We thank Gary Gutzler, of AlixPartners, for co-authoring this post.

On January 12, 2018 in Exmark Manufacturing Co. Inc., v. Briggs & Stratton Power Products Group, LLC, the Federal Circuit once again addressed the issue of apportioning damages, an area of the law that continues to evolve.  The parties in Exmark are competitors in the commercial lawn mower market.  The patent-in-suit related to a lawn mower with an improved “baffle” that more efficiently directed air flow and grass clippings when the mower was operating. At the conclusion of the jury trial, the defendant’s mower was found to infringe and the jury awarded the plaintiff over $24 million in damages.  On appeal, the Federal Circuit affirmed the method of apportionment utilized by the Plaintiff’s expert, but rejected the expert’s application of that method.

Continue Reading Federal Circuit Approves Apportioning Damages through a Thorough and Reliable Analysis of the Royalty Rate

We can take two valuable lessons from a recent decision of the Federal Circuit:

  1. Review all check boxes on forms when filing a U.S. patent application; and
  2. The United States Patent and Trademark Office is not to blame for deadlines falling on federal holidays.

On February 6, 2018, in Actelion v. Matal, the Federal Circuit affirmed the decision of the district court granting summary judgment in favor of the United States Patent and Trademark Office (PTO).  The dispute centered on the 40-day “A delay” patent term adjustment (PTA) awarded by the PTO to Actelion for U.S. Patent 8,658,675 (“the ‘675 patent”), entitled “Pyridin-4-yl Derivatives.”  Actelion asserted that it was entitled to 45 days of PTA, or alternatively, at least 41 days.

Continue Reading Patent Term Adjustment: Lessons Learned from the Federal Circuit Decision in <i>Actelion v. Matal</i>

The Medicines Company (“MedCo”) appealed findings of no infringement made by the United District Court for the District of Delaware. Hospira cross-appealed the district court’s finding that a distribution agreement did not constitute an invalidating “offer for sale” under 35 U.S.C. § 102(b). In a decision rendered by United States Court of Appeals for the Federal Circuit on February 6, 2018, the Court affirmed the district court’s non-infringement findings and remanded the case for the district court to determine if the on-sale bar applies.

MedCo asserted two patents, U.S. Patent Nos. 7,582,727 and 7,598,343, covering its Angiomax drug product against Hospira, a generic drug maker who filed Abbreviated New Drug Application (“ANDA”) with the Food and Drug Administration. Although Angiomax has been available for decades, MedCo developed a new method of formulating Angiomax to reduce impurities. This formulation was the subject of the asserted patents, both of which were filed on July 27, 2008. Prior to filing the patents, MedCo entered into a distribution agreement on February 27, 2007 with Integrated Commercialization Solutions, Inc. (“ICS”) to distribute the new Angiomax formulation. The agreement stated that MedCo “desire[d] to sell the Product” to ICS and ICS “desire[d] to purchase and distribute the Product.” Under the agreement, title passed to ICS upon receipt of the Product at the distribution center. The district court concluded that the patents were neither infringed nor invalid. The district court found that the invention was ready for patenting at the time of the agreement, but was not sold or offered for sale before the critical date of July 27, 2008 because the distribution agreement between MedCo and ICS did not constitute an offer to sell. Both parties appealed.

Continue Reading <i>The Medicines Company v. Hospira, Inc.</i>

In Drop Stop LLC v. Jian Qing Zhu et al, 2-16-cv-07916 (CACD January 22, 2018), the Central District of California granted Plaintiff’s motion to award attorney fees due to Defendants’ exceptional litigation tactics under 35 U.S.C. § 285.  Initially, counsel for Plaintiff sent a cease and desist email to Defendants to stop selling an infringing product, and attached a draft claim chart in support of its infringement position.  The claim chart included a disclaimer stating “⁠PLEASE NOTE – this informal opinion cannot be relied upon definitively.  A formal opinion is required, and that involves extensive study and other efforts to provide a reliable outcome.  Please call me to discuss.”  However, four days later, Defendants re-listed the accused products and sent Plaintiff an email attaching Plaintiff’s draft claim chart without the disclaimer.  Defendants relied upon Plaintiff’s claim chart to support its non-infringement positions despite not having performed any analysis of their own, and entirely dismissing Plaintiff’s disclaimer, which expressly disclaimed any formal legal opinion.

Continue Reading Improper Reliance on Informal “Opinion of Counsel” Part of Basis for Exceptional Case Award

In an interesting order issued recently in BroadSign International, LLC v. T-Rex Property AB, Judge Swain of the Federal District Court for the Southern District of New York dismissed the Plaintiff’s declaratory judgment of patent non-infringement for a lack of subject matter jurisdiction.  The Plaintiff, BroadSign, is a supplier of “hardware and software solutions for operators of networks of digital displays” and filed its complaint for declaratory judgment against the Defendant, T-Rex, after licensing negotiations stalled between the parties. The declaratory judgment action was based solely on patent infringement lawsuits filed by T-Rex against at least five of BroadSign’s customers.  Although T-Rex had not filed suit against BroadSign itself, BroadSign alleged in its amended complaint that it had received numerous requests for indemnification as a result of T-Rex’s patent enforcement against BroadSign’s customers.  The court concluded that this was insufficient to create subject matter jurisdiction, as there was no “actual case or controversy” between the parties.

Continue Reading Sued Customers Insufficient to Prove a Supplier’s Actual Case or Controversy Against Patentee

Speed is almost always of the essence for the victim of trade secret misappropriation. Many companies ground their business in proprietary information that, if made public, would make the exclusive product or service those companies provide a commodity good. The International Trade Commission provides a lightning fast mechanism to address trade secret misappropriation and stop foreign goods embodying misappropriated trade secrets from entering the United States, and thus it is no surprise that when trade secret misappropriation takes place abroad, companies turn to the ITC for relief. A recent decision by the United States District Court for the Eastern District of Wisconsin makes the ability of the ITC to address trade secret misappropriation even stronger by finding, for the first time, that ITC determinations may have preclusive effect in United States District Court.

Continue Reading International Trade Commission Becomes Even More Potent Venue for Victims of Trade Secret Misappropriation

When trying to overcome an obviousness rejection of a patent claim, an argument that two or more cited references cannot be combined may be used.  For example, it can be argued that the combination is improper because the modification of a reference completely changes its “fundamental principle of operation.”  However, it can be difficult to overcome obviousness rejections using this argument, which is highlighted in a recent Federal Circuit decision in University of Maryland v. Presens.  In this case, the court affirmed an inter partes reexamination (IPR) decision of the Patent Trial and Appeal Board (PTAB) that affirmed the examiner’s rejection of claims in U.S. Patent 6,673,532 (“’532 patent) as obvious despite the plaintiff’s “changes the principle of operation” argument. Although the decision is non-precedential, it provides helpful information to patent practitioners and litigators for arguing obviousness based on changes to a reference’s fundamental principle of operation.

The ’532 patent discloses an optical method of monitoring various cell culture parameters. Claim 1 of the ’532 patent, deemed as representative, reads as follows: Continue Reading Overcoming Obviousness Rejections: Arguing Changes to Fundamental Principle of Operation

Under U.S. patent law, while there is no duty to perform a search of relevant art, inventors and those associated with filing or prosecuting patent applications as defined in 37 C.F.R. § 1.56 have a duty to disclose to the U.S. Patent and Trademark Office (USPTO) all known prior art or other information that may be “material” in determining patentability.  In U.S. patent practice, this duty is deemed satisfied when “material” information is submitted to the USPTO in an information disclosure statement (IDS).  The duty continues until a patent has issued, and importantly, if one fails to live up to this duty, the resulting patent may be deemed unenforceable.

While there is no hard and fast rule as to what information is “material,” a good rule of thumb is to disclose all information that is relevant to the claimed subject matter.  Such information can include other related U.S. patent applications and patents of the applicant or references cited in a PCT or foreign counterpart application.  This article explores when and how to file IDSs in satisfying the duty to disclose “material” information, as well as common mistakes to avoid in IDS filings.

Continue Reading Information Disclosure Statements: When and How to File?

The Federal Circuit’s damages apportionment jurisprudence is an ever-evolving area of the law. On January 10, 2018, a three judge panel of the Federal Circuit revisited the issue in connection with a patent covering a method for providing computer security in the case Finjan, Inc. v. Blue Coat Systems, Inc. While the Federal Circuit affirmed the damages award for 2 of 4 asserted patents, it reversed as to one computer security patent which was found to be infringed by a product that performed both infringing and non-infringing functions.

In calculating damages, the plaintiff sought the reasonable royalty they “would have received through arms-length bargaining.” Lucent Techs., Inc. v. Gateway, Inc., 580 F.3d 1301, 1324

Continue Reading Damages Apportionment For Infringing A Method Claim When The Smallest Saleable Unit Performs Infringing and Non-Infringing Functions

In its first en banc decision of 2018, the Federal Circuit held that “judicial review is available for a patent owner to challenge the U.S. Patent and Trademark Office’s determination that the petitioner satisfied the timeliness requirement of 35 U.S.C. § 315(b) governing the filing of petitions for inter partes review.” Wi-Fi One v. Broadcom (Fed. Cir. 2018) (en banc). The 9-4 decision overruled a contrary conclusion in Achates Reference Publishing v. Apple.

Continue Reading Wi-Fi, One v. Broadcom: En Banc Federal Circuit Held The Time-Bar Determinations (§ 315(b)) Appealable