fixed relative position and orientation;
    extending said first length of said spinal rod member through said spinal rod conduits of one or more of said pedicle screws of said first set of pedicle screws; and
    after applying said manipulative force to said first handle means, actuating said spinal rod engagement means to secure said vertebrae in their respective and relative positions and orientations as achieved through application of said manipulative force thereto.

Further limitations add a step "requiring a second set of pedicle screws and a second derotation tool with a second group of engagement members and a second 'handle means'" (claim 2); and steps requiring a second handle rod (claim 3): steps for applying a "manipulative force" to the first and second handle means, carried out substantially simultaneously to cooperatively achieve an amelioration of an aberrant spinal column deviation condition" in claim 4, dependent on claim 3); and claim 5 dependent on claim 2.  Claims 2-4 of the '121 patent are directed to "systems":

2.  A system for aligning vertebrae in the amelioration of aberrant spinal column deviation conditions comprising:
    a first set of pedicle screws, each pedicle screw having a threaded shank segment and a head segment; and
    a first pedicle screw cluster derotation tool, said first pedicle screw cluster derotation tool having a first handle means for facilitating simultaneous application of manipulative forces to said first set of pedicle screws and a first group of three or more pedicle screw engagement members which are mechanically linked with said first handle means, said first handle means having a handle linked to each pedicle screw engagement member of the first group of three or more pedicle screw engagement members and a linking member to join together the handles linked to the pedicle screw engagement members, wherein the handle means is configured to move simultaneously each pedicle screw engagement member; wherein each pedicle screw engagement member is configured to en- gage respectively with said head segment of each pedicle screw of said first set of pedicle screws; and wherein each pedicle screw engagement member is configured to transmit manipulative forces applied to said first handle means to said head segment of each pedicle screw of said first set of pedicle screws;
    a second set of pedicle screws, each pedicle screw having a threaded shank segment and a head segment;
    a second pedicle screw cluster derotation tool, said second pedicle screw cluster derotation tool having a second handle means for facilitating simultaneous application of manipulative forces to said second set of pedicle screws and a second group of three or more pedicle screw engagement members which are mechanically linked with said second handle means, said second handle means having a handle linked to each pedicle screw engagement member of the second group of three or more pedicle screw engagement members and a handle linking member to join together the handles linked to the pedicle screw engagement members, wherein the handle means is configured to move simultaneously each pedicle screw engagement member; wherein each pedicle screw engagement member is configured to engage respectively with said head segment of each pedicle screw of said second set of pedicle screws; and wherein each pedicle screw engagement member is configured to transmit manipulative forces applied to said second handle means to said head segment of each pedicle screw of said second set of pedicle screws;
    a cross-linking member that links the first handle means to the second handle means . . . .

The cross-linking member element in the '121 patent was distinguished as an advance to the claims of the '358 patent.

The history of the invention and how it was disclosed and ultimately protected by patent forms the predicate facts for the dispute on appeal.  Named inventor Barry, an orthopedic surgeon, began development of his invention while working with a sales representative for DePuy, a medical device company.  During this time he also discussed his ideas with a representative from another medical device company, SpineVision.  After developing the tool, Dr. Barry used it in three back surgeries performed over a three-month period on patients having "the three most common types of scoliosis-caused spinal deviation conditions that surgeons typically see."  After a three-month post-operative convalescence for the last of these patients, Dr. Barry prepared an abstract for presentation at a scientific meeting and within one year filed a patent application that eventually matured into the patents-in-suit.  These activities were thus within the one-year grace period applied under 35 U.S.C. § 102(b) prior to amendment of the Patent Act under the Leahy-Smith America Invents Act.

Following introduction of an infringing product by Medtronic, Barry sued and a jury found in his favor and awarded $15,095,970 for infringement of the '358 patent and $2,625,210 for infringement of the '121 patent; each of these amounts was increased by 20% by the trial court.  The jury rejected Medtronic's defenses of public use, on-sale, and prior invention.  This appeal followed, involving Medtronic's defenses of invalidity under § 102(b) and § 102(g), inequitable conduct, induced infringement, and damages.

The Federal Circuit affirmed, in a decision by Judge Taranto joined by Judge Moore; Chief Judge Prost provided a strong dissent (in part) regarding the public use and on-sale bar defenses.  On the public use defense, the majority first recited the standard, that the invention must have been in public use and "ready for patenting" more than one year before a patent's filing date.  The Court majority found that the invention was not "ready for patenting" based on Dr. Barry's testimony that he did not know that the claimed method and system had worked for their intended purpose until after the results of the third patient surgery could be evaluated three months after the surgery.  The panel majority also found that Dr. Barry's use, while not burdened by explicit confidentiality agreements with the patient or surgical staff and (on facts persuasive to Chief Judge Prost in dissent) fully paid for by the patient at Dr. Barry's "customary rates," was negated by the character of the use as experimental use, which "serve[d] as a negation of the statutory bars," citing Polara Eng'g Inc v. Campbell Co., 894 F.3d 1339, 1348 (Fed. Cir. 2018).  The majority affirmed in part based on the standard of review, wherein Judges Taranto and Moore found substantial evidence for the jury's finding that the claimed invention was not "ready for patenting" prior to the critical date.  Specifically, "there is substantial evidence that Dr. Barry's invention was not ready for patenting until January 2004 because the final follow-up from the October surgery was reasonably needed for the determination that the invention worked for its intended purpose," according to the panel majority.

The majority held that Medtronic had not satisfied its burden of showing that the claimed invention had been reduced to practice, i.e., that he had "(1) constructed an embodiment or performed a process that met all the limitations and (2) determined that the invention would work for its intended purpose," citing In re Omeprazole Patent Litig., 536 F.3d 1361, 1373 (Fed. Cir. 2008).  Prong two of this test made evidence of satisfaction of prong one insufficient (including, inter alia, evidence of prior drawings of the invention disclosed by Dr. Barry to third parties).  Here, the panel majority held that the jury was reasonable in concluding that the invention had not been shown to "work for its intended purpose" until after completion and followup of surgeries on three patients "who fairly reflected the real-world range of application of the inventive method" (based on evidence and testimony from both plaintiff and defendant's witnesses).  And the panel further rejected any requirements in the claims for reciting the "intended purpose," based on conventional claim drafting standards ("one typical way of claiming is simply to define the physical steps of the process, or the physical elements of a product, without building functional or purpose language into the claim limitations at all," citing In re Schreiber, 128 F.3d 1473, 1478 (Fed. Cir. 1997)), as well as Supreme Court (Corona Cord Tire Co. v. Dovan Chemical Corp., 276 U.S. 358, 383 (1928)) and the Federal Circuit's own precedent (TP Laboratories, Inc. v. Professional Positioners, Inc., 724 F.2d 965 (Fed. Cir. 1984); Manville Sales Corp. v. Paramount Sys., Inc., 917 F.2d 544, 549 (Fed. Cir. 1990); Honeywell Int'l Inc. v. Universal Avionics Systems Corp., 488 F.3d 982 (Fed. Cir. 2007); Polara Eng'g Inc v. Campbell Co., 894 F.3d 1339, 1348 (Fed. Cir. 2018)).

The panel majority also held that Medtronic had not established that the invention was in public use prior to the critical date, and in any event its use fell within the experimental use exception.  This conclusion was based on the following facts:  Dr. Barry was the only person to perform the surgeries, and thus had not "relinquished control of his invention" (Egbert v. Lippmann, 104 U.S. 333, 335 (1881)); the evidence showed that the people present in the operating theater did not have a clear view of the operation; and that these people were all bound by at least an implied duty of confidentiality.  Regarding commercial exploitation, while the panel majority acknowledged Dr. Barry's compensation, it rejected the conclusion that this amounted to commercial exploitation sufficient to amount to public use.  This conclusion was based on Dr. Barry's activities satisfying the standards for experimental use as set forth, inter alia, in Clock Spring, L.P. v. Wrapmaster, Inc., 560 F.3d 1317, 1327 (Fed. Cir. 2009):

(1) the necessity for public testing, (2) the amount of control over the experiment retained by the inventor, (3) the nature of the invention, (4) the length of the test period, (5) whether payment was made, (6) whether there was a secrecy obligation, (7) whether records of the experiment were kept, (8) who conducted the experiment, (9) the degree of commercial exploitation during testing, (10) whether the invention reasonably requires evaluation under actual conditions of use, (11) whether testing was systematically performed, (12) whether the inventor continually monitored the invention during testing, and (13) the nature of contacts made with potential customers.

Finally, the panel majority distinguished two earlier cases where experimental use was not found (Sinskey v. Pharmacia Ophthalmics, Inc., 982 F.2d 494 (Fed. Cir. 1992), and LaBounty Mfg., Inc. v. U.S. Int'l Trade Comm'n, 958 F.2d 1066, 1072 (Fed. Cir. 1992)) on their facts (including non-relinquishment of the invention and that other members of the surgical team were aware that the use was experimental).

Turning to the on-sale bar, the panel majority held that their finding that Dr. Barry's use was an experimental use negated the on-sale bar as it had the public use bar, and applied its reasoning for the public use question to decide that the invention was not "ready for patenting" and thus did not satisfy the second prong of the test enunciated by the Supreme Court in Pfaff v. Wells Elecs., Inc., 525 U.S. 55, 67 (1998).  The panel majority upheld the jury's determination that the '358 and '121 patents were not invalid under § 102(b) on this basis (as well as rejecting Medtronic's' objection to jury instructions regarding what constituted "experimental use").

Finally, the panel majority affirmed the jury's determination that the asserted claims were not invalid under § 102(g) because Medtronic failed to establish earlier invention by another, and affirmed the District Court's decision that Dr. Barry had not engaged in inequitable conduct (based on an erroneous description of a Figure in the common patent specifications) because there was no evidence of an intent to deceive.  And the majority found "substantial evidence" that Medtronic induced infringement of the surgeons using its infringing systems and methods.

Chief Judge Prost's dissent was predicated on her view that the panel majority had misapplied the law regarding both the public use and on-sale bars under pre-AIA § 102(b); her disagreement was limited to the panel majority's decision regarding the '358 patent.  For Chief Judge Prost "the facts are simple":

More than one year before filing for the '358 patent, Dr. Barry successfully performed his claimed surgical method on three different patients, charging each his normal fee.  Dr. Barry's method was thus prima facie "on sale" or in "public use" before the critical date under 35 U.S.C. § 102(b).

And the crux of her argument is that Dr. Barry's self-serving testimony (that he did not appreciate that his claimed method worked as intended until three months after the last of the three surgeries) was inconsistent with his appreciation, as a surgeon, that "his method worked as of a surgery's completion."  She focuses her argument (as she understands is the dispositive issue) on the "ready for patenting" prong.  (In a footnote she also states that she "see[s] no material difference between the two bars in this case or in the way that evidence of experimental use would affect their application.)  For Chief Judge Prost, Dr. Barry's practice of the three surgeries for his usual fee establishes that the invention claimed in the '358 patent was on sale prior to the critical date, and that only evidence of experimental use can negate this conclusion.  She is convinced that the invention was reduced to practice by at least the completion date of the second surgery, which was also prior to the critical date.  Thus, Chief Judge Prost's view of the evidence is that Medtronic established invalidity as a matter of law under the on-sale bar.

The basis for her disagreement with her brethren ultimately rests on her belief that the claimed method was reduced to practice as soon as Dr. Barry achieved correction of the spinal abnormalities on the surgical table and her rejection of the evidence that he could only appreciate reduction to practice after sufficient patient convalescence had occurred for him to conclude that the surgical adjustment had sufficient permanence to satisfy the criterion of "ameliorating" the abnormality as recited in the asserted claims.

Part of the Chief Judge's disagreement also rests on her determination that Dr. Barry's invention was "ready for patenting" after the second surgery, because he had shown that the spinal deformity could be surgically corrected in two patients (and thus established that the method was of general utility).  She writes:

There was at least some amelioration of those conditions by the end of the surgeries.  At this point, Dr. Barry could have satisfied the enablement and written-description requirements of § 112 and credibly claimed utility under § 101.

She cites Alcon Research Ltd. v. Barr Labs., Inc., 745 F.3d 1180, 1189–90 (Fed. Cir. 2014), for the principles that "a patent does not need to guarantee that the invention works for a claim to be enabled" and that "[t]here is no requirement that the disclosure contain either examples or an actual reduction to practice."  Chief Judge Prost finds error in the majority's conclusions because it focused on reduction to practice rather than whether the invention was ready for patenting, a broader palate that she believes was satisfied on the facts below.  She identifies the error on the majority's conception of what the "intended purpose" of this invention was and finds prior case law "regrettably, confusing" and that "threatens to render superfluous a substantial body of law starting with the Supreme Court's seminal City of Elizabeth case."  As explicated in her dissent, Chief Judge Prost contends that the intended purpose was the narrow one of repositioning the spine to correct a deformity (rather than achieving a result that "cured" the patient of the symptoms of having the deformity).  She finds no support for this outcome (cure) in the specification or claims (although it is reasonable to presume that an inventive method that did not achieve this outcome would fail to satisfy at least the utility requirements of § 101).  While she acknowledges that the majority identify a "common-sense approach to identifying the intended purpose [that] is rooted in the preamble claim language as well as the specification," she asserts that she is "unpersuaded" because concepts like follow-up time are not found in the claims or specification of the '358 patent.

The question of whether an invention is reduced to practice would appear to be one fraught with an understanding of how that phrase would be interpreted by one having ordinary skill in the art.  And while the ultimate question of reduction to practice is a legal one, it is based on such significant underlying factual determinations that the substantial evidence standard would in most cases make it difficult for a court (on post-trial motions) or reviewing court on appeal to overturn a jury's fact findings.  But this is the root of what Chief Judge Prost seems to be arguing in setting out her position.  Her doctrinal analysis is focused on these differences between being "ready for patenting" and "reduced to practice."

For the experimental use exception she recites ancient decisions, notably Smith & Griggs Manufacturing Co. v. Sprague, 123 U.S. 249, 264 (1887), for the principle that the patentee, once either bar has been established, has the burden of establishing experimental use by clear and convincing evidence.  Having found on the facts below that Medtronic established both prongs of the on-sale bar had been satisfied, it is unsurprising that she also considers inadequate Dr. Barry's evidence supporting experimental use.  More importantly, Chief Judge Prost identifies copious Federal Circuit precedent she believes improperly fails to recognize the heightened burden her understanding of precedent imposes on a patentee wanting to establish the experimental use exception.  And the evidence adduced and credited by the District Court and panel majority in her view lacks objectivity, being limited to the inventor's "after-the-fact, litigation-inspired testimony."  At least some of her criticism of this testimony and evidence has a "damned if you do damned if you don't" flavor:

I cannot see how charging one's normal fee makes the sale look like anything other than a normal sale.  Had Dr. Barry charged a premium, a claim of experimental purpose would be difficult to maintain.  Had he charged less, it might suggest experimental purpose—or it might not [citations omitted].

The case has the usual amount of sniping, in footnotes, between the majority and the dissent.  One such statement, however, encapsulates the basic grounds for disagreement between the two opinions (or at least the reasoning underlying them):

The dissent proposes several changes to the legal standards stated in governing case law, such as a change to impose a (high) burden of persuasion on the patent owner to establish experimental use.  Medtronic has not argued for such changes.  We follow existing case law.

Unrecorded but not out of the question would be a simple repost from the Chief Judge:  "For now."  Having already revised how the written description requirement is applied to antibodies in Amgen v. Sanofi, the only question seems to be whether Chief Judge Prost will have a case that gives her an opportunity to revise the on-sale and public use bars in accordance with the principles and reasoning set out in her dissent.

Barry v. Medtronic, Inc. (Fed. Cir. 2019)
Panel:  Chief Judge Prost and Circuit JudgesMoore and Taranto
Opinion by Circuit Judge Taranto; dissenting in part opinion by Chief Judge Prost

Helsinn Healthcare S. A. v. Teva Pharmaceuticals USA, Inc. (2019)

By Kevin E. Noonan --

"Pigs fly!"  "Hell has frozen over!"  Or less dramatically, "Supreme Court affirms Federal Circuit decision!" all would be apt subtitles for any article discussing the Supreme Court's decision today in Helsinn v. Teva.  The question before the Court was whether Congress intended by passing the Smith-Leahy America Invents Act (AIA) to change the status of "secret" sales so as not to trigger the on-sale bar of revised Section 102 by adding the phrase "or otherwise known to the public" (the Federal Circuit held it had not done so, at least not effectively).  The Supreme Court agreed.

The decision is short (9 pages, with the legal basis of the Court's opinion starting at page 5), unanimous (9-0), handed down less than seven weeks after oral argument, and authored by Justice Thomas, who often writes patent law decisions that are not particularly contentious or for which one Justice does not have a particular interest.  By way of reminder regarding the factual predicate of the case, it arose over ANDA litigation regarding Teva's intention to market a generic version of Helsinn's intravenous formulations of palonosetron used to reduce chemotherapy-induced nausea and vomiting ("CINV").  There were four patents-in-suit:  U.S. Patent Nos. 7,947,724, 7,947,725, 7,960,424, and 8,598,219; only the '219 patent was allowed and granted under the AIA changes in U.S. patent law.

A prior art patent (U.S. Patent No. 5,202,333) taught that palonosetron was useful for treating CINV; the patents-in-suit were directed to novel formulations comprising "unexpectedly low concentrations of palonosetron."  Claim 2 of the '725 patent is representative of the pre-AIA patents-in-suit:

2.  A pharmaceutically stable solution for reducing emesis or reducing the likelihood of emesis comprising:
    a)  0.05 mg/mL palonosetron hydrochloride, based on the weight of the free base, in a sterile injectable aqueous carrier at a pH of from 4.5 to 5.5;
    b)  from 0.005 mg/mL to 1.0 mg/mL EDTA; and
    c)  mannitol in an amount sufficient to tonicify said solution, in a concentration of from about 10 mg/ml to about 80 mg/ml.

Claim 1 is representative of the '219 patent (post-AIA):

1.  A pharmaceutical single-use, unit-dose formulation for intravenous administration to a human to reduce the likelihood of cancer chemotherapy- induced nausea and vomiting, comprising a 5 mL sterile aqueous isotonic solution, said solution comprising:
    palonosetron hydrochloride in an amount of 0.25 mg based on the weight of its free base;
    from 0.005 mg/mL to 1.0 mg/mL EDTA; and
    from 10 mg/mL to about 80 mg/mL mannitol,
    wherein said formulation is stable at 24 months when stored at room temperature.

It is undisputed that each asserted claim covers the 0.25 mg dose of palonosetron.  Helsinn entered into a contract for supplying the claimed formulation prior to critical date, but contingent on FDA approval (which was not obtained until after the critical date).

The District Court found a sale or offer for sale prior to the critical date, but that the invention was not ready for patenting with regard to the pre-AIA patents, and that the AIA had changed the on-sale bar to require a public sale or offer for sale.  Although the existence of the agreement and its terms were publicly known, the parties had not disclosed the 0.25 mg palonosetron dose before the critical date.  The District Court thus rejected Teva's invalidity contentions based on the § 102(b) on-sale bar.

The Federal Circuit reversed, in an opinion by Judge Dyk joined by Judges Mayer and Moore.  Using the framework set forth by the Court in Medicines Co. v. Hospira, the panel found that the invention was "on sale" prior to the critical date by applying "the law of contracts as generally understood" and "those activities that would be understood to be commercial sales and offers for sale 'in the commercial community.'"  Under this analysis, the Court had little difficulty deciding that there had been a sale before the critical date.  The contingent nature of FDA approval did not refute this conclusion, the Court saying that commercial practice, exemplified by provisions of the Uniform Commercial Code, contemplate "purported present sale of future goods . . . [which] operates as a contract to sell," UCC § 2– 105(2), and that "[a] contract for sale that includes a condition precedent is a valid and enforceable contract," citing BG Grp., PLC v. Republic of Argentina, 134 S. Ct. 1198, 1207 (2014).  The opinion also cited the Court's own precedent regarding the existence of a sale despite the presence of conditions precedent to commercial transfer of goods, such as Enzo Biochem, Inc. v. Gen-Probe, Inc., 424 F.3d 1276 (Fed. Cir. 2005), and C.R. Bard, Inc. v. M3 Sys., Inc., 157 F.3d 1340 (Fed. Cir. 1998).

The Court also rejected Helsinn's contention that the AIA changed the on-sale bar calculus to limit its application to public sales.  Noting that confidential sales did not per se prevent application of the on-sale bar prior to enactment of the AIA (citing, inter alia, In re Caveney, 761 F.2d 671, 673–74 (Fed. Cir. 1985)), the opinion rejected arguments by Helsinn and amici (including the U.S. government) that the AIA changed the law, which were based almost exclusively on statements from the Congressional record (which were directed not to on-sale activities but to public use).  It did not help Helsinn's argument in this regard that the panel identified Supreme Court precedent directly contrary to their position, i.e., Pennock v. Dialogue, 27 U.S. (2 Pet.) 1, 19 (1829).  Accordingly, the opinion states that "[w]e conclude that, after the AIA, if the existence of the sale is public, the details of the invention need not be publicly disclosed in the terms of sale" and thus invalidity of the '219 patent was not properly determined by the District Court.

With regard to the question of whether the invention claimed in the patents in suit was "ready for patenting" prior to the critical date, the panel decided that it was, based on the invention having been reduced to practice before the critical date.  This decision depended, in part, on the parties' stipulation that "they would contest ready for patenting 'only with respect to the limitations and intended uses of "reducing emesis or reducing the likelihood of emesis" and '"to reduce the likelihood of cancer chemotherapy-induced nausea and vomiting" of the asserted claims' and not "'for any other reason.'"  The panel noted that its case law distinguished the standard needed to show reduction to practice with regard to whether a pharmaceutical invention would work for its intended purpose and the standard for FDA approval of a new drug, citing Scott v. Finney, 34 F.3d 1058, 1063–64 (Fed. Cir. 1994).  Specifically, the standard is that the invention "works for its intended purpose 'beyond a probability of failure' but not 'beyond a possibility of failure.'"  The Federal Circuit found the District Court erred by applying the FDA standard rather than the proper patent standard in making its (erroneous) determination that the invention was not "ready for patenting" before the critical date.  This conclusion was supported by Helsinn's own documents (including portions of the patents' prosecution histories), pre-litigation statements and testimony.  And the opinion noted that, if the standard applied by the District Court was correct, Helsinn could not have filed a valid application prior to the critical date, and "[s]uch a standard would preclude the filing of meritorious patent applications in a wide variety of circumstances."

The Supreme Court granted certiorari to consider the following Question Presented:

Whether, under the Leahy-Smith America Invents Act, an inventor's sale of an invention to a third party that is obligated to keep the invention confidential qualifies as prior art for purposes of determining the patentability of the invention.

The Court recognized that it had "never addressed the precise question presented in this case," but voiced its opinion that "our precedents suggest that a sale or offer of sale need not make an invention available to the public."  The Court based its decision on the well-established principle that, under prior versions of Section 102, held that "secret sales" could trigger the on-sale bar.  These cases were as recent as Pfaff v. Wells Electronics, Inc., 525 U.S. 55, 67 (1998) and as ancient as a trio of 19th Century cases (Consolidated Fruit-Jar Co. v. Wright, 94 U.S. 92, 94 (1877); Smith & Griggs Mfg. Co. v. Sprague, 123 U.S. 249, 257 (1887); Elizabeth v. Pavement Co., 97 U.S. 126, 136 (1878)) (although to be honest these cases stand for the proposition that a sale triggers the bar and not the issue of whether the sale was secret or public).  The opinion credits the Federal Circuit (saying without apparent irony that that Court has 'exclusive jurisdiction' over patent appeals, 28 U.S.C. §1295(a)") with making "explicit what was implicit in our precedent" with regard to the on-sale bar, citing Special Devices, Inc. v. OEA, Inc., 270 F. 3d 1353, 1357 (2001), and Woodland Trust v. Flowertree Nursery, Inc., 148 F. 3d 1368, 1370 (1998), in support of its conclusion.

Based on this various precedent, the Court was able to reach the conclusion that Congress did not change what activities raised the on-sale bar which includes secret sales, because there was insufficient evident of that intent, citing Shapiro v. United States, 335 U.S. 1, 16 (1948).  The Court relied expressly on the Solicitor General's argument that "if 'on sale' had a settled meaning before the AIA was adopted, then adding the phrase 'or otherwise available to the public' to the statute 'would be a fairly oblique way of attempting to overturn' that 'settled body of law.'"  In reaching this conclusion the Court rejected Helsinn's argument, based on the "associated-words canon" of legislative intent and Federal Maritime Comm'n v. Seatrain Lines, Inc., 411 U.S. 726 (1973), and Paroline v. United States, 572 U.S. 434 (2014), that the effect of construing the statute as Teva advanced (and the Court accepted) would read the amended words out of the statute.  The opinion points out that the catch-all phrase "otherwise available to the public" is better interpreted to capture "material that does not fit neatly into the statute's enumerated categories but is nevertheless meant to be covered"; "on-sale" having a defined meaning the Court declines to encompass its proscriptions into what constitutes being on-sale.

The Court also, as is its wont, waxed somewhat philosophical regarding the limitations on Congressional authority for patenting (reproduced here as a sage reminder of the underpinnings of much of the Court's patent jurisprudence):

The United States Constitution authorizes Congress "[t]o promote the Progress of Science and useful Arts, by securing for limited Times to Authors and Inventors the exclusive Right to their respective Writings and Discoveries."  Art. 1, §8, cl. 8.  Under this grant of authority, Congress has crafted a federal patent system that encourages "the creation and disclosure of new, useful, and nonobvious advances in technology and design" by granting inventors "the exclusive right to practice the invention for a period of years."  Bonito Boats, Inc. v. Thunder Craft Boats, Inc., 489 U.S. 141, 151 (1989).

To further the goal of "motivating innovation and enlightenment" while also "avoiding monopolies that unnecessarily stifle competition," Pfaff, 525 U.S., at 63, Congress has imposed several conditions on the "limited opportunity to obtain a property right in an idea," Bonito Boats, supra, at 149.  One such condition is the on-sale bar, which reflects Congress' "reluctance to allow an inventor to remove existing knowledge from public use" by obtaining a patent covering that knowledge. Pfaff, supra, at 64; see also Pennock v. Dialogue, 2 Pet. 1, 19 (1829) (explaining that "it would materially retard the progress of science and the useful arts" to allow an inventor to "sell his invention publicly" and later "take out a patent" and "exclude the public from any farther use than what should be derived under it").

Congressman Lamar Smith, the Chairman of the Committee on the Judiciary of the U.S. House of Representatives during the pendency of the AIA, and the lead sponsor of the bill in the House, filed an amicus brief to the Court explaining Congressional intent, which was unpersuasive to the Court.

The Court's language left the door slightly ajar for a future litigant to distinguish this decision on different facts (for example, where there was no disclosure that the agreement existed, for example); the Court was uncharacteristically cautious in its language ("a commercial sale to a third party who is required to keep the invention confidential may place the invention 'on sale' under the AIA" (emphasis added)).  Congress, if sufficiently aggrieved by the Court's dismissal of Congressman Smith's amicus brief explaining Congressional intent, could decide to include an express provision into the statute overturning this decision.  But it is clear that only something that express will be enough to convince the Court that their own and the Federal Circuit's extensive jurisprudence has in fact been discarded by the changes to U.S. patent law occasioned by passage of the AIA.

Helsinn Healthcare S. A. v. Teva Pharmaceuticals USA, Inc. (2019)
Opinion by Justice Thomas

Top Stories of 2018: #6 to #10

By Donald Zuhn –-

After reflecting upon the events of the past twelve months, Patent Docs presents its 12th annual list of top patent stories.  For 2018, we identified fifteen 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.  Yesterday, we counted down stories #15 to #11, and today we count down stories #10 to #6 as we work our way towards the top five stories of 2018.  As with our other lists (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 2018" on January 16, 2019 from 10:00 am to 11:15 am (CT).  Details regarding the webinar, which will focus on a handful of the most important stories on this year's list, can be found here.

10.  Does Unsettled § 101 Jurisprudence Preclude Attorneys' Fees

In December, in SAP America, Inc. v. InvestPic, LLC, the Northern District of Texas awarded $679,420.46 in attorneys' fees to SAP America after the Federal Circuit affirmed an earlier decision of the District Court finding InvestPic's '291 patent invalid under 35 U.S.C. § 101.  SAP America was successful in its attempt to obtain attorney's fees based on a supposedly weak litigating position under § 101.  However, since Alice v. CLS Bank, just about any patent involving software or a business method can have its validity challenged under § 101.  Moreover, not even the federal courts have been able to crack the § 101 egg.  It is well-known that multiple federal judges have commented on the record that Alice was hard to apply in practice.  In addition, Judge Wu of the Central District of California criticized Alice for setting forth an "I know it when I see it" test.  Judge Pfaelzer, a colleague of Judge Wu, wrote that the Supreme Court's patent-eligibility cases "often confuse more than they clarify [and] appear to contradict each other on important issues."  In July, in Interval Licensing LLC v. AOL, Inc., the Federal Circuit's Judge Plager wrote that the post-Alice § 101 inquiry "renders it near impossible to know with any certainty whether the invention is or is not patent eligible."  And these are just a few examples of judicial confusion.  There are more.  For example, in September, in Gust, Inc. v. AlphaCap Ventures, LLC, the Federal Circuit ruled 2-1 that § 101 jurisprudence was too murky to be used as the basis of an attorney's fees award.  Writing in a concurring-in-part and dissenting-in-part opinion, Judge Plager concluded:

This emperor clearly has no clothes; we need not wait for our children to tell us this.  The legitimate expectations of the innovation community, as well as basic notions of fairness and due process, compel us to address this § 101 conundrum.

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

• "SAP America, Inc. v. InvestPic, LLC (N.D. Tex. 2018)," December 10, 2018
• "Gust, Inc. v. AlphaCap Ventures, LLC (Fed. Cir. 2018)," September 30, 2018
• "Interval Licensing LLC v. AOL, Inc. (Fed. Cir. 2018)," July 24, 2018
• "Cellspin Soft, Inc. v. Fitbit, Inc. (N.D. Cal. 2018)," July 12, 2018
• "SAP America, Inc. v. InvestPic, LLC (Fed. Cir. 2018)," May 20, 2018

9.  En Banc Federal Circuit: USPTO Not Entitled to Attorneys' Fees in § 145 Appeals

In July, the Federal Circuit handed down an en banc decision in NantKwest, Inc. v. Iancu, regarding the question of whether under 35 U.S.C. § 145 an applicant must pay the U.S. Patent and Trademark Office's attorneys' fees as part of the "expenses" the statute mandates, regardless of whether the applicant won or lost the case.  The District Court had rejected the Office's argument that it was entitled to recover attorneys' fees (and other expenses), and a divided panel of the Federal Circuit reversed the District Court's decision and ordered payment of the Office's fees.  The Federal Circuit chose to review the panel's decision sua sponte, and the en banc Federal Circuit affirmed the District Court's decision, over a spirited dissent, holding that the Office was not entitled to its attorneys' fees in appeals under § 145.

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

• "NantKwest, Inc. v. Iancu (Fed. Cir. 2018) (en banc)," July 29, 2018

8.  Supreme Court to Decide Whether Government Can File Petitions for Post-Grant Review

In October, the Supreme Court granted certiorari in Return Mail, Inc. v. U.S. Postal Service, in order to answer the question whether the government can bring post-grant review proceedings under the Leahy-Smith America Invents Act (AIA).  Specifically, the Supreme Court agreed to review whether the government is a "person" under the AIA, as is required to file a petition seeking the institution of AIA review proceedings.  The case began with Return Mail seeking to license its '548 patent, which claims methods, computer programs, and systems for processing undeliverable or returned mail, to the Postal Service.  Instead of licensing the '548 patent, however, the Postal Service filed a petition for ex parte reexamination with the U.S. Patent and Trademark Office.  The USPTO instituted the reexamination proceeding, but eventually confirmed the validity of the patent.  Return Mail then filed a complaint against the Postal Service in the Court of Federal Claims.  While that action was pending, the Postal Service filed a petition seeking the institution of covered business method (CBM) review of the '548 patent.  Return Mail opposed the institution of the CBM review​ on both substantive and procedural grounds, including that the Postal Service lacked standing to file a CBM petition.  Both the PTAB and a majority of the Federal Circuit panel hearing the appeal found that the Postal Service satisfied the requirement that it be a "person."  The Supreme Court granted certiorari on the issue of whether the government is a "person" in the context of the AIA's CBM proceeding.  Thus, by the middle of next year, we should know whether government agencies are "persons," permitted to bring AIA proceedings.

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

• "Supreme Court to Decide if Government Can Bring AIA Proceedings," October 29, 2018

7.  Supreme Court: PTAB Must Render Final Written Decision on All Challenged Claims

In April, the Supreme Court reversed the judgment of the Federal Circuit in SAS Institute Inc. v. Iancu, with Justice Gorsuch (joined by the Chief Justice and Justices Kennedy, Thomas, and Alito) providing a textual explication of the inter partes review (IPR) statute in deciding that the U.S. Patent and Trademark Office was compelled to render a Final Written Decision (FWD) on all claims challenged by a petitioner in its IPR petition.  This decision overruled the Patent Office's practice that the Director (through the Patent Trial and Appeal Board) could institute an IPR on less than all challenged claims and then limit the FWD to only the instituted claims.  Just two days after the Supreme Court's decision, the U.S. Patent and Trademark Office issued Guidance regarding how the PTAB will apply the Court's mandate in SAS Institute.  In particular, the Office noted that for all pending and future-filed petitions, the Board will institute on all challenged claims so long as the petitioner has shown a reasonable likelihood of invalidating at least one of the claims, and for cases where the Board has engaged the parties in partial institution proceedings, the Board "may" issue an order "supplementing the institution decision to institute on all challenges raised in the petition."

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

• "USPTO Issues Guidance on Supreme Court Ruling in SAS v. Iancu," April 26, 2018
• "SAS Institute Inc. v. Iancu (2018)," April 24, 2018

6.  Supreme Court to Decide Whether AIA Changed Application of On-sale Bar

In June, the Supreme Court granted certiorari on Helsinn Healthcare's petition to overturn the Federal Circuit's decision in Helsinn Healthcare v. Teva Pharmaceuticals that its patents were invalid by application of the on-sale bar under 35 U.S.C. 102(b).  The Question Presented in the petition was as follows:

Whether, under the Leahy-Smith America Invents Act, an inventor's sale of an invention to a third party that is obligated to keep the invention confidential qualifies as prior art for purposes of determining the patentability of the invention.

The issue is specifically related to the question of whether the AIA changed the application of the on-sale bar.  In December, the Supreme Court heard oral argument in this case.  The Supreme Court's decision will likely land this case on our Top Stories list again next year.

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

• "Supreme Court Hears Oral Argument in Helsinn v. Teva," December 6, 2018
• "Supreme Court Grants Certiorari in Helsinn Healthcare v. Teva Pharmaceuticals," June 26, 2018

Supreme Court Hears Oral Argument in Helsinn v. Teva

By Kevin E. Noonan --

The Supreme Court's recent forays into patent law cases have evinced a tendency towards statutory construction analysis, whether regarding substantive law (see, e.g., WesternGeco LLC v. ION Geophysical Corp. (2018); Sandoz Inc. v. Amgen Inc. (2017); Impression Products, Inc. v. Lexmark International, Inc. (2017); TC Heartland LLC v. Kraft Foods Group Brands LLC (2017); SCA Hygiene Products Aktiebolag v. First Quality Baby Products, LLC (2017); Life Technologies Corp. v. Promega Corp. (2017); Halo Electronics, Inc. v. Pulse Electronics, Inc. and Stryker Corp. v. Zimmer, Inc. (2016); Kimble v. Marvel Entertainment, LLC (2015); and Commil USA, LLC v. Cisco Systems, Inc. (2015)) or the procedural niceties of Federal Circuit review and U.S. Patent and Trademark Office procedures (see Oil States Energy Services, LLC. v. Greene's Energy Group, LLC (2018); SAS Institute Inc. v. Iancu (2018); Cuozzo Speed Technologies LLC v. Lee (2016); Teva Pharmaceuticals USA, Inc. v. Sandoz Inc. (2015)).  This trend could be considered a marked improvement over the Court's penchant for imposing their views on patent eligibility displayed earlier in this decade (see "Supreme Court Issues Decision in Alice Corp. v. CLS Bank"; Association for Molecular Pathology v. Myriad Genetics, Inc. (2013); and Mayo Collaborative Services v. Prometheus Laboratories, Inc. (2012)).  Consistent with this latest inclination, the Court will decide the extent to which Congress changed what is novelty-destroying under U.S. patent law when it revised 35 U.S.C. § 102 under the Leahy-Smith America Invents Act (AIA) in 2012 in Helsinn Healthcare S.A. v. Teva Pharmaceuticals Inc.

The Court heard oral argument in this case on Tuesday.  It is impossible to know, and even more foolhardy to guess, what the members of the Court are thinking from their questions during oral argument, but that cannot stop an attempted analysis of the aspects of the issues before them that naturally arises when reviewing an oral argument transcript.

Kannon K. Shanmugam argued for Petitioner Helsinn; William M. Jay argued for Respondent Teva; and Malcolm L. Stewart, Deputy Solicitor General, argued for the Government.  The Chief Justice posed the first question to Mr. Shanmugam, noting that Helsinn's interpretation of the word "sale" in the statute (to mean sales to the general public) is not necessarily consistent with the plain meaning of the word (Mr. Shanmugam attempted to distinguish on the basis of their being a linguistic difference between "sale" and the statutory language "on sale").  New Justice Kavanaugh jumped on Mr. Shanmugam's hypothetical (regarding a purported private sale of Mr. Shanmugam's overcoat to Mr. Jay), disputing why that wouldn't be a sale ("it's pretty hard to say something that has been sold was not on sale").  Justice Breyer, referring to Helsinn's argument in the brief, questioned whether Helsinn's contentions that its position was supported by the Court's precedents ("we only have Justice Story, Learned Hand, and I guess various others, maybe John Marshall for all I know", which in vacuo seem pretty solid), and opined that "the purpose of this on-sale rule including private sales is to prevent people from benefiting from their invention prior to and beyond the 20 years that they're allowed."  Mr. Shanmugam countered that "the predominant purpose of the on-sale bar was preserving the public's access to inventions that have entered the public domain."  Justice Kavanaugh mentioned "commercial exploitation" as another aspect of the bar, and Justice Breyer interjected that such sales (like the one here) can be secret sales.  Mr. Shanmugam, attempting to provide clarification to Justice Ginsberg, said that Congress intended to "clarify" the scope of what would be considered to be "on sale" with, inter alia, the catchall phrase "or otherwise available to the public," which Justice Kavanaugh opined was "a terrible clarification," stating that there were many efforts during debate over the AIA to "actually change the 'on sale language, and all those failed."  Mr. Shanmugam countered by suggesting that the way Congress had revised the statute was appropriate to its purpose, which included "abrogating some of the outlying lower court decisions that had extended both the on-sale bar and the public use bar to cases where there was not public availability."  Mr. Shanmugam responded directly to Justice Kavanaugh's citation of an amicus brief by Mark Lemley (and other legal academics) that the on-sale bar always included secret sales, a statement challenged by Justice Breyer based on the Court's citation in its Bonito Boats case of Learned Hand's dichotomy that a patentee "has to go ahead and patent [her invention] or keep it a secret forever."  To Justice Breyer's accompanying hypothetical of an inventor selling her invention to multiple parties under confidentiality agreements, Mr. Shanmugam says his "submission is a much more modest one," to "correct the Federal Circuit's error, which is to say that public availability is not required."

The Government argued next.  Justice Sotomayor responded negatively to Mr. Stewart's hypothetical, regarding sales of iPhones to distributors wherein being "on sale" should be considered to arise upon sales to consumers, saying that this might be true if you asked a consumer, but if you asked the industry they would say the phones were on sale when they were purchased by the distributor.  The Justice further said she has found no support for the Government's argument ("I've looked at the history cited in the briefs, I looked at the cases, I don't find it anywhere") and further said that the Government's assertion of the meaning of the statute was not the words Congress used.  Indeed, the words Congress did use, "on sale," were fraught with their historical meaning that did not support the Government's position.  Justice Kagan followed by asking whether the changes to the statute under the AIA were "capable of flipping [] settled law."  After further colloquy, Mr. Stewart conceded that the change in language would not be so capable, but only if he accepted Justice Kagan's assumption (and it's "a big assumption," the Justice herself conceded) that the law was indeed settled on the question of what activities fell under the on sale bar under prior law.  Justice Kavanaugh returned to the questioning, asking whether this wasn't "a classic example of trying to snatch victory from defeat in some of the legislative statements?" in view of Congress's failure to affirmatively revise the statute to exclude secret sales.  Mr. Stewart aptly (but not necessarily persuasively) responded, referring to how those failed proposals would have otherwise modified the statute to require that the invention be disclosed, even under circumstances where it would not upon sale.

Mr. Jay argued last, leading with the simple proposition that "[a] product that is sold or offered for commercial sale is on sale."  Justice Alito questioned whether Respondent's position, if stated in statutory language not used by Congress ("on sale publicly or on sale privately"), "would be nonsense," because this phrase would be followed by "or otherwise available to the public" and "otherwise" should indicate that "all of the things that went before are public."  Mr. Jay responded by saying:

So we think that the function of "otherwise" in the statute as amended [] is to acknowledge that there is overlap between the previous four categories and the new category of invalidating prior art that's being added, so as to make sure that the new category doesn't swallow or change the meaning of a prior one.

This "new category" would include "An oral presentation at a conference without slides" and "a collaboration among many people on an app."  In Respondent's view, by including the phrase "or otherwise available to the public," Congress intended "to create new invalidating prior art disclosures that weren't invalidating before the AIA."  Mr. Jay clarified for Justice Sotomayor that the U.S. is the only country where "secret" prior art could be novelty destroying, and that "otherwise" is intended to "make clear that that new category was a residual category intended to catch things not already caught."  Various members of the Court (as is their wont) engaged counsel with an extended exercise in analogy-making, involving collections of sports ("football, baseball, swimming," Justices Alito and Breyer), coupled with a hypothetical catch-all of "amended to add 'or any other activity that involves the use of a ball,'" and a proscription against "peanut butter cookies, pecan pie[, and] brownies" (Justice Kagan), coupled with the question of whether the proscription would be violated by "nutless brownies."  Despite yeoman effort to address these analogies, Mr. Jay was able to forthrightly respond to Justice Kagan's question asking whether it was Respondent's position that "it's not even like a little bit doubtful what 'on sale' means?" by saying "[c]ertainly not by the time the AIA was enacted."  After additional colloquy with Justice Kavanaugh regarding whether the term "on sale" is ambiguous, Justice Gorsuch asked whether the Court should consider how the Patent Office has interpreted the statute regarding the on-sale bar.  Mr. Jay reminded the Justice that "[t]his Court has never given deference to the Patent Office on substantive questions of patentability, on what it takes to overcome the bars put in the statute by Congress where Congress has said you may not have a patent if X, Y, or Z" and that "this Court has any number of decisions in which it has held that a patent issued by the Patent Office in conformance with the -- with the office's then examination guidelines were invalid."  Justice Kagan completed the Court's questioning of Mr. Jay by asking "would the prior secret sale of an invention by somebody other than the patentholder invalidate the patentholder's patent?", to which Mr. Jay answered "yes" (while acknowledging that "I've not seen cases like that because I think it would be exceptionally difficult to").

Petitioner's rebuttal drew questioning only from Justice Breyer, regarding the meaning of the term "otherwise."  Argument concluded with rather jocular reference to the excellence of the briefs (Justice Breyer having earlier noted "I thought the bar really earned its pay on both sides") with the Chief Justice saying "I am sure we'll come up with an excellent opinion."

Acceleration Bay, LLC v. Activision Blizzard Inc. (Fed. Cir. 2018)

What is a Printed Publication for Prior Art Purposes?

By Joseph Herndon --

Patent owner Acceleration Bay, LLC ("Acceleration") appealed the final written decisions of the Patent Trial and Appeal Board holding unpatentable claims of U.S. Patent Nos. 6,829,634; 6,701,344; and 6,714,966.  Activision Blizzard, Inc., Electronic Arts Inc., Take-Two Interactive Software, Inc., 2k Sports, Inc., and Rockstar Games, Inc. (collectively, "Blizzard") cross-appealed portions of the Board's decisions holding that the Lin article is not a printed publication under 35 U.S.C. § 102(a), among other issues.

Here, we look at the determination of features in a "preamble" as being limitations of the claim, as well as, requirements of an article being considered a printed publication for prior art purposes.

The patents at issue are directed to a broadcast technique in which a broadcast channel overlays a point-to-point communications network.  The communications network consists of a graph of point-to-point connections between host computers or "nodes," through which the broadcast channel is implemented.

Blizzard filed six inter partes review ("IPR") petitions—two for each of the '344, '966, and '634 patents—based principally on two different prior art references:  one set of IPRs challenged claims based on the Shoubridge article alone or combined with a prior art book Direct-Play ("Shoubridge IPRs"), and another set of IPRs challenged claims based on the Lin article alone or combined with DirectPlay ("Lin IPRs").

The Board instituted an IPR on each petition, on many of the grounds and claims raised, and rendered six final decisions.  In the Shoubridge IPRs, the Board determined many claims to be unpatentable, and in the Lin IPRs, the Board concluded that Lin is not a printed publication under 35 U.S.C. § 102(a) and thus determined Blizzard failed to show the challenged claims are unpatentable over Lin.

Shoubridge IPRs

Acceleration appealed portions of the Board's decisions in the Shoubridge IPRs.  Claim 1 of the '966 patent is representative of the claim construction disputes in Acceleration's appeal (emphases added):

1.  A computer network for providing an information delivery service for a plurality of participants, each participant having connections to at least three neighbor participants, wherein an originating participant sends data to the other participants by sending the data through each of its connections to its neighbor participants and wherein each participant sends data that it receives from a neighbor participant to its other neighbor participants, further wherein the network is m-regular, where m is the exact number of neighbor participants of each participant and further wherein the number of participants is at least two greater than m thus resulting in a non-complete graph.

Claim 1 of the '344 patent is very similar and begins "1. A computer network for providing a game environment for a plurality of participants, ...".

Acceleration argued that the terms "game environment" and "information delivery service," appearing in the '344 and '966 patents, respectively, should have been given patentable weight despite appearing in the preambles because they provide structure for the remainder of the claims.  Acceleration alternatively argues that these terms appear in the body of the claims because there is no transition phrase denoting a preamble.

Regarding the latter argument, the Federal Circuit responded that Acceleration's poor claim drafting will not be an excuse for it to infuse confusion into its claim scope, and simply concluded that "game environment" and "information delivery service" are part of the preamble of the claims.

The Federal Circuit noted that there is no beneficial purpose to be served by failing to include a transition word in a claim to clearly delineate the claim's preamble from the body, and it "caution[ed] patentees against doing so."

Then, because the terms at issue appear in preambles, it must be determined whether the terms are limitations.  General case law indicates that a preamble limits the invention if it recites essential structure or steps, or is necessary to give life, meaning, and vitality to the claim.

The Federal Circuit agreed with the Board that the claim terms "game environment" and "information delivery service" are non-limiting because they merely describe intended uses for what is otherwise a structurally complete invention.  They do not impart any structure into or serve as antecedents for the claims at issue.  Instead, they simply provide an intended use for what is otherwise a claim for a network.

Lin IPRs

Blizzard cross-appealed many portions of the Board's decisions in the Lin IPRs, and here we only discuss the issue of whether Lin is a printed publication under § 102(a).

Whether a reference qualifies as a printed publication under § 102 is a legal conclusion based on underlying fact findings.  One such fact question is public accessibility.  Because there are many ways in which a reference may be disseminated to the interested public, public accessibility has been called the touchstone in determining whether a reference constitutes a printed publication.

Case law has indicated that a reference is considered publicly accessible if it was disseminated or otherwise made available to the extent that persons interested and ordinarily skilled in the subject matter or art, exercising reasonable diligence, can locate it.

The Board found that Lin was not publicly accessible before the critical date.

Based on the testimony of Glenn Little, a Systems Administrator at the Computer Science and Engineering ("CSE") department of the University of California, San Diego ("UCSD"), the Board found that Lin had been uploaded to the CSE Technical Reports Library's website as of November 23, 1999, which is not challenged on appeal.  As the Board explained, according to Mr. Little, "the CSE department regularly maintains electronic technical reports and records concerning those reports, and a staff member assigns a unique identifier to each report based on the year it was uploaded and the relative order it was uploaded in comparison to other papers."

The Board then noted that public accessibility requires more than technical accessibility.  Because there was no evidence that Lin was disseminated to the public, the Board focused on whether an interested skilled artisan, using reasonable diligence, would have found Lin on the CSE Technical Reports Library website.  The Board found that despite some indexing and search functionality on the website, Lin was not publicly accessible.  It found the website allowed a user to view a list of technical reports indexed only by author or year and that there was no evidence as to how many reports were in the Library's database in 1999.  The Board determined that at best, Blizzard's evidence suggests that an artisan might have located Lin by skimming through potentially hundreds of titles in the same year, with most containing unrelated subject matter, or by viewing all titles in the database listed by author, when the authors were not particularly well known.  The Board also found the website's advanced search form to be deficient.  It found that while the advanced search form appeared to allow a user to search keywords for author, title, and abstract fields, evidence demonstrated that functionality was not reliable.  In sum, the Board determined that Blizzard had not shown sufficiently that the UCSD CSE Technical Reports Library was searchable or indexed in a meaningful way so that a person of ordinary skill in the art would have located Lin.  The Board, therefore, concluded Lin is not a printed publication under § 102(a).

The Federal Circuit found no error in the Board's reasoning.  Namely, the Federal Circuit found that substantial evidence supports the Board's findings that Lin was not publicly accessible, including that Lin was not indexed in a meaningful way and that the website's advanced search form was deficient.  Mr. Little testified he does not know how the search works or how keywords are generated, that he never searched for Lin using the advanced search form, and that it was not the CSE department's practice to verify the advanced search capability for title and abstract when a new article was uploaded.  Mr. Little also admitted it was possible the search function did not work.

Acceleration also presented evidence that a recent advanced search for keywords in the title and abstract of Lin failed to produce any results.

Blizzard argued these results are unauthenticated hearsay and are based on searches conducted years after the critical date, but Mr. Little testified that as to the website, "[i]t's pretty much the same, actually, between [1999] and now.  We're running the same software."  The Federal Circuit found no reason to discount the Board's weighing of the evidence.  Substantial evidence was thus found to support the Board's finding that there was insufficient evidence of record to support a finding that a person of ordinary skill in the art in 1999 could have located Lin using the CSE Library website's search function.

The Federal Circuit thus distinguished a similar case:  In re Lister, 583 F.3d 1307 (Fed. Cir. 2009).  In Lister, a reasonably diligent researcher with access to a database that permits the searching of titles by keyword would be able to attempt several searches using a variety of keyword combinations, and thus, the manuscript at issue was publicly accessible as of the date it was included in databases that permitted keyword searching of titles.

The Federal Circuit noted that unlike in Lister, here the record supports the Board's finding that the CSE Library website's advanced search function did not successfully permit keyword searching of titles, a key feature in Lister.  The Board's fact finding that, with available reports indexed only by author or year, Lin was not meaningfully indexed, was found to be supported by substantial evidence.

Blizzard argued that because Lin was indexed by title for a given year, author name, and unique sequence number, that was sufficient for public accessibility.  But, the Federal Circuit stated that the test for public accessibility is not "has the reference been indexed?"  Where indexing is concerned, whether online or in tangible media, the ultimate question has been whether the reference was available to the extent that persons interested and ordinarily skilled in the subject matter or art, exercising reasonable diligence, can locate it.

Here, the Board found that although Lin was indexed by author and year, it was not meaningfully indexed such that an interested artisan exercising reasonable diligence would have found it, which is a proper consideration under the Federal Circuit precedent.  As such, the Federal Circuit found that Lin was not a printed publication under § 102.

Acceleration Bay, LLC v. Activision Blizzard Inc. (Fed. Cir. 2018)
Panel: Chief Judge Prost and Circuit Judges Moore and Reyna
Opinion by Circuit Judge Moore

Nobel Biocare Services AG v. Instradent USA, Inc. (Fed. Cir. 2018)

By Joseph Herndon --

Nobel Biocare Services AG appealed from the decision of the U.S. Patent and Trademark Office's Patent Trial and Appeal Board in an inter partes review (IPR) holding claims 1–5 and 19 of U.S. Patent No. 8,714,977 invalid based on an ABT Catalog.  Many issues were presented, and here, we review the opinion with respect to whether the ABT Catalog qualifies as a prior art printed publication under pre-AIA 35 U.S.C. § 102(b).

This case started on October 27, 2014, by Nobel filing a complaint with the U.S. International Trade Commission (ITC) for investigation of Instradent USA, Inc.'s Drive CM dental implants as allegedly violating 19 U.S.C. § 1337 by reason of importation of an implant product that infringes the '977 patent and U.S. Patent No. 8,764,443.  The ITC found claims of the '977 patent anticipated by an ABT "Product Catalog" with the date "March 2003" on the cover.  However, later, the ITC issued a Commission Opinion which determined that Instradent had failed to show by clear and convincing evidence that the ABT Catalog is prior art under § 102(b).

In the interim, on August 20, 2015, Instradent petitioned for IPR of claims 1–7, 9, and 13–20 of the '977 patent with invalidity challenges based on the ABT Catalog.  The Board determined that a preponderance of the evidence establishes that the ABT Catalog qualifies as a prior art printed publication under pre-AIA 35 U.S.C. § 102(b), and ultimately found the claims invalid.

Thus, the appeal largely turns on whether the ABT Catalog is prior art under § 102(b).

The ABT Catalog

In or about the early 1990s, named inventor Fromovich founded Alpha-Bio Tech Ltd. ("ABT"), which sold dental implants and related goods.  He also served as ABT's CEO.  In his capacity at ABT, Fromovich conducted dentist trainings and attended industry trade shows and conferences, including the International Dental Show (IDS) Conference held in Cologne, Germany.  At the IDS Conference, dental manufacturers would showcase their products and distribute written materials describing their products.  Nobel acquired ABT and its intellectual property rights in 2008.

The ABT Catalog included a data of March 2003 on its cover and discloses dental implant screws and other details of implants as claimed in the '977 patent.  The ABT Catalog was produced by Instradent and alleged to be prior art to the '977 patent.

Fromovich testified about the ABT Catalog during the ITC proceedings.  When asked why the catalog says "March 2003" on the cover, Fromovich indicated that he "estimated" it was because it was created in the end of March 2003 for the IDS in Cologne, Germany.  Fromovich testified that ABT had a small booth and he attended the March 2003 IDS Conference.  According to Fromovich, the IDS Conference is "one of the biggest for distribution in Europe" with possibly a thousand attendees.  He further testified that he did not recall if he brought the ABT Catalog to the conference, but that it was "unlikely."  He explained that if he brought the ABT Catalog, it would have been a "small amount" of catalogs because it would have been a first version of a 62-page document, and ABT did not send a shipment so it would have had to fit in his luggage.

Fromovich also testified that the ABT Catalog was used in connection with training courses and provided to attendees without requiring them to sign a confidentiality agreement.

The parties dispute whether the ABT Catalog qualifies as a "printed publication" under pre-AIA § 102(b).  Whether a reference qualifies as a "printed publication" is a legal conclusion based on underlying factual findings, and the underlying factual findings include whether a reference was publicly accessible.  The case law indicates that a reference will be considered publicly accessible if it was disseminated or otherwise made available to the extent that persons interested and ordinarily skilled in the subject matter or art exercising reasonable diligence can locate it.

In addressing public accessibility of the ABT Catalog, the Board considered evidence that had been presented to the ITC, including Fromovich's testimony, and new evidence not considered by the ITC, including the declarations and deposition testimony of Yechiam Hantman and Zvi Chakir.  In March 2003, Hantman and Chakir coowned Chakir Implants, Ltd., a dental supply distributor located in Israel.  Hantman was unable to attend the conference, and he requested that Chakir collect catalogs from competitors at the 2003 IDS Conference and give them to him upon his return.  Hantman's declaration stated:  "Based upon my review of the attached materials and my specific recollections of conversations with customer [sic] in later 2002 and early 2003, and examination of the 2003 [ABT] Catalog after receiving it after the IDS trade show, I am certain that the 2003 [ABT] Catalog was publically accessible to the dental industry, including competitors, in March 2003, after the IDS show that year."

Chakir's declaration stated that he collected catalogs and other materials from competitors, including ABT at the 2003 IDS Conference and gave the materials relating to dental implants to Mr. Hantman.

The Federal Circuit found that substantial evidence supported the Board's finding that the ABT Catalog was publicly accessible prior to the critical date.  The Federal Circuit credited Chakir and Hantman's testimony that Chakir obtained a copy of the ABT Catalog at the March 2003 IDS Conference and that Hantman retained that copy in his records thereafter.  Hantman's declaration included excerpts of his copy of the ABT Catalog taken from his files.  The Board found that Hantman's copy of the ABT Catalog and the copy offered as prior art by Instradent in the IPR had identical pages except for some handwriting on the cover of Hantman's copy.  Nobel did not dispute this finding.

Additionally, the ABT Catalog has the date "March 2003" on its cover.  Although the ABT Catalog's date is not dispositive of the date of public accessibility, its date is relevant evidence that supports the Board's finding of public accessibility at the March 2003 IDS Conference.

Moreover, the Board found, and Nobel did not dispute on appeal, that the ABT Catalog is the type of document normally intended for public dissemination.  It is undisputed on appeal that the ABT Catalog is the type of document intended for public dissemination, and it bears no designations, such as "draft" or "confidential," that might suggest that it was not intended for public distribution.

The Federal Circuit gave much weight to Chakir's testimony regarding his habitual practice in obtaining product literature, including brochures, at the IDS Conference.  Nobel's suggestion that Chakir could have obtained the ABT Catalog confidentially or under other circumstances that would not legally constitute public accessibility lacked any evidentiary basis.

Additionally, Nobel pointed to no evidence that ABT ever distributed the ABT Catalog with an expectation that it would be kept confidential or not disseminated.

The Federal Circuit addressed the sufficiency of the corroboration of the testimony and found the testimony of Messrs. Hantman and Chakir not only to be corroborated by each other, but also by a) the actual copy of the ABT Catalog, dated March 2003, submitted as evidence and b) Dr. Fromovich's testimony that ABT operated a booth at the March 2003 IDS conference.

The fact that Hantman had a copy of the ABT Catalog in his files further corroborates his testimony that he obtained a copy of the same document asserted to be prior art in the IPR.

Thus, although much of the evidence relied upon was based on testimony of biased witnesses regarding events that took place over 10-15 years ago, the Federal Circuit found no reason that the testimony was problematic.  As a result, the ABT Catalog was found to be prior art.

Nobel Biocare Services AG v. Instradent USA, Inc. (Fed. Cir. 2018)
Panel: Chief Judge Prost and Circuit Judges Lourie and Chen
Opinion by Circuit Judge Lourie

Patenting Repurposed Drugs

By John E. Conour --

Even with billions of dollars of funding and the cumulative knowledge and experience of over a hundred years of experimental pharmacology, de novo discovery of effective and safe therapeutics remains a costly and risky endeavor.  The number of unsuccessful attempts to obtain Food and Drug Administration (FDA) approval of drugs for specific indications is far greater than the number of successes.  As a result, there is an extensive and ever growing list of "failed" drugs, most of which are ultimately abandoned by pharmaceutical companies.

More recently, failed drugs previously considered to be lost causes are being reconsidered as possible therapies for different indications than those for which they had originally been considered.  Such drug "repurposing" provides researchers and clinicians with a cost-effective way to identify potential new therapies without needing to start from scratch.  Many failed drugs have already established their relative safety in Phase I clinical trials, which can simplify and reduce the cost of obtaining FDA approval should a new indication be found.  Drug repurposing is not limited to failed drugs but is also being considered for currently marketed drugs as well as "off patent" generic compounds to expand and extend their usefulness.

But because drug repurposing primarily concerns previously-known drugs, obtaining patent protection can be challenging.  In some cases, a drug to be repurposed is still protected by a patent that can be acquired and/or in-licensed, but often the drug itself is not protected by patent.  Without patent protection, commercialization of a repurposed drug (i.e., maximizing the potential beneficial impact of the drug) is not realistic.  This article discusses certain issues to be considered when trying to obtain new patent protection for repurposed drugs.  It should be expected that each attempt to patent a repurposed drug will have its own factspecific challenges.  Accordingly, the concepts discussed here are generalized and nonexhaustive.

The foundational inquiry for determining whether a repurposed drug can be patented in the United States is to consider whether, under 35 U.S.C. § 101, the drug constitutes patentable subject matter.  Section 101, in relevant part, provides: "[w]hoever invents or discovers any new and useful process, machine, manufacture, or composition of matter, or any new and useful improvement thereof, may obtain a patent therefor . . . ."[1]  Repurposed drugs are often non-nature-based compositions of matter (i.e., synthetic compounds that are not naturally occurring) that can be used in useful processes (e.g., methods of treating a disease by administering to a patient in need thereof a therapeutically effective dose of a drug).  Therefore, claims directed to repurposed drugs and methods of their use should not typically run afoul of § 101.  Even repurposed drugs that are nature-based compositions of matter may still be patentable, for example, if recited in a method of treatment claim.  Indeed, method of treatment claims reciting nature-based compositions of matter seem to be on more secure footing under § 101 in light of the recent decision in Vanda Pharmaceuticals Inc. v. West-Ward Pharmaceuticals,[2] at least because the United States Patent and Trademark Office has issued a recent memorandum to the Patent Examining Corps advising that the Patent Office intends to follow the legal reasoning in this case.[3]  Nevertheless, care must be taken when drafting claims to avoid § 101 issues.

Another significant hurdle to overcome with respect to patenting repurposed drugs is 35 U.S.C. § 102.  Section 102, as applied to a repurposed drug, requires that it was not previously patented, described in a printed publication, or in public use, on sale, or otherwise available to the public before a patent application is filed to cover the repurposed drug.  In other words, a claim to the repurposed drug itself must be novel, in that it must recite something not previously publicly known.  Practically speaking, most composition of matter claims reciting only the repurposed drug will be excluded from patentability under § 102, because (almost by definition for a "repurposed" drug) the drug was previously known and thus its earlier public disclosure would be prior art to any subsequent patent filing.  Accordingly, composition claims directed to the repurposed drug itself will likely be anticipated because they are not reciting anything new.  Yet there are ways to overcome § 102 to obtain composition claims on repurposed drugs.

One useful approach for overcoming a § 102 rejection is to incorporate the repurposed drug into a composition that includes one or more other compounds to form a novel combination not previously known.  Importantly, the claimed combination can be any practical combination that is novel for purposes of overcoming § 102.  However, as discussed below, claims to pharmaceutical compositions that recite combinations with more than one key constituent (e.g., a therapeutically effective amount of a repurposed drug and a therapeutically effective amount of a second drug) are more likely to be patentable.  Additional details regarding specific amounts of drugs included in combinations or ratios between the drugs in the combination can add further grounds for finding such claims patentable over what was previously known in the prior art.

A further approach to obtaining claims directed to previously known drugs that are patentable in a § 102 context is to draft claims to novel pharmaceutical dosage forms.  Pharmaceutical dosage forms can be, for example, solids, liquids, delayed or extended release forms, and/or for a specific type of administration (e.g., oral, parenteral, intramuscular, etc.).  Many types of variations are possible with pharmaceutical dosage forms, which lend themselves to drafting novel claims.  For example, desired release characteristics and/or routes of administration may differ for the new use of the repurposed drug compared to its previous use, which would provide the basis of a novel claim.

As a final and particularly important example, a method claim reciting a repurposed drug may more easily overcome § 102 rejections.  Repurposing a drug for a new indication is typically a novel use of the drug.  Therefore, a method-of-use claim that recites a repurposed drug for treating a subject with the new indication should also be novel.  Such method claims are particularly useful because they are difficult for competitors to design around, and they are also available in many foreign jurisdictions (though with potentially different formats).

What is often more challenging for patenting a repurposed drug is overcoming an obviousness rejection.  Obviousness (or lack of inventive step) falls under 35 U.S.C. § 103, which states, in relevant part, that:

A patent for a claimed invention may not be obtained . . . , if the differences between the claimed invention and the prior art are such that the claimed invention as a whole would have been obvious before the effective filing date of the claimed invention to a person having ordinary skill in the art to which the claimed invention pertains.[4]

Here, the basic calculus is that if a skilled artisan (e.g., a clinician or researcher in the same field of practice or study as the person seeking to repurpose a drug and with the average skill level of such clinicians or researchers) who understands the prior art would have reasonably expected the drug to be useful for the new indication, then a claim to a repurposed drug for the new indication may be obvious.  Obviousness rejections of claims to repurposed drugs can be very complex and can be based on a combination of several prior art references, each teaching one or more aspects of the rejected claims.

Unfortunately, the relatively straightforward strategies for overcoming a § 102 rejection are mostly ineffective for overcoming obviousness rejections.  Simple chemical combinations of repurposed drugs with other drugs that may make a novel composition are arguably obvious if they are nothing more than a routine exercise for a skilled pharmacologist.  Fortunately, there are ways to overcome obviousness rejections, but they can require planning well before filing a patent application, and indeed, experiments to investigate the usefulness of a repurposed drug should be designed with obviousness rejections in mind.  This is because one of the most powerful arguments against an obviousness rejection of claims directed to a repurposed drug is a showing of unexpected results.[5]  In this context, a showing of unexpected results can be a presentation of scientific data (often in the patent application, but data can also be presented after filing) that, for example, show a surprising effect of a drug that would not have been expected based on what was known at the time.  Examples of unexpected results can include that a drug surprisingly works as intended for a new indication, or that a drug works at the dose used (e.g., a surprisingly low dose), or that a combination of drugs demonstrates synergy when used together (their combined effect being greater than each drug acting alone), among others.[6]  Another powerful example of unexpected results is the discovery that the drug acts via a different target or has a different mechanism of action for the new use than for its previous use.  Such examples of unexpected results can overcome obviousness rejections for claims directed to method of use, or pharmaceutical dosage forms, or pharmaceutical compositions comprising a combination of drugs, respectively.  Therefore, care should be given to experimental design and the types of data that are collected in support of such evidence of non-obviousness.

Finally, a patent for a repurposed drug must satisfy 35 U.S.C. § 112, which requires that a patent application include:

[A] written description of the invention, and of the manner and process of making and using it, in such full, clear, concise, and exact terms as to enable any person skilled in the art to which it pertains, or with which it is most nearly connected, to make and use the same.[7]

Section 112 also requires an application to have one or more claims "particularly pointing out and distinctly claiming the subject matter which the inventor or a joint inventor regards as the invention."[8]  Basically, § 112 requires that, at the time of filing, the written description must enable a skilled artisan to replicate the invention (much like a scientific paper should enable a researcher to replicate the experiments and data presented in the paper) and that the claims must be fully supported by the written description.

Careful patent application planning and drafting can avoid or overcome § 112 rejections.  At a minimum, literal support for each claim should be provided, examples of various embodiments of the invention described (e.g., the repurposed drugs and indication, possible drug substitutions and/or derivatives, dosing amounts, dosage forms, excipients, dosing regimens, methods of treatment, etc.), and experimental data establishing drug effectiveness included.  The written description should also be drafted with sufficient detail and distinct variations of the invention to permit claim amendments that can dispose of a prior art rejection (under either § 102 or 103).  Indeed, all important details and variations of the invention envisioned must be included before filing because § 112 prohibits addition of "new matter" after filing.

In conclusion, patent protection is possible for previously known drugs being repurposed for new indications.  The best chances for patenting repurposed drugs occur when care is given to initial experimentation to establish the usefulness of the drugs and for identifying any unexpected properties of the drugs.  By combining robust invention disclosures with thoughtful and detailed application preparation, patent applications directed to repurposed drugs will be better prepared to successfully navigate the rigors of the Patent Office.

[1] 35 U.S.C. § 101.

[2] 887 F.3d 1117 (Fed. Cir. 2018).

[3] See Memorandum from Robert W. Bahr, Deputy Comm'r for Patent Examination Policy, to Patent Examining Corps (Jun. 7, 2018), available at https://www.uspto.gov/sites/default/files /documents/memo-vanda-20180607.PDF.

[4] 35 U.S.C. § 103.

[5] Other important objective evidence of non-obviousness, also known as "secondary considerations," includes evidence of commercial success, long-felt but unsolved needs, and failure of others.  See Graham v. John Deere Co. of Kansas City, 383 U.S. 1, 17 (1966).

[6] See Manual of Patent Examining Procedure §§ 716.02, 2145.

[7] 35 U.S.C. § 112(a).

[8] Id. § 112(b).