Patent Docs: Post-Grant Proceedings

Post-Grant Proceedings

March 20, 2020

Naples Roundtable Requests PTAB to Make Decisions Precedential

The Naples Roundtable, a 501(c)(3) non-profit organization whose primary mission is to explore ways to improve and strengthen the U.S. patent system, will on Monday, March 23rd file a Request with the U.S. Patent and Trademark Office, to designate Ex parte Olson (Appeal 2017-006489), and Ex parte Fautz (Appeal 2019-000106) as precedential. Both were designated "informative" on July 21, 2019. In each case, the Patent Trial and Appeal Board reversed an Examiner's decision rejecting the claims in each application as being directed to patent-ineligible subject matter under 35 U.S.C. § 101 under the Supreme Court's Mayo/Alice jurisprudence. The basis for the Board's decision reversing the Examiner in each case was the 2019 Revised Patent Subject Matter Eligibility Guidance, 84 Fed. Reg. 50 (Jan. 7, 2019) (hereinafter "Guidance").

The Olson claims were directed to a catheter navigation system involving mathematical equations used in the claimed system and methods that reduced registration errors in a 3D imaging system resulting in improved catheter placement in a patient. The Board found error in the Examiner's application of Revised Step 2A, 2nd Prong, wherein the claims recited additional limitations that applied the results of the mathematical formulae to achieve the claimed result, i.e., reduce errors in catheter placement by accounting for patient-specific non-linearities and inhomogeneities in catheter navigation, again finding similarities to how the Arrhenius equation was used in Diamond v. Diehr.

The Fautz claims were directed to magnetic resonance tomography (MRT) and methods for performing MRT using the apparatus and recited three mathematical formulae and four calculations that use those formulae. As in Olson, the Board held that the Examiner improperly applied Revised Step 2A, 2nd Prong.

And in each case, the rationale for the Board's decision avoided having to consider Revised Step 2B, regarding whether the claim recited that ineluctable "something more" recited in the Revised Guidance.

The letter is signed by Gary Griswold, Naples Roundtable President; Kevin E. Noonan, Patent Docs author and MBHB Partner: Andrew Baluch, Naples Roundtable Amicus Committee Chair; and Teresa Summers, Naples Roundtable Treasurer.

Posted at 11:55 PM in Patent Trial and Appeal Board, Patentable Subject Matter, Post-Grant Proceedings | Permalink | Comments (0)

January 19, 2020

BioDelivery Sciences International, Inc. v. Aquestive Therapeutics, Inc. (Fed. Cir. 2020)

By Donald Zuhn –-

Last week, the Federal Circuit issued a per curiam Order in BioDelivery Sciences International, Inc. v. Aquestive Therapeutics, Inc., denying a petition for a panel rehearing or rehearing en banc filed by Appellant BioDelivery Sciences International, Inc. Judge Newman dissented from the denial of the petition for rehearing en banc.

The dispute between the parties arose when BioDelivery sought inter partes review of claims 1, 4, 6–9, 11, 12, 26, 27, 32, 38, 44, 51, 58, 65, 72, 82, 109, and 125–127 of U.S. Patent No. 8,765,167, citing seven prior art grounds of anticipation or obviousness. The U.S. Patent and Trademark Office Patent Trial and Appeal Board instituted the IPR on most, but not all, of the challenged claims, and on one of the grounds. The PTAB ultimately issued a Final Written Decision finding claims 1, 4, 11, 12, 26, 27, 44, 51, 58, 65, 72, 82, and 125–127 of the '167 patent to be patentable.

BioDelivery appealed to the Federal Circuit, which received briefing and argument before the Supreme Court issued its decision in SAS Institute Inc. v. Iancu. On BioDelivery's motion, the Federal Circuit directed the PTAB "to implement the Court's decision in SAS." In response, the PTAB "modif[ied its] Decision to Institute and instead deny the Petition in its entirety, thereby terminating [the] proceeding," and in particular, "ORDERED that Petitioner's request for inter partes review of claims 1, 4, 6–9, 11, 12, 26, 27, 32, 38, 44, 51, 58, 65, 72, 82, 125–127 of the '167 patent is denied and no inter partes review is instituted."

Judge Newman, dissenting from the denial of the petition for rehearing en banc, stated that: "I write because of the significance of the balance of agency and judicial authority, and the rules of procedural law in the administrative state." Noting that the Supreme Court in SAS held that 35 U.S.C. § 318(a) requires that in an inter partes review the PTAB must decide all of the claims and grounds challenged in the petition, Judge Newman indicated that "the PTAB had not met this requirement for these cases [the appeal consolidated three separate PTAB decisions]." In particular, Judge Newman noted that "[t]he PTAB did not comply with the Remand Order, stating that it would be inefficient and expensive to include the additional claims and grounds," with the PTAB explaining in its Decision on Remand that "[b]ecause the overwhelming majority of unpatentability grounds presented by Petitioner fail to meet the standard for institution of inter partes review, we find that instituting trial as to those grounds at this time is neither in the interest of the efficient administration of the Office, nor in the interest of securing an inexpensive resolution of this proceeding." In her dissent, Judge Newman writes that:

[M]y colleagues hold that the PTAB is not required to comply with the court's Remand Order, and further hold that this non-compliance is not reviewable. This action raises critical issues of agency authority, judicial responsibility, and the constitutional plan.

Judge Newman declares that "[m]y concern is with the PTAB's position that it need not follow the court's Remand Order, for reasons of efficiency and expense," adding that "[s]uch agency authority cannot be discerned in the America Invents Act, and contravenes decades of constitutional jurisprudence." Citing Banks v. United States, 741 F.3d 1268, 1276 (Fed. Cir. 2014) (quoting Briggs v. Pa. R. Co., 334 U.S. 304, 306 (1948)), Judge Newman notes that agency action is bound by the mandate rule, which:

[D]ictates that 'an inferior court has no power or authority to deviate from the mandate issued by an appellate court.' Once a question has been considered and decided by an appellate court, the issue may not be reconsidered at any subsequent stage of the litigation, save on appeal.

Judge Newman also observes that "[t]he legislative record contains no contemplation of a PTAB procedure whereby, after full PTAB trial and decision and appeal to the Federal Circuit, the PTAB could annul the appeal and remove the entire action and decisions and procedure from history, insulated from review." As a result, Judge Newman found the PTAB's action in this case to be "seriously flawed." According to Judge Newman, "[t]he PTAB's refusal to comply with our Remand Order to implement the Supreme Court's ruling warrants en banc attention," and she therefore dissented from the denial of the petition for rehearing en banc.

BioDelivery Sciences International, Inc. v. Aquestive Therapeutics, Inc. (Fed. Cir. 2020)
Per curiam
Before Chief Judge Prost and Circuit Judges Newman, Lourie, Dyk, Moore, O'Malley, Reyna, Wallach, Taranto, Chen, and Hughes; dissenting opinion by Circuit Judge Newman

Posted at 11:58 PM in Federal Circuit, Post-Grant Proceedings | Permalink | Comments (1)

January 15, 2020

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

By Kevin E. Noonan --

Last week, the Federal Circuit affirmed invalidation of claims to methods for reducing Protein A leaching in affinity column chromatographic methods important inter alia in purifying monoclonal antibodies, in Genentech, Inc. v. Hospira, Inc. In doing so, the panel majority (over a dissent by Judge Newman) illustrated anew the importance of the deference the U.S. Patent and Trademark Office (and particularly the Patent Trial and Appeal Board) is due under the Administrative Procedures Act, and how that deference can be outcome determinative under the right circumstances.

The case arose before the PTAB in an inter partes review (IPR) of U.S. Patent No. 7,807,799, which claimed methods for purifying antibodies comprising a C_H2/C_H3 region using Protein A affinity chromatography. The claimed methods are directed to an improvement wherein the amount of Protein A contaminant in the antibody eluate is minimized (substantially to zero). The opinion characterized the claimed method as a "standard purification technique," relying on high affinity, reversible binding to C_H2/C_H3 regions, which methods were capable of "reducing leaching of protein A . . . by reducing [the] temperature" of the "composition that is subjected to protein A affinity chromatography." The inventors found that leaching can be minimized by performing chromatography at temperatures between 10-18°C (the specification also disclosing a broader range of 3-20°C). Claim 1 of the '799 patent is representative:

A method of purifying a protein which comprises CH2/CH3 region, comprising subjecting a composition comprising said protein to protein A affinity chromatography at a temperature in the range from about 10°C to about 18°C.

The primary references asserted by Hospira in its IPR was International Publication No. WO 95/22389 and a scientific reference contributed by van Sommeren and colleagues to a treatise entitled Effects of Temperature, Flow Rate and Composition of Binding Buffer on Adsorption of Mouse Monoclonal IgG1 Antibodies to Protein A Sepharose 4 Fast Flow, 22 PREPARATIVE BIOCHEMISTRY 135 (1992), as well as other secondary references that were applied in combination with the '389 PCT publication for the Board's obviousness determinations. The '389 PCT publication disclosed Protein A purification of antibodies performed at room temperature, defined as 18-25°C, which overlapped with the '799's temperature range of from about 10°C to about 18°C. The Board held all claims in IPR (1-3 and 5-11) to be anticipated by the '389 PCT publication or obvious in light of the '389 PCT publication or the van Sommeren reference as primary reference, in combination with other secondary references. Genentech appealed and also challenged the constitutionality of applying IPRs retroactively in view of the '799 patents priority date; the Federal government intervened to address this issue on appeal.

The Federal Circuit affirmed, in an opinion by Judge Chen joined by Chief Judge Prost; Judge Newman dissented. Regarding the Board's anticipation decision, the Federal Circuit relied on the overlap of the temperature ranges, on the basis that the method disclosed in the '389 PCT publication was directed to purifying antibodies comprising the CH2/CH3 region and included a Protein A purification step performed at room temperature, defined in the specification as the range of 18-25°C. The Federal Circuit's opinion states that "[a] prior art reference that discloses an overlapping but different range than the claimed range can be anticipatory, even where the prior art range only partially or slightly overlaps with the claimed range," citing Ineos USA LLC v. Berry Plastics Corp., 783 F.3d 865, 870–71 (Fed. Cir. 2015). The question that a court must answer, according to the opinion, is "whether the patentee has established that the claimed range is critical to the operability of the claimed invention," citing Ineos and E.I. DuPont de Nemours & Co. v. Synvina C.V., 904 F.3d 996, 1008 (Fed. Cir. 2018). The Board found that Genentech had not carried this burden and (curiously, perhaps) Genentech did not challenge this finding on appeal.

The Board also found that the '389 PCT publication taught that Protein A column chromatography was performed throughout at room temperature (18-25°C, i.e., the overlapping temperature range). Genentech attempted to challenge this interpretation on the ground that "room temperature" as disclosed in the '389 PCT publication was precisely that, the temperature of the room in which the chromatography was performed and not the temperature of the components, buffers, etc. used in the purification. Genentech based this argument in part on the temperature of the source material to be subjected to chromatography (i.e., antibody preparations from cells cultured at 37°C) in the absence of instructions in the '389 PCT publication to cool this material to "room temperature" and relied on testimony from its expert. Hospira's expert, on the contrary, argued that those of skill in the art would perform chromatography at "ambient" (room) temperature. The Federal Circuit majority held that "substantial evidence supports the Board's finding that the HCCF subject to protein A affinity chromatography in WO '389 is within the claimed temperature range of claim 1." The majority identified portions of Genentech's expert's testimony that it disagreed with (correctly, in the majority's view) and held that "to the extent the experts disagreed with one another, the Board reasonably chose to credit the testimony of [Hospira's expert] over the testimony of [Genentech's expert], another instance where the deference the Court is mandated to give fact questions to the Board under Dickinson v. Zurko was dispositive. The Federal Circuit majority also rejected Genentech's argument that the Board's decision was contrary to the Court's precedent (thus converting the issue to a question on law) and affirmed the Board's determination that Genentech's claims were invalid for anticipation by the disclosure in the '389 PCT publication.

Turning to the Board's decision that the claims were also obvious over the combination of the disclosure of the '389 PCT publication in combination with a variety of other prior art references, the panel majority relied on their precedent that "[i]f the relevant comparison between a disputed claim limitation and the prior art pertains to a range of overlap-ping values, 'we and our predecessor court have consistently held that even a slight overlap in range establishes a prima facie case of obviousness,'" citing In re Peterson, 315 F.3d 1325, 1329 (Fed. Cir. 2003). This has the effect of raising a presumption of obviousness, according to the opinion, thus shifting the burden on the patentee to rebut the presumption (which the Board held Genentech did not do and the panel majority affirmed). Genentech neither showed that the temperature range was critical to the invention nor that the prior art did not recognize temperature as being "result-effective" (two ways to achieve the required rebuttal). This latter stratagem was ineffective in the Board's view because the prior art understood Protein A leaching to be the result of proteolysis, and that proteolysis was affected by temperature. Moreover, according to the Court, "[t]he Board reasonably found that a skilled artisan would have been motivated to optimize the temperature given the teachings of the prior art, and that given the ease with which temperature can be varied, finding an optimal temperature range would have been nothing more than routine experimentation." The panel majority rejected Genentech's argument that the purported desire to reduce Protein A leaching was relevant only in large-scale, industrial applications of the technique, not at least because Genentech's claim was not limited to these circumstances.

Finally, the Board held that the objective indicia of nonobviousness did not change their conclusion that Genentech's claims were obvious, and the panel majority affirmed this determination.

The majority's opinion closes with the Court's rejection of Genentech's challenge that inter partes review are an unconstitutional violation of the Fifth Amendment (for reasons substantially identical to the Court's earlier opinion in Celgene Corp. v. Peter, 931 F.3d 1342, 1356–63 (Fed. Cir. 2019)), nor the Seventh Amendment nor Article III.

Judge Newman dissented, on the basis inter alia that the invention had actually solved a real world problem and that the majority's affirmance ignored the value the invention brought to the art. "The court presents a hindsight determination that this apparently simple solution to a difficult problem is anticipated and obvious, although it was not known or obvious to the scientists who were attempting to solve the problem of leaching contamination, and the experts for both sides agreed that the solution presented in the '799 patent was new to them," Judge Newman writes. She sees the complexities involved in arriving at this solution, and the failure in the art to disclose the solution rebuts, for the Judge the Board's invalidation on anticipation and obviousness grounds. On the merits, Judge Newman discounts the overlap at 18°C as supporting anticipation, because her understanding of the law would require the temperature range disclosed in the '389 PCT publication (18-25°C) to be the same as the claimed temperature range (10-18°C). And Judge Newman rejects the "optimization" basis for the Board's obviousness determination (and the majority's affirmance), stating that:

[T]he question is not whether it would have been easy to cool the material to the 10°C - 18°C range; the question is whether it would have been obvious to do so. Contrary to the Board's and the court's view, this is not a matter of optimizing a known procedure to obtain a known result; for it was not known that cooling the material for chromatography would avoid contamination of the purified protein with leached protein A.

Genentech, Inc. v. Hospira, Inc. (Fed. Cir. 2020)
Panel: Chief Judge Prost and Circuit Judges Newman and Chen
Opinion by Circuit Judge Chen; dissenting opinion by Circuit Judge Newman

Posted at 11:28 PM in Federal Circuit, Novelty, Obviousness, Post-Grant Proceedings | Permalink | Comments (0)

January 12, 2020

Becon Medical, Ltd. v. Bartlett (E.D. Pa. 2019)

By Donald Zuhn –-

Last month, in Becon Medical, Ltd. v. Bartlett, Senior District Judge Jan E. Dubois of the U.S. District Court for the Eastern District of Pennsylvania denied a motion to stay filed by Defendants Scott P. Bartlett, M.D. and TalexMedical, LLC ("TalexMedical"). In denying TalexMedical's motion, the District Court concluded that all three factors for determining whether to stay an action pending inter partes review weighed against granting a stay.

Plaintiffs Becon Medical, Ltd. and Henry Stephenson Byrd, M.D. ("Becon") initiated the dispute between the parties by filing suit against TalexMedical for infringement of U.S. Patent Nos. 8,167,942 and 8,852,277, contending that TalexMedical infringed the patents by making and selling its non-surgical infant ear correction device, InfantEar (Becon makes and sells the EarWell device). TalexMedical was served with Becon's complaint on October 10, 2018, and filed its motion to stay approximately three weeks before it requested IPR on October 9, 2019. By the time TalexMedical requested IPR, the parties had completed fact discovery, the Court had conducted a Markman hearing, and the Court had construed the disputed claim terms.

The District Court noted that in determining whether to stay an action pending an IPR, courts consider three factors: (1) whether a stay would unduly prejudice or present a clear tactical disadvantage to the non-moving party; (2) whether a stay will simplify the issues in question and trial of the case; and (3) whether discovery is complete and whether a trial date has been set. With respect to the first factor, the District Court noted that courts look to four sub-factors: (1) the timing of the request for IPR; (2) the timing of the request for stay; (3) the status of the IPR proceedings; and (4) the relationship of the parties.

In assessing the sub-factors to be considered with respect to the first factor, the District Court indicated that TalexMedical waited until "the last possible day before the statutory deadline" to request IPR, and that "[d]efendants offer no reason for filing their IPR petitions just before the deadline." The Court also noted that Becon filed its Initial Infringement Contentions approximately seven months before TalexMedical filed for IPR, and that "defendants do not explain the near seven-month delay in filing for IPR after they learned of plaintiffs' infringement contentions." In view of the above, the Court found "that the timing of defendants' request for IPR suggests that defendants are seeking an inappropriate tactical advantage," and determined that this sub-factor (the timing of the request for IPR) weighed against granting a stay.

With respect to the second sub-factor (the timing of the request for stay), the District Court determined that because TalexMedical filed its motion to stay approximately three weeks before it filed for IPR, this sub-factor weighed in favor of granting a stay. However, because the PTAB had not yet instituted review, and the IPR proceedings could extend into early 2021 if review was instituted, the Court determined that the third sub-factor (the status of the IPR proceedings) weighed against granting a stay.

Moving to the fourth and final sub-factor (the relationship of the parties), the District Court began by noting that courts are reluctant to stay proceedings where parties are direct competitors because "[w]here parties are direct competitors, a patent infringer can take market share and build brand loyalty while the case is pending, and these injuries may not be recoverable in damages or later injunctive relief" (citing Zillow, Inc. v. Trulia, Inc., No. C12-1549JLR, 2013 WL 5530573, at *6 (W.D. Wash. Oct. 7, 2013)). In this case, the Court indicated that the parties are direct competitors since they both make non-surgical infant ear correction devices that are marketed and sold to physicians, and therefore, that Becon would likely be unduly prejudiced by a stay. The Court also noted that Becon had presented strong evidence of willful infringement, and while acknowledging that willful infringement is not traditionally considered by courts in determining whether to grant a stay (and despite noting that Becon did not move for a preliminary injunction), the Court found that the evidence of willful infringement "is relevant to the exercise of its discretion." The Court therefore concluded that the fourth sub-factor weighed against a stay, and because three of the four sub-factors weighed against granting a stay, determined that the first factor weighed against granting a stay.

Turning to the second factor (whether a stay will simplify the issues in question and trial of the case), the District Court noted that courts in the Third Circuit have generally held that this factor weighs against a stay when the PTAB has not yet decided whether to institute IPR proceedings. Because the PTAB had not yet decided whether to institute IPR proceedings, the Court concluded that the second factor weighed against granting a stay.

Finally, with respect to the third factor (whether discovery is complete and whether a trial date has been set), the District Court pointed out that while expert discovery had not yet been completed and a trial date had not yet been set, fact discovery had been completed, the Court had conducted a Markman hearing, and the Court had construed the disputed claim terms. Thus, the District Court determined that both the Court and the parties had already expended significant resources, which weighed against granting a stay.

Having concluded that all three factors weighed against granting a stay, the District Court therefore denied Defendants' Motion to Stay the litigation pending IPR.

Becon Medical, Ltd. v. Bartlett (E.D. Pa. 2019)
Memorandum by Senior District Judge Dubois

Posted at 10:59 PM in District Court, Post-Grant Proceedings | Permalink | Comments (0)

January 05, 2020

January 02, 2020

October 31, 2019

Federal Circuit Holds APJs Are Principal Officers

By Kevin E. Noonan and James L. Lovsin --

Today in Arthrex, Inc. v. Smith & Nephew, Inc., a three-judge panel of the Federal Circuit held that the way the U.S. Patent and Trademark Office has appointed administrative patent judges at the Patent Trial and Appeal Board violates the Appointments Clause of the Constitution (Art. II, sec. 2, cl. 2), in an opinion by Judge Moore, joined by Judges Reyna and Chen. According to the opinion, because APJs are principal officers they must be nominated by the President and confirmed by the Senate. Although the opinion provides a remedy (having Congress abrogate the portion of the Patent Act restricting removal of the APJs), the legitimacy of the PTAB to render decisions in the meantime has been abrogated by the Court, and the effect on (1) pending PTAB proceedings, (2) pending appeals of PTAB decisions at the Federal Circuit and the Supreme Court, and (3) the thousands of judgments by the PTAB since passage of the Leary-Smith America Invents Act is uncertain. District court litigation stayed in favor of a PTAB proceeding may also be impacted.

This decision will be the subject of a future post.

Posted at 10:08 PM in Federal Circuit, Patent Trial and Appeal Board, Post-Grant Proceedings | Permalink | Comments (1)

October 28, 2019

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

Posted at 11:28 PM in Novelty, Patent Trial and Appeal Board, Post-Grant Proceedings | Permalink | Comments (0)

October 23, 2019

USPTO Issues Proposed Rules on Burden of Proof for Motions to Amend in Post-Grant Proceedings

By Joshua Rich --

When post-grant proceedings under the America Invents Act began, the USPTO's Patent Trial and Appeals Board ("PTAB") treated motions to amend in those proceedings like most other motions: the movant, here the patentee, bore the burden of production of evidence and the burden of persuasion on the issue of patentability of the proposed substitute claims. Then, the Federal Circuit's decision in Aqua Products[1] in 2017 made it clear that there was no such rule allocating the burden of persuasion. Since then, the PTAB has required the petitioner in post-grant proceedings to persuade it that the proposed amended claims are not patentable. The USPTO now seeks to codify that standard in its regulations, amending the rule only to allow itself discretion in rare circumstances.

The proposed regulations (37 CFR §§ 42.121 and 42.221) include three basic points. First, the patentee will still bear the burden of persuasion by a preponderance of the evidence on certain procedural points: that there are a reasonable number of substitute claims, that the amendment does not broaden the scope of the claims, that there is written description support for the new claims, and the like. Second, the petitioner will then bear the burden of proof to show by a preponderance of the evidence that the proposed substitute claims would be unpatentable. Third, the PTAB retains discretion to grant or deny any motion to amend in the interests of justice, so long as the reason for its decision is supported by the evidence of record.

The road to the proposed regulations started with the Federal Circuit's Aqua Products case.[2] Although the Court was fractured, Judge O'Malley explained in the lead opinion the points of general agreement:

The only legal conclusions that support and define the judgment of the court are: (1) the PTO has not adopted a rule placing the burden of persuasion with respect to the patentability of amended claims on the patent owner that is entitled to deference; and (2) in the absence of anything that might be entitled deference, the PTO may not place that burden on the patentee.

872 F.3d at 1327. In a separate opinion -- also joined by a majority of the judges -- Judge Reyna noted that the lack of any rule on the burden of persuasion did not extend to the burden of production:

There is no disagreement that the patent owner bears a burden of production in accordance with 35 U.S.C. § 316(d). Indeed, the Patent Office has adopted regulations that address what a patent owner must submit in moving to amend the patent.

Id. at 1341. Thus, Aqua Products found that the patentee had been assigned the burden of production on motions to amend, including with regard to the formalities set forth in the regulations. However, it found the patentee did not bear the ultimate burden of persuasion on patentability.

The PTAB then brought its decisions in line with the Federal Circuit's holdings and placed the burden of persuasion on the petitioner in post-grant proceedings. However, it made it clear that the "Board itself may justify any finding of unpatentability by reference to evidence of record in the proceeding," such as when the petitioner has stopped prosecuting the case due to settlement. See Western Digital Corp. v. SPEX Techs., Inc., Case Nos. IPR2018-00082, -00084 (P.T.A.B. Apr. 25, 201) (Paper 13). The USPTO also sought comments from the public on two questions related to the burden of proof for motions to amend. First, should it engage in formal rulemaking to codify its decision in Western Digital? Second, if the burdens are allocated as set forth in Western Digital, when should the Board itself act to justify unpatentability?

The USPTO received 49 comments, 25 of which provided specific answers to the questions it posed. The vast majority of the specific responses were in favor of rulemaking, and a smaller majority suggested that the rules should mirror the Western Digital decision. Similarly, a substantial majority believed that the PTAB should not be limited to any specific posture of the proceedings in which to exercise discretion on patentability. However, two believed that the PTAB should never be permitted to exercise discretion and three believed that it should only be permitted to do so in certain factual scenarios (such as when the petitioner stops participating).

Thus, the USPTO promulgated the draft rules. In doing so, it suggested that the PTAB will rarely exercise its discretion to find a lack of patentability on its own, most likely when the petitioner stops participating (including due to settlement) or when it does not oppose the motion to amend. Importantly, however, the reasons for refusing an amendment must already appear in the record and be in the interests of justice. On the other hand, even if the patentee fails to make its required showings in its motion to amend, the PTAB can exercise its discretion to allow amendment in the rare situation it believes justice suggests it do so if the evidence needed to permit the amendment is already in the record.

The draft rules are open for comment until December 23, 2019. Given Director Iancu's push to make amendment a viable option in post-grant proceedings, however, it is likely that they will be adopted relatively quickly and in similar form to the draft rules.

[1] Aqua Prods., Inc. v. Matal, 872 F.3d 1290 (Fed. Cir. 2017) (en banc).

[2] A complete summary of the Aqua Products case can be found at https://www.patentdocs.org/2017/10/aqua-products-inc-v-matal-fed-cir-2017.html

Posted at 11:05 PM in Patent Trial and Appeal Board, Post-Grant Proceedings | Permalink | Comments (0)

October 08, 2019

OSI Pharmaceuticals, LLC v. Apotex Inc. (Fed Cir. 2019)

By Kevin E. Noonan --

Last week, the Federal Circuit overturned an obviousness determination in an inter partes review by the Patent Trial and Appeal Board in OSI Pharmaceuticals LLC v. Apotex Inc. The Court also reaffirmed its holdings in earlier-decided cases that applying the IPR portion of the Leahy-Smith America Invents Act to patents arising from applications filed before enactment of the AIA is not unconstitutional.

The challenged patent, U.S. Patent No. 6,900,221, was listed in the Orange Book for OSI's cancer treatment Tarceva® (erlotinib), an epidermal growth factor receptor (EGFR) inhibitor used in the treatment of non-small cell lung cancer (NSCLC). The opinion explains that NSCLC was the leading cause of cancer deaths in 2001, amounting to greater than one million cases. At that time, chemotherapy was the standard therapy but was limited by the toxicity of most cancer chemotherapeutic agents, which showed little specificity in killing normal as well as cancer cells.

Efforts during the timeframe of the earliest claimed priority date of the '221 patent were directed to EGFR inhibitors, but (importantly for the Court's decision) the opinion notes that "many of these [EGFR inhibitors] failed in clinical trials." One reason for these negative outcomes, according to the opinion, is that "[c]ancer treatment is highly unpredictable" and that while some promising compounds were effective in vitro, such successes were "a poor proxy for how effective that drug actually was in treating cancer in vivo (i.e., in the body)" (the opinion citing several reasons for these results). The opinion also recites the regulatory hurdles prospective drugs much overcome, and that "[a] great majority of therapies for NSCLC failed in clinical trials" (including the 1,631 new drugs for treating NSCLC between 1990 and 2005, and the mere 7 that were approved by the FDA, one of which was OSI's erlotinib).

Before the Patent Trial and Appeal Board, Petitioner challenged claims 44-46 and 53 of the '221 patent for being unpatentable as obvious:

44. A method for the treatment of NSCLC (non small cell lung cancer), pediatric malignancies, cervical and other tumors caused or promoted by human papilloma virus (H[P]V), Barrett's esophagus (pre-malignant syndrome), or neoplastic cutaneous diseases in a mammal comprising administering to said mammal a therapeutically effective amount of a pharmaceutical composition comprised of at least one of N-(3-ethynylphenyl)-6,7-bis(2-methoxyethoxy)-4-quinazolinamine, or pharmaceutically acceptable salts thereof in anhydrous or hydrate forms, and a carrier.

45. The method of claim 44, wherein the treatment further comprises a palliative or neo-adjuvant/adjuvant monotherapy.

46. The method of claim 44, wherein the treatment further comprises blocking epidermal growth factor receptors (EGFR).

53. The method of claim 44 for the treatment of non-small cell lung cancer (NSCLC).

The asserted prior art disclosed "a class of '4-(substituted phenylamino)quinazoline derivatives which are useful in the treatment of hyperproliferative diseases, such as cancers, in mammals" (Schnur); a scientific review article summarizing studies related to cell signaling mechanisms and molecules like EGFR involved therein with regard to malignant tumors (Gibbs); and OSI's 10-K filing with the Security and Exchange Commission. Schnur discloses 105 different compounds including erlotinib (a "preferred" compound) and that this compound could be used as a treatment for cancers of many tissues, including lung (but not specifically NSCLC). Gibbs discloses that erlotinib was in clinical development, with "good anti-cancer activity in preclinical models." The Gibbs reference discloses other references that did not reference erlotinib for use in treating NSCLC and had no data regarding the use of erlotinib for treating NSCLC. OSI's 10-K discloses the company's efforts to obtain FDA approval of erlotinib for treating NSCLC (as well as several other tumor types). This disclosure was limited to Phase I and Phase II clinical trials and there were no clinical trial data in the document.

The Board held that "a person of ordinary skill 'would have combined Gibbs or OSI 10-K with Schnur and had a reasonable expectation of success of achieving the invention of challenged claims 44 and 53.'" Specifically, the Board found that all the limitations of claims 44 and 53 were disclosed in the Schnur reference except treatment of NSCLC with erlotinib, and this element of the claims was disclosed in OSI's 10-K or in the Gibbs disclosure that erlotinib "appear[s] to have good anti-cancer activity in preclinical models, with an acceptable therapeutic index particularly in patients with non-small cell lung cancer" (albeit without any disclosure of clinical data to support these activities). The Board entered judgment in the IPR that claims 44-46 and 53 were invalid for obviousness, and OSI appealed.

The Federal Circuit reversed, in an opinion by Judge Stoll, joined by Judges Newman and Taranto. While acknowledging that the Board's factual findings were due deferential, "substantial evidence" review, citing Dickinson v. Zurko, 527 U.S. 150, 162 (1999), "'[m]ere speculation' is not substantial evidence," citing Intellectual Ventures I LLC v. Motorola Mobility LLC, 870 F.3d 1320, 1331 (Fed. Cir. 2017). The panel used the district court standard to illustrate that "substantial evidence is not a fixed quantum of evidence, and may only be determined with respect to the standard of proof," citing Eli Lilly & Co. v. Aradigm Corp., 376 F.3d 1352, 1363 (Fed. Cir. 2004) (although the relevance to the issue before the Court is not immediately apparent). Nevertheless, the opinion states that "[t]he same point logically applies to review of the Board's finding," citing In re Hotels.com, L.P., 573 F.3d 1300, 1302 (Fed. Cir. 2009).

Applying these standards, the panel held that the Board's finding was not supported by substantial evidence because:

As an initial matter, in reaching its conclusion, the Board misinterpreted the asserted references to teach more than substantial evidence supports. When the references are properly read, the Board's finding that the asserted references provide a reasonable expectation of success also is not supported by substantial evidence. To be clear, the claims require only treatment of a mammal with erlotinib—efficacy in humans is not required. But the asserted references do not disclose any data or other information about erlotinib's efficacy in treating NSCLC. The record does not contain any clinical (human) data or pre-clinical (animal) data. It does not even include in vitro (test tube) data regarding erlotinib's effect on NSCLC. At the same time, it is undisputed that NSCLC treatment was highly unpredictable with an over 99.5% rate of failure for drugs entering Phase II clinical studies. On this record, we are not persuaded that a reasonable factfinder could conclude that a person of ordinary skill would have reasonably expected success based on the combination of Schnur and Gibbs or Schnur and OSI's 10-K.

The opinion then sets out, for each reference, the deficiencies in the Board's understanding of the references and why alone or in combination they don't support an obviousness determination by substantial evidence. Gibbs, according to the panel, is merely a reference article with no independent data of its own, and the data of others it does disclose does not include data showing that erlotinib could be used to treat NSCLC. The references cited by Gibbs (who submitted a declaration in support of patentee during the IPR) that disclosed erlotinib did not disclose its use for treating NCSLC and the references disclosing NSCLC treatments did not disclose erlotinib, according to the opinion.

Turning to the question of whether the cited art would provide the required reasonable expectation of success, the panel held that "properly read" the cited art did not. Regarding the combination of the Schnur and Gibbs references, "the asserted references do not disclose any information about erlotinib's efficacy in treating NSCLC in a mammal" according to the Court. The Schnur reference "fails to disclose any in vitro or in vivo efficacy data for erlotinib or otherwise suggest the use of erlotinib to treat NSCLC" and Gibbs, "[p]roperly read in context,[] discloses only that erlotinib inhibits the EGFR and has good anti-cancer activity in some cancers, not including NSCLC." The absence of any data "or other promising information regarding erlotinib's efficacy in treating NSCLC," combined with the "highly unpredictable nature of treating NCSLC" precluded in the Court's view these references from providing the skilled worker with a reasonable expectation of success regarding the claimed inventive methods.

With regard to the combination of the Schnur reference and OSI's 10-K document, the Court found fault with the Board's reliance on the existence of Phase I and Phase II clinical trials in the 10-K document, again without any data or reference to data showing that erlotinib could successfully treat NSCLC. The panel also placed the Board's reliance on the 10-K statements in the context of the failure of 1,630 putative EGFR-directed anti-cancer compounds (a 99.5% failure rate), and faulted the Board for not considering this evidence when weighing the reasonableness of any likelihood for success the 10-K disclosed information would have had on the skilled artisan. "These references provide no more than hope—and hope that a potentially promising drug will treat a particular cancer is not enough to create a reasonable expectation of success in a highly unpredictable art such as this" according to the opinion.

The United States intervened over OSI's other grounds for appeal, questioning the constitutionality of subjecting to inter partes review proceedings patents arising from applications filed before passage of the Leahy-Smith America Invents Act. The opinion notes that only after oral argument in this case did the Federal Circuit decide that applying IPR to pre-AIA patents is not a constitutional violation, in Celgene Corp. v. Peter, 931 F.3d 1342, 1362 (Fed. Cir. 2019); and Arthrex, Inc. v. Smith & Nephew, Inc., No. 2018-1584, 2019 WL 3938271, at *7 (Fed. Cir. Aug. 21, 2019). In the face of this precedent, OSI conceded and the panel entered judgment in accordance with its earlier decisions that applying the IPR statute to pre-AIA patents is not unconstitutional.

OSI Pharmaceuticals, LLC v. Apotex Inc. (Fed Cir. 2019)
Panel: Circuit Judges Newman, Taranto, and Stoll
Opinion by Circuit Judge Stoll

Posted at 11:59 PM in Federal Circuit, Obviousness, Post-Grant Proceedings | Permalink | Comments (0)

October 01, 2019

Honeywell Int'l v. Arkema Inc. (Fed. Cir. 2019)

By Donald Zuhn --

Today, in Honeywell Int'l v. Arkema Inc., the Federal Circuit vacated a combined Final Written Decision by the U.S. Patent and Trademark Office Patent Trial and Appeal Board in two post-grant review proceedings finding that claims 1-20 of U.S. Patent No. 9,157,017 were unpatentable. The Federal Circuit also remanded to the Board to authorize Honeywell International Inc. to file a motion seeking leave to petition the Director for a Certificate of Correction.

The '017 patent, which is owned by Honeywell and which is directed to fluoroalkene compounds used in refrigeration systems and other applications, recites a chain of priority applications dating back to 2002, all of which were incorporated by reference into the '017 patent. During prosecution of the application that issued as the '017 patent, Honeywell filed a preliminary amendment in which it cancelled all of the claims included in the original application and added new claims directed to different subject matter (i.e., automobile air conditioning systems), but failed to make corresponding amendments to the list of priority applications.

Four months after the '017 patent issued, Arkema Inc. filed two petitions for post-grant review of the '017 patent, asserting in both petitions that the priority applications listed on the face of the '017 patent did not provide written description support for the issued claims. Arkema argued that as a result, the claims of the '017 patent were only entitled to the March 26, 2014 filing date of the application from which the '017 patent issued (as opposed to a 2002 priority date), that the '017 patent was therefore eligible for PGR proceedings, and that several prior art references from 2002 to 2014 rendered the claims of the '017 patent unpatentable. The Board instituted both PGR's.

Honeywell, which asserted that it had first realized the priority chain mistake when preparing its Patent Owner Response, requested permission to file a motion for leave to request a Certificate of Correction to amend the priority claim of the '017 patent. The Board rejected Honeywell's request for authorization to file a motion for leave, indicating that Honeywell had failed to meet the requirements of 35 U.S.C. § 255, and the proceedings before the Board continued until the Board issued a combined Final Written Decision finding claims 1-20 of the '017 patent to be unpatentable. Honeywell appealed to the Federal Circuit.

On appeal, the Federal Circuit wasted little time in "conclud[ing] that the Board abused its discretion by assuming the authority that 35 U.S.C. § 255 expressly delegates to the Director: to determine when a Certificate of Correction is appropriate." The Court noted that pursuant to § 255, patentees may petition the Director to issue a Certificate of Correction to correct "a mistake of a clerical or typographical nature, or of minor character, which was not the fault of the Patent and Trademark Office," and that the patentee must show that the mistake "occurred in good faith" and that "the correction does not involve such changes in the patent as would constitute new matter or would require re-examination." The Court also noted that when a patentee seeks to correct a patent during a post-grant proceeding, the patentee must seek authorization from the Board to file a motion, and if authorization is granted, file a motion with the Board, asking the Board to cede its exclusive jurisdiction so that the patentee can seek a Certificate of Correction from the Director.

The Court, however, explained that "Section 255 does not grant the Board authority to determine whether a mistake in an issued patent is of 'minor character' or 'occurred in good faith,'" adding that this "authority is expressly granted to the Director," and "[t]he Director has not delegated its Section 255 authority to the Board, but has instead promulgated procedures by which patentees may seek the Board's leave to petition the Director for a Certificate of Correction." In the instant case, the Court noted that:

[T]he Board did not review Honeywell's motion for leave to seek a Certificate of Correction from the Director to determine if Honeywell had demonstrated a "sufficient basis" that the mistake "may" be correctable. Instead, the Board prohibited Honeywell from even filing a motion for leave. The Board refused to authorize Honeywell to file a motion for leave because "at this juncture there has been a failure to show that [the] requirements of 255 have been met."

The Court determined that by requiring Honeywell show that the requirements of § 255 had been met before authorizing Honeywell to file a motion for leave to seek a Certificate of Correction from the Director, the Board abused its discretion. The Court also pointed out that the Board lacked the information necessary to make a reasoned decision, and failed to provide an explanation or a reasoned basis for its decision, which impeded meaningful review on appeal. Moreover, the Court pointed out that it could "find nothing in the record, or in the Board's conclusory decision, that warrants denying Honeywell's request to file a motion for leave to petition the Director for a Certificate of Correction correcting the priority chain of the '017 patent."

The Court therefore concluded that the Board had erred in rejecting Honeywell's request to file a motion for leave to petition the Director for a Certificate of Correction, and vacated the Board's Final Written Decision. The Court also remanded to the Board, indicating that on remand the Board should authorize Honeywell to file a motion seeking leave to petition the Director for a Certificate of Correction, and then review Honeywell's motion for leave to evaluate whether prejudice to Arkema requires accommodation.

Honeywell Int'l v. Arkema Inc. (Fed. Cir. 2019)
Panel: Circuit Judges Newman, Reyna, and Hughes
Opinion by Circuit Judge Reyna

Posted at 11:59 PM in Federal Circuit, Patent Trial and Appeal Board, Post-Grant Proceedings | Permalink | Comments (0)

August 21, 2019

Enzo Life Sciences, Inc. v. Becton, Dickinson and Co. (Fed. Cir. 2019)

By Kevin E. Noonan --

Last week, the Federal Circuit affirmed a decision by the Patent Trial and Appeal Board (PTAB) finding claims of U.S. Patent No. 7,064,197 to be invalid for anticipation or obviousness, in Enzo Life Sciences, Inc. v. Becton, Dickinson and Co. (Fed. Cir. 2019). Because Enzo raised the issue du jour, that subjecting a patent granted prior to enactment of the Leahy-Smith America Invents Act (AIA) to inter partes review (IPR) was unconstitutional, the U.S. government joined the appeal to defend the constitutionality of PTAB proceedings under these circumstances.

Representative claims of the '197 patent read as follows:

1. A non-porous solid support comprising one or more amine(s), hydroxyl(s) or epoxide(s) thereon, wherein at least one single-stranded nucleic acid is fixed or immobilized in hybridizable form to said non-porous solid support via said one or more amine(s), hydroxyl(s) or epoxide(s).

17. An array comprising various single-stranded nucleic acids fixed or immobilized in hybridizable form to a non-porous solid support.

(wherein italicized terms were important to the PTAB decision).

The Board held in a Final Written Decision that all the claims in IPR were invalid for being anticipated by a prior art reference to Fish or obvious by the combination of Fish and secondary references, or a reference to van Prooijen-Knegt ("VPK") with (obviousness) or without (anticipation) reliance on secondary references. The basis for these determinations based on the VPK reference relied, inter alia, on the Board finding that the '197 patent was not entitled to its earliest priority date for failure of the priority application to satisfy the written description requirement for the "non-porous solid support" limitation recited in challenged claims. Enzo appealed.

The Federal Circuit affirmed, in an opinion by Judge Lourie joined by Judges O'Malley and Chen. The panel characterized the teaching of the Fish reference as "a microradioimmunoassay for detecting antibodies that bind to double-stranded DNA ('dsDNA') . . . us[ing] poly-L-lysine ('PLL') 'to facilitate the binding of pure dsDNA to plastic surfaces' [and that] single-stranded DNA ('ssDNA') [was used] in the form of a mixture of synthetic polymers deoxyadenosine ('poly-dA') and deoxycytidine ('poly-dC') or 'denatured calf thymus DNA.'" According to the opinion, all challenged claims required single-stranded DNA to be "capable of binding through Watson-Crick base pairing" (italics in opinion), using a construction the parties agreed upon. This construction was the basis for the Board to decide that the Fish reference anticipated all of the '197 challenged claims, despite Enzo's argument that Fish did not show hybridization (the Board saying that the Fish disclosure just needed to be capable of hybridization according to the claim language). Enzo's expert countered (unpersuasively) that there were interactions that could arise using the methods disclosed in Fish that would preclude hybridization, and without the reference disclosing actual hybridization it was incorrect to presume that hybridization could occur (as required in Enzo's claims). Becton's expert disagreed, basing his testimony on the presumed interaction between the phosphate backbone of the DNA and the positively charged polylysine coating, which would presumably leave the bases available for hybridization.

The Federal Circuit agreed with the Board that the evidence supported their conclusion, characterizing the capacity to hybridize as an inherent property and citing Eli Lilly & Co. v. Barr Labs., Inc. for the proposition that "[a] reference includes an inherent characteristic if that characteristic is the 'natural result' flowing from the reference's explicitly explicated limitations." 251 F.3d 955, 970 (Fed. Cir. 2001) (quoting Cont'l Can Co. USA, Inc. v. Monsanto Co., 948 F.2d 1264, 1269 (Fed. Cir. 1991)). The panel held that the evidence from the experts, as well as the inherent property of single-stranded DNA to hybridize under appropriate conditions, supported the Board's decision that Fish anticipated the challenged claims. The panel also rejected Enzo's allegation that Fish did not disclose an "array" of single-stranded DNA molecules, saying that the Board's determination to the contrary was supported by substantial evidence.

Turning to the Board's decision that certain of the challenged claims were rendered obvious by Fish in view of secondary references, the panel agreed that the additional limitations recited in these claims ("wherein said nucleic acid comprises a nucleic acid sequence complementary to a nucleic acid sequence of interest sought to be identified, quantified or sequenced," or, "wherein said nucleic acid is RNA," or, "wherein said nucleic acids comprise a gene sequence or pathogen sequence") resulted in claims obvious in view of the Fish teachings. With regard to the Board's obviousness determination based on the combination of Fish with other references, the Court affirmed the Board's decision that there was substantial evidence that the skilled worker would have had a motivation to combine the references and a reasonable expectation of success. These references bolstered the teachings in Fish to include covalent linkage between the non-porous support (motivated by greater stability) and to substitute the polyvinyl tray supports disclosed in Fish with properly treated glass supports. The substantial evidence provided by the cited references was supported, according to the panel, by the testimony of Becton's expert witness.

Finally, the panel dealt summarily with Enzo's argument that subjecting patents granted prior to enactment of the AIA to the IPR provisions of the AIA was unconstitutional:

We recently addressed this issue in Celgene Corp. v. Peter, No. 18-1167, 2019 WL 3418549, at *12–16 (Fed. Cir. July 30, 2019), which is now precedent that governs this case. Celgene held that "retroactive application of IPR proceedings to pre-AIA patents is not an unconstitutional taking under the Fifth Amendment." Accordingly, we hold that the retroactive application of IPR proceedings to the '197 patent, which issued before the enactment of the AIA, is not an unconstitutional taking under the Fifth Amendment.

The Supreme Court invited patentees to explore the extent to which IPRs could constitute a Taking under the Fifth Amendment, in its Oil States Energy Services, LLC. v. Greene's Energy Group, LLC decision ("our decision should not be misconstrued as suggesting that patents are not property for purposes of the Due Process Clause or the Takings Clause"). Several patentees having taken the Court up on its invitation, it seems the time is ripe for Supreme Court review of the Federal Circuit's determination that IPRs do not raise constitutional takings issues.

Enzo Life Sciences, Inc. v. Becton, Dickinson and Co. (Fed. Cir. 2019)
Nonprecedential disposition
Panel: Circuit Judges Lourie, O'Malley, and Chen
Opinion by Circuit Judge Lourie

Posted at 11:16 PM in Federal Circuit, Obviousness, Post-Grant Proceedings | Permalink | Comments (0)

July 23, 2019

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

Posted at 09:58 PM in Claim Construction, Federal Circuit, Novelty, Obviousness, Post-Grant Proceedings | Permalink | Comments (0)

June 23, 2019

Power Integrations, Inc. v. Semiconductor Components Industries, LLC (Fed. Cir. 2019)

By Joshua Rich --

In this case, the question ultimately answered by the Federal Circuit was a straightforward question of statutory interpretation: in determining whether a party is time-barred from filing a petition for inter partes review because a privy of that party or the real party in interest was served with a complaint alleging infringement of the challenged patent, at what point in time should privity or party interests be determined? But the route to that answer -- and maybe even the answer itself -- was strongly influenced by the unusual facts of the case. As a result, to prevent possible gamesmanship, the Federal Circuit decided that the litigation-related time bar remains a possibility at least until the U.S. Patent and Trademark Office decides whether to institute inter partes review.

Power Integrations owns U.S. Patent Nos. 6,212,079 and 8,115,457, among others. Fairchild Semiconductor filed two ex parte reexamination proceedings challenging claims of the '079 patent in 2005 and 2006; the U.S. Patent and Trademark Office confirmed the patentability of the claims in September 2009. Two months later, in November 2009, Power Integrations sued Fairchild for infringement of the '079 patent and the '457 patent (and one other patent not at issue here). In March 2014, a jury found that Fairchild infringed claims of the '079 patent (but no claims of the '457 patent), and that the infringed claims were not invalid. The jury awarded $105 million in damages. Fairchild moved post-trial for a new trial on damages, the District Court granted the motion, and the jury on re-trial awarded damages of $139.8 million.[1] Fairchild appealed on both liability and damages; the Federal Circuit affirmed the finding of infringement but vacated the damages award because the entire market value rule should not have been applied and remanded the case for further proceedings.

Just prior to the damages re-trial, in November 2015, Semiconductor Components (which did business as ON Semiconductor) agreed to merge with Fairchild. The Fairchild-ON merger did not close quickly. Instead, in March 2016, ON filed a petition for inter partes review of claims of the '079 patent (including all of the claims that had been found infringed by Fairchild). Five months later, ON filed an IPR petition related to the '457 patent. The Fairchild-ON merger then closed just four days before the IPR related to the '079 patent was instituted on September 23, 2016.

In its Preliminary Responses and Patent Owner's Responses in the IPRs directed to the '079 and '457 patents, Power Integrations argued that ON's petitions were time-barred by 35 U.S.C. § 315(b). Section 315(b) provides:

An inter partes review may not be instituted if the petition requesting the proceeding is filed more than 1 year after the date on which the petitioner, real party in interest, or privy of the petitioner is served with a complaint alleging infringement of the patent. The time limitation set forth in the preceding sentence shall not apply to a request for joinder under subsection (c).

35 U.S.C. § 315(b) (emphasis added). Power Integrations argued that Fairchild and ON were in privity when the petitions were filed because of the announced merger, and that Fairchild had been served in an earlier lawsuit more than one year before the filing of the petitions (indeed, it was served more than one year prior to the enactment of the America Invents Act, which created IPRs). The only issue was whether privity existed; the Patent Trial and Appeal Board found upon institution that Fairchild's lack of control and involvement in the filing of the petition outweighed the announced (and by then, closed) merger. Power Integrations also argued that ON was acting as Fairchild's proxy, but the PTAB found ON had its own interest arising out of the pending multi-billion-dollar merger with Fairchild. Finally, in the Patent Owner's Response, Power Integrations argued that the closing of the merger prior to institution meant that the petitions should be time-barred. But the PTAB, relying on a pair of earlier nonprecedential opinions, found that the facts as of the date of filing would control the time bar inquiry, not facts that developed later.

In both IPRs (the one related to the '079 patent and the one related to the '457 patent), the PTAB issued a final written decision in which all of the challenged claims were found unpatentable. It therefore cancelled all of the challenged claims, including all of the claims of the '079 patent underlying the verdict against Fairchild. Power Integrations appealed the PTAB's decision in the IPR relating to the '079 patent, but not the IPR relating to the '457 patent.

Upon appeal, ON filed a motion to preclude review of the PTAB's § 315(b) decision in the appeal of the decision related to the '079 patent because the same issue had been conclusively determined between the parties when Power Integrations chose not to appeal the PTAB's decision in the IPR related to the '457 patent. Issue preclusion usually prevents review of an issue when the issue has been actually litigated and determined by a valid final judgment and the determination is essential to the judgment, regardless of whether the claim is the same or different. There are exceptions to the general rule, however, including where there is a lack of opportunity or incentive to obtain a full and fair adjudication of the issue earlier. As the Supreme Court has said, "[i]ssue preclusion may be inapt if 'the amount in controversy in the first action [was] so small in relation to the amount in controversy in the second that preclusion would be plainly unfair.'"[2]

The Federal Circuit found that issue preclusion would normally apply to the § 315(b) question before it, but that the exception for lack of incentive to appeal should apply in this case. The '079 patent was the basis for the Fairchild verdict worth over $100 million; the '457 patent was not. Notably, however, in reaching the decision finding this case would be appropriately excepted from issue preclusion, the Court considered that Fairchild had merged and considered the timing of the merger itself -- issues which would appear irrelevant to the questions appropriate for determining incentive to appeal. Further, the Court did not note (and therefore appeared not to consider) that Power Integrations had asserted the '457 patent in the same lawsuit in which it obtained the nine-figure verdict, but had just been unsuccessful. Regardless, in these very specific circumstances,[3] the Federal Circuit panel found that issue preclusion would not apply.

Addressing the merits, the Federal Circuit rejected the PTAB's interpretation of § 315(b) and found that the time-bar should not be limited to the circumstances at the time the petition was filed. The Court focused on the fact that the statute says that an IPR "may not be instituted," and interpreted that as an indication that any privity and real party in interest relationships that arise before institution -- even if after filing of the petition -- should be considered. The statute does not say that a petition cannot be filed, but instead that it may not instituted. In addition to the language of the statute, the Court relied upon its own prior decisions as suggesting that § 315(b) was focused upon institution. But just as importantly, it considered general common law preclusion principles.[4]

Under common law issue preclusion cases, "[c]ourts have repeatedly found privity where, a suit begins, a nonparty acquires assets of a defendant-infringer."[5] Essentially, if a third party were able to acquire rights but avoid the implications of a final judgment related to those rights, it might multiply litigation and prevent a final judgment from being litigated. That is especially true for IPRs, where a privy might be able to benefit from a final written decision without acting timely or incurring the estoppel penalties that serve as a quid pro quo for invoking the IPR process. Therefore, the Court rejected the analogy to jurisdiction, for which federal courts apply a "time-of-filing" rule. The Court also rejected deferring to the U.S. Patent and Trademark Office's interpretation of § 315(b) because the language of the applicable regulation merely parroted the language of the statute.

Notably, while the Federal Circuit panel (Chief Judge Prost and Judges Reyna and Stoll) held that privity can be determined at least as late as the time of institution, it left open the possibility that later events could be relevant to the determination of privity.[6] Of course, the reasoning of the opinion -- based on the express language of the statute -- would be contrary to an extension of the time bar to any time after institution of review. But given the extreme circumstances of the Power Integrations case, the Federal Circuit did not want to cut off the possibility that privity would not have applied if the Fairchild-ON merger had closed five days later. Thus, it is possible that post-institution facts could still be relevant to determining whether an IPR is time-barred, in addition to the certainty that all pre-institution circumstances are to be considered.

Power Integrations, Inc. v. Semiconductor Components Industries, LLC (Fed. Cir. 2019)
Panel: Chief Judge Prost and Circuit Judges Reyna and Stoll
Opinion by Chief Judge Prost

[1] Be careful what you ask for -- the second jury applied the entire market value rule, which was the basis for increased damages.

[2] B & B Hardware, Inc. v. Hargis Indus., Inc., 135 S. Ct. 1293, 1309 (2015) (alteration in original) (quoting Restatement (Second) of Judgments § 28 cmt. j).

[3] The decision went so far as to say, "[w]e have no occasion to consider the preclusive effect of IPR decisions in circumstances different than presented in this case." Slip Op. at 11 n. 6.

[4] To link the issue to common law preclusion principles, the Federal Circuit panel cited jurisprudence and legislative history that indicated that "privity" and "real party in interest" should be defined in line with common law principles. But that really does not support such a link -- the terms can be defined based on the common law without importing common law principles for every aspect of the statute, and no case or portion of the legislative history indicates such a link. It would have been more intellectually rigorous to have relied on common law principles without seeking to rely on the tenuous bridge the definitions of privity and real party in interest.

[5] Slip Op. at 16 (quoting Kloster Speedsteel AB v. Crucible Inc., 793 F.2d 1565, 1583 (Fed. Cir. 1986) (emphasis added), overruled on other grounds by Knorr-Bremse Systeme Fuer Nutzfahrzeuge GmbH v. Dana Corp., 383 F.3d 1337 (Fed. Cir. 2004) (en banc)).

[6] See Slip Op. at 14 n. 8.

Posted at 11:59 PM in Federal Circuit, Post-Grant Proceedings | Permalink | Comments (0)

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