The Patent Trial and Appeal Board (“PTAB”) issued Final Written Decisions regarding Cisco’s U.S. Patent Nos. 6,377,577 (the “’577 Patent”) and 7,023,853 (the “’853 Patent”) on May 25, 2017 and U.S. Patent No. 7,224,668 (the “’668 Patent”) on June 1, 2017. The PTAB found the ’577 and ’668 Patents invalid but upheld the validity of the ’853 Patent. The Inter Partes Review (“IPR”) proceedings were brought by Arista Networks in retaliation to Cisco’s accusations of infringement brought in multiple venues, including at the U.S. International Trade Commission (“ITC”), which had just a few weeks earlier upheld the validity of these very same patents and determined that Arista infringed the ’577 and ’668 Patents, and issued exclusion and cease and desist orders accordingly. Since the IPR decisions issued Arista has filed a petition asking the ITC to suspend its limited exclusion order regarding the ’577 Patent based on the PTAB’s decision and is expected to file a similar request with respect to the ’668 Patent. On the other side, Cisco plans to appeal the PTAB’s decisions to the Federal Circuit. The uncertainty created by these inconsistent outcomes is an issue for patent owners, and it will be interesting to see how these cases are resolved. In addition, this case shows that even though the ITC does not stay its investigations for IPRs, IPRs may still impact ITC proceedings.
In a unanimous decision issued on June 12, 2017, the Supreme Court for the first time interpreted key provisions of the 2010 Biologics Price Competition and Innovation Act (“BPCIA”). See Sandoz Inc. v. Amgen Inc., No. 15-1195 (U.S. June 12, 2017). The Court’s decision grants more flexibility to biosimilar companies and filers of abbreviated Biologics License Applications (“aBLAs”), holding that (1) a reference product sponsor is not entitled to injunctive relief under federal law for an applicant’s refusal to provide a copy of its aBLA and manufacturing information during the information exchange period contemplated by the BPCIA, and (2) an applicant may provide statutory 180-day pre-launch notice of commercial marketing before its proposed biosimilar product is licensed by FDA. An overview of the parties’ oral arguments before the Court on these issues can be found here.
A flurry of activity from various courts this past week on “exceptional cases” under Section 285 of the Patent Act provided notable guidance for practitioners and patent owners, with a particular emphasis on the motivation and conduct of the litigants. We provide a short synopsis of these cases.
By way of context, in 2014, the Supreme Court in Octane Fitness, LLC v. ICON Health & Fitness, Inc., 134 S. Ct. 1749 (2014), instructed courts to apply a totality of the circumstances test when evaluating whether a case is “exceptional” under 35 U.S.C. § 285. If a case is found to be exceptional within the meaning of the statute, monetary sanctions and fee-shifting may be imposed. This totality of the circumstances analysis was a substantial departure from the previous Federal Circuit tests, which were uniformly viewed as more rigid. Some of the factors the Supreme Court suggested district courts could consider included “frivolousness, motivation, objective unreasonableness (both in the factual and legal components of the case) and the need in particular circumstances to advance considerations of compensation and deterrence.” Our previous discussion of exceptional cases under Section 285 can be found here.
In keeping with recent erosion of patent rights, patent owners’ power to control the post-sale use and sale of their patented products was severely limited this week by the U.S. Supreme Court in the highly anticipated case regarding the patent exhaustion doctrine, Lexmark Int’l, Inc. v. Impression Prods., Inc., No. 15-1189.
As we reported earlier here and here, the Federal Circuit previously provided patent owners with some power to control their patented products—even after an authorized sale. Specifically, the Federal Circuit held, in an en banc decision, that a patent owner’s patent rights are not exhausted if a patented product is sold with a clearly communicated restriction and that an authorized foreign sale of a product does not exhaust the patent owner’s U.S. patent rights to exclude associated with that product.
A recent decision in the Northern District of Illinois gave life to the inevitable disclosure doctrine under the Defend Trade Secrets Act. Inevitable disclosure is a common law doctrine by which a court can prevent a former employee from working for a competitor of his or her former employer where doing so would require the employee to depend upon his or her former employer’s trade secret information. See, e.g., PepsiCo, Inc. v. Redmond, 54 F.3d 1262 (7th Cir. 1995). To date, some commentators have suggested that the inevitable disclosure doctrine is not available under the DTSA because of language in the statute indicating that any injunction granted under the statute to prevent trade secret misappropriation may not “prevent a person from entering into an employment relationship,” and that any conditions placed on employment must be based on “evidence of threatened misappropriation and not merely on the information the person knows.” The Northern District of Illinois’s decision in Molon Motor and Coil Corp. v. Nidec Motor Corp., No. 16 C 03545 (N.D. Ill. May 11, 2017), however, suggests that the inevitable disclosure doctrine may continue to be useful for trade secret plaintiffs asserting claims under the DTSA.
The U.S. Supreme Court announced its ruling in TC Heartland v. Kraft Foods Group Brands LLC on May 22, 2017, a patent infringement case that has garnered national attention for its implications on venue. This case originated with a motion to transfer an action filed in the District of Delaware to the Southern District of Indiana, where the Defendant accused of patent infringement is headquartered. However, the national attention has focused on the possibility that a significant amount of other patent litigation may now shift to the District of Delaware. The U.S. Supreme Court granted certiorari at the end of last year and heard oral arguments in March to address the question of “where proper venue lies for a patent infringement lawsuit brought against a domestic corporation.” The Court has now provided a response to this key question, although a few issues still remain.
On May 10, 2017 and following a Patent Trial and Appeal Board (PTAB) reexamination decision upholding certain claims, the United States Court of Appeals for the Federal Circuit ruled in Cisco Systems, Inc. v. Cirrex Systems, LLC that all of the appealed claims of a fiber optic patent held by Cirrex are invalid for lack of a written description support required by 35 U.S.C. § 112. The panel applied its own construction of a key claim term requiring that a recited functional limitation take place in a specific location which the specification failed to describe.
On May 10, 2017, Amgen filed a complaint in the District of Delaware asserting that, under section 35 U.S.C. § 271(e)(2)(C)(i) of the Biologics Price Competition and Innovation Act (“BPCIA”), Coherus infringed Amgen’s U.S. Patent No. 8,273,707 (the “’707 patent”) by filing an abbreviated Biologic License Application (“aBLA”) for a biosimilar version of Amgen’s Neulasta (pegfilgrastim) product. Amgen asserted that the biosimilar manufacturing process disclosed in the Coherus aBLA will infringe the ’707 patent’s claimed protein purification process.
In its opinion in Aylus Networks, Inc. v. Apple Inc., the Federal Circuit expanded the scope of prosecution disclaimer to statements made by a patent owner during Inter Partes Review (IPR) proceedings. The Court explained that extending the doctrine to cover patent owner statements, made either before or after institution of an IPR, ensures that claims are not argued in one way to maintain patentability and a different way to support infringement allegations. The Court also noted that its conclusion promotes the public notice function of intrinsic evidence and protects the public’s reliance on statements made during IPR proceedings.
The U.S. Patent and Trademark Office (USPTO) is implementing eCommerce Modernization (eMod), as discussed at a Patent Quality Chat webinar on May 9, 2017 (click here for the webinar slides). Highlighted features and the status of the eMod project are described below.
The eMod project will provide a new interface, Patent Center, that combines EFS-Web and PAIR into a single interface for filing and managing patent applications. Benefits of Patent Center include an improved interface and improved processes for submitting, reviewing, and managing patent applications and increased application processing and publication accuracy. The Patent Center aims to be more efficient and have more functionality and features than EFS-Web and PAIR, including: