We first covered the Supreme Court’s grant of certiorari in Oil States Energy Servs., LLC v. Greene’s Energy Grp., LLC, 137 S. Ct. 2239 (2017), a case with the potential to substantially alter the patent litigation landscape, back in June. On Monday, November 27, 2017 the Court heard oral arguments on whether inter partes review – an adversarial process used by the Patent and Trademark Office (PTO) since September 16, 2012 to analyze the validity of existing patents – violates the Constitution by extinguishing private property rights through a non-Article III forum and without a jury.

Advocates and commentators on both sides of the argument weighed in extensively prior to Monday’s argument, culminating in almost 60 amicus curiae briefs, the most of any case this term. Parties urging the Court to reject Oil States’ argument included, for example, the Alliance of Automobile Manufacturers, GE, Apple, the Internet Association (which represents Amazon, Facebook and Google), and the current Solicitor General of the United States, Noel Francisco. On the other side, inventors, venture capitalists, law professors, the Pharmaceutical Research and Manufacturers of America, and the Biotechnology Innovation Organization, amongst others, urged the Justices to abolish inter partes review.  Protesters, including some organized by websites such as www.usinventor.org, gathered outside the Court on Monday to support Oil States armed with signs stating “PTAB Kills American Dreams” and “Innovation: Don’t Kill it!”

Continue Reading Supreme Court Hears Oral Arguments in Oil States Regarding Constitutional Challenge to Inter Partes Review

In June, we covered the Supreme Court’s grant of certiorari in Oil States Energy Servs., LLC v. Greene’s Energy Grp., LLC, 137 S. Ct. 2239 (2017). The Court will decide whether inter partes review – an adversarial process used by the Patent and Trademark Office (PTO) since September 16, 2012 to analyze the validity of existing patents – violates the Constitution by extinguishing private property rights through a non-Article III forum without a jury. With its remarkably high rate of invalidating challenged patents, inter partes review (IPR) has become an effective method for defendants in patent disputes to apply pressure on patent holders, often utilizing serial IPRs to take multiple shots at invalidating patents they infringe. With the potential for IPRs to be declared unconstitutional, some parties have asked courts to stay active litigation until after Oil States is decided. One court in the Northern District of Texas recently denied such a motion to stay in Leak Surveys, Inc. v. FLIR Systems, Inc., 3-13-cv-02897 (TXND 2017-11-13, Order) (Lynn, USDJ). Continue Reading District Court Denies Motion to Stay Pending Supreme Court Decision in Oil States

In a nonprecedential opinion issued on November 13, 2017, the United States Court of Appeals for the Federal Circuit affirmed a district court finding that Apotex’s aBLAs for biosimilar versions of Neulasta® and Neupogen® did not infringe an Amgen protein folding patent. The Federal Circuit affirmed the non-infringement finding despite statements made in Apotex’s pre-litigation letters sent during the parties’ information exchange (i.e., the “patent dance”), which the district court found were controverted by evidence presented by Apotex at trial.

Background

Amgen makes the biologic drugs Neulasta® (pegfilgrastim) and Neupogen® (filgrastim). Apotex submitted aBLAs (“abbreviated Biologics License Applications”) to the FDA seeking approval of biosimilar versions of both drugs under the BPCIA (“Biologics Price Competition and Innovation Act”) framework. The parties engaged in the BPCIA’s “patent dance” information exchange process, whereby Apotex provided Amgen with copies of Apotex’s aBLAs. Amgen ultimately brought suit under 35 U.S.C. § 271(e)(2)(C), (a) and (g), asserting that Apotex’s proposed manufacturing processes would infringe, among others, Amgen’s U.S. Patent. No. 8,952,138 (the ‘138 patent).

The ‘138 patent covers a method of refolding misfolded proteins. This process purportedly allows for large-scale protein refolding using lower reagent volumes than was previously possible. The district court construed (and the Federal Circuit did not reverse) asserted claim 1 of the ‘138 patent to require “refold mixture” protein concentrations above 1.0 g/L. Continue Reading Federal Circuit Evaluates Import of Factual Statements Made During BPCIA Pre-litigation Patent Dance

On November 15, 2017, the United States Court of Appeals for the Federal Circuit resolved a split among district courts on the question whether the United States Supreme Court’s TC Heartland decision constituted a change in the law, or merely a course-correction to honor preexisting law. The Federal Circuit held that the Supreme Court’s decision changed the controlling law. In re: Micron, No. 17-00138 at 13 (Fed. Cir. Nov. 15, 2017).

Micron Technology, Inc. asked the Federal Circuit to set aside the district court’s denial of its motion to dismiss or transfer the case for improper venue. The district court held that Micron waived its objection to venue because it failed to raise an available venue defense in its initial Rule 12 motion to dismiss, and concluded that TC Heartland was not a change in the law.

The Federal Circuit disagreed. It reasoned that the Supreme Court clearly rejected V.E. Holding and concluded that the definition of “resides” in § 1391(c) does not apply to § 1400(b). The Federal Circuit further reasoned that the Supreme Court changed the law by severing § 1400(b) from § 1391(c). As a result, the objection was not “available” under Rule 12(g)(2) when Defendant filed its motion to dismiss in 2016, before TC Heartland came down. On this basis, the Federal Circuit reversed and remanded the case. This decision resolves a previously open question in the wake of TC Heartland that we wrote about here.

In issuing its precedential decision earlier this month in Two-Way Media v. Comcast, the Federal Circuit affirmed a Delaware district court determination that four data streaming patents were directed to ineligible subject matter pursuant to § 101 and the Alice framework. The four related patents (U.S. Patent Nos. 5,778,187, 5,983,005, 6,434,622, and 7,266,686) describe methods and systems for streaming audio/visual data over a communications system (e.g., the Internet) and, in particular, a scalable architecture for delivering real-time information to a number of users, including a control mechanism allowing for management and administration of users intended to receive the real-time information.

Under Alice step one, the Court found that the patents claimed the abstract idea of sending and monitoring the delivery of audio/visual information. The Federal Circuit agreed with this characterization of the claims, finding that the claims used results-based functional language with no articulation of how the particular results are achieved. Two-Way Media also proposed claim constructions that it argued tied the claims to a scalable network architecture. Even after adopting Two-Way Media’s propose constructions, both the District Court and the Federal Circuit found that the constructions, at best, encompassed using generic computer components to carry out the abstract idea and still failed to indicate how the claims themselves “are directed to a scalable network architecture that itself leads to an improvement in the functioning of the system.” (emphasis added) Continue Reading Federal Circuit Affirms Delaware Alice Decision

In an interesting development in the post-TC Heartland world, it appears that the Federal Circuit will soon answer the question whether the Supreme Court’s venue decision was a change in the law, or merely a course-correction to honor preexisting law. Here, in a case arising out of the Eastern District of New York, the Federal Circuit ordered AlmondNet, Inc., Datonics, LLC, and Intent IQ, LLC to respond to a petition for a writ of mandamus submitted by Yahoo Holdings, Inc.  In its petition, Yahoo argued that the District Court erred in denying its motion to transfer, and specifically that it waived the right to challenge venue on the basis that TC Heartland did not change the law of venue.

Continue Reading Yahoo Asks Federal Circuit to Determine Whether TC Heartland Changed, or Merely Clarified, Venue Rules

In Vecco Instruments Inc. v. SGL Carbon, LLC, No. 17-CV-2217 (E.D.N.Y. Nov. 2, 2017), Judge Pamela Chen in the Eastern District of New York recently granted Vecco’s motion for a preliminary injunction enjoining SGL Carbon. The requested injunction sought to prevent SGL Carbon’s further actions related to its likely indirect infringement of Vecco’s asserted patents. Notable in this extensive and detailed 76-page decision is the Court’s discussion of how “long-term and second-order” effects of the accused infringer’s actions can satisfy the “irreparable harm” requirement of the preliminary injunction analysis.

Plaintiff Vecco designs, manufactures, and services LEDs, power electronics, hard drives, and other electronic devices.  It also owns patents related to metal-organic chemical vapor deposition (MOCVD) reactors, a technology that enables high-volume fabrication of metal-organic semiconductor wafers that can be turned into LEDs. Vecco enjoys a large share of the MOCVD market due, in large part, to a distinctive feature of its MOCVD reactors: a removable wafer carrier, typically made of graphite that is mounted on a spindle centrally positioned within the reactor. Vecco authorized SGL Carbon to manufacture these wafer carriers for Vecco and its customers, but in 2013, SGL Carbon began manufacturing wafer carrier for a new entrant into the MOCVD market. Vecco claims this constituted infringement of its MOCVD patents, and sought a preliminary injunction to stop this activity during the pendency of the patent litigation case.

Continue Reading Potential Future Harm to Patent Holder Found to Justify Imposition of Preliminary Injunction

In a precedential opinion issued on October 11, 2017, the United States Court of Appeals for the Federal Circuit reversed the Patent Trial and Appeals Board’s (“PTAB”) finding of non-obviousness where the prior art taught away from some, but not all, of the embodiments covered by the challenged claims.  In Owens Corning v. Fast Felt Corp., No. 2016-2613 (Fed. Cir. Oct. 11, 2017), the panel held that the PTAB had applied an unreasonably narrow construction to the exclusion of embodiments that were not taught away from by prior combinations disclosing all of the claim elements.

PTAB’s Improper Claim Construction

Fast Felt owns U.S. Patent No. 8,137,757 (“the ‘757 patent”), which it asserted against Owens Corning in the U.S. District Court for the Northern District of Ohio.  In turn, Owens Corning petitioned for inter partes review of the claims of ‘757 patent, and the PTAB instituted trial.  Owens Corning contended that the challenged claims were rendered obvious by prior art combinations disclosing all elements of the independent claims.  However, in its final written decision, the Board determined that Owens Corning failed to provide a motivation to combine and upheld the patentability of the challenged claims. Owens Corning timely appealed.

Continue Reading Federal Circuit Clarifies the Requirements for a Teaching Away by the Prior Art

Last month, following a jury verdict in federal district court in Delaware awarding Plaintiff Idenix Pharmaceuticals LLC $2.54 billion in damages—“the largest damages verdict ever returned in a patent [infringement] trial”—Chief Judge Leonard Stark denied Idenix’s motion for enhanced damages. Idenix Pharm. LLC v. Gilead Scis., Inc., No. 14-CV-00846, at *2, 15 (D. Del. Sept. 22, 2017).  Chief Judge Stark determined that even though the jury concluded that Defendant Gilead Sciences, Inc. willfully infringed Idenix’s patent directed to novel treatments of the Hepatitis C Virus (“HCV”), the totality of the circumstances did not warrant the award of enhanced damages. He based the denial of the motion on the public health benefit of the accused products and on the amount of the jury award.

Continue Reading Chief Judge Stark Rejects Motion for Enhanced Damages Award Due to the Public Interest in the Accused Hepatitis C Virus Treatments

The public version of ALJ Shaw’s Initial Determination (ID) in U.S. International Trade Commission (ITC) investigation Certain Magnetic Data Storage Tapes and Cartridges Containing the Same, Inv. No. 337-TA-1012 (1012 Investigation), provides important guidance on enforcement of standard-essential patents (SEPs) in the ITC.  Respondent and accused infringer Sony argued that several of the patents asserted by patentee Fujifilm wereessential to the LTO-7 standard (relating to “linear tape open” magnetic media) and therefore that Fujifilm had waived its right to injunctive relief and was obligated to license its patents on FRAND terms.  ALJ Shaw ultimately found that Sony had not met its burden of demonstrating essentiality, but he nevertheless provided helpful instructions on the quantum of proof necessary to make out such a claim, as well as other factors relevant to ITC enforcement of SEPs, all of which affirmed that the ITC is a viable forum for enforcement of SEPs.  In sum he ruled that:

  • The party arguing that a patent is essential bears the burden of proof on that point;
  • Unless a patent is, in fact, essential to a given standard, there can be no breach of the standard-setting organization (SSO) agreement(s) giving rise to the FRAND obligation at issue;
  • Breach of an SSO agreement and of forum selection clauses are not valid defenses in ITC investigations; and
  • Respondents bear the burden of proving that a complainant/patentee relinquished its rights to equitable relief by joining the SSO in question.

Continue Reading ALJ Shaw: ITC is a Viable Forum for Enforcement of SEPs