On November 21st, the PTAB issued guidance on motions to amend based on the Federal Circuit’s en banc decision in Aqua Products, Inc. v. Matal, 872 F.3d 1290 (Fed. Cir. 2017). In view of the Aqua Products decision, the PTAB will not place the burden of persuasion on the patent owner with respect to the patentability of substitute claims presented in a motion to amend. Instead, after the patent owner files a motion to amend, the Board will determine whether the substitute claims are unpatentable by a preponderance of the evidence based on the entirety of the record, including the opposition by the petitioner.
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.
In a widely anticipated move with implications for patent litigation across the country, the Supreme Court ruled today that the equitable defense of laches is not available to limit damages in patent infringement cases subject to the six-year damages limitation of 35 U.S.C. § 286.
In S.C.A. Hygiene Prods. Aktiebolag v. First Quality Baby Prods., LLC, the Supreme Court extended to the patent context its reasoning in Petrella v. Metro-Goldwyn-Mayer, Inc. (2014) that laches cannot defeat a claim for copyright infringement damages brought within the rolling three-year limitations period prescribed by the Copyright Act.
The New Year brings excitement and anticipation of changes for the best. Some of the pending patent cases provide us with ample opportunity to expect something new and, if not always very desirable to everybody, at least different. In this post, we highlight several cases that present interesting issues and that we anticipate may provide for new and important developments in the patent law this year.
On October 28, 2016, the United States Patent and Trademark Office (PTO) issued a notice of proposed rulemaking in the Federal Register proposing revisions to the materiality standard for the duty to disclose information in patent applications and reexamination proceedings in light of Therasense, Inc. v. Becton, Dickinson & Co., 649 F.3d 1276 (Fed. Cir. 2011) (en banc). The PTO had previously issued a notice of proposed rulemaking regarding the same rules in the Federal Register on July 21, 2011 after the Therasense decision. However, given the passage of time and the significant changes to patent law as a result of the successful implementation of the Leahy-Smith America Invents Act (AIA), the PTO considered it appropriate to obtain public comment on the proposed changes to the duty of disclosure rules.
In the new notice, the PTO proposes to revise the rules to adopt the but-for standard for materiality required to establish inequitable conduct as set forth in the Federal Circuit’s decision in Therasense as the standard for materiality for the duty to disclose information in patent applications and reexamination proceedings. The PTO also proposes to revise the rules to explicitly reference “affirmative egregious misconduct” as set forth in the Federal Circuit’s Therasense decision.
On remand from the Supreme Court’s decision in Halo Elecs., Inc. v. Pulse Elecs., Inc., 136 S. Ct. 1923 (2016), the Federal Circuit recently issued a revised decision in Stryker Corp. v. Zimmer, Inc., No. 2013-1668 (Fed. Cir. 2016). The decision provides insight into the court’s interpretation of the Halo standard and enhanced damages.
In its en banc decision in In re Seagate Technology, 497 F.3d 1360 (Fed. Cir. 2007), the Federal Circuit held that a district court may increase damages under 35 U.S.C. § 284 only if a patent owner shows by clear and convincing evidence that the infringer acted “despite an objectively high likelihood that its actions constituted infringement,” and then also showed, again by clear and convincing evidence, that the risk of infringement “was either known or so obvious that it should have been known to the accused infringer.”
An invention cannot be patented if it was ready for patenting and was subject to a commercial offer for sale more than one year before the application was filed. This so-called “on-sale bar” can also be used to invalidate a patent. On July 11, 2016, the Federal Circuit in The Medicines Co. v. Hospira Inc. addressed what types of sales constitute an on-sale bar and ruled specifically that a barring sale must include a transaction that “bears the general hallmarks of a sale.”
The Court found that The Medicines Co.’s patent covering methods of making a drug, Angiomax, was not invalid due to The Medicines Co.’s transactions with a supplier, Ben Venue Laboratories, more than a year before filing for the patent. The transactions included The Medicines Co. hiring Ben Venue Laboratories more than one year before it filed its patent applications to prepare three batches of Angiomax using the patented method to ensure it met requirements set by the FDA. The Medicines Co. did not actually sell Angiomax to the public until some time later.
On March 31, 2016, in a blow to the software and entertainment industries, the Federal Circuit denied the International Trade Commission’s (“ITC”) request for a rehearing en banc of the Federal Circuit’s November 10, 2015 decision in ClearCorrect Operating, LLC v. ITC, in which the Federal Circuit found that the ITC’s jurisdiction was limited to “material things” and did not include the ability to bar digital imports. No. 2014-1527, Slip Op. at 3 (Fed. Cir. Nov. 10, 2015).
Align Technology instituted an ITC investigation in April 2012 claiming that Respondents ClearCorrect Pakistan and ClearCorrect Operating LLC infringed patents relating to technology for repositioning teeth. ClearCorrect made models of the U.S. patients’ teeth which were then scanned and converted into digital data sets, which were then transmitted to Pakistan. In Pakistan the data sets were manipulated and adjusted data sets were sent back to ClearCorrect in the United States. No physical articles were imported – only a digital data set. In April 2014, the ITC found that ClearCorrect infringed the patents, and issued exclusion and cease and desist orders barring ClearCorrect from importing the data sets.
The case was appealed to the Federal Circuit, and (as we previously discussed here) the panel overturned the Commission’s decision that it had jurisdiction to exclude digital transmissions and items imported digitally. The ITC then petitioned for an en banc rehearing of the case.
On March 7, 2016, the Court of Appeals for the Federal Circuit recognized “a patent-agent privilege extending to communications with non-attorney patent agents when those agents are acting within the agent’s authorized practice of law before the Patent Office.” The opinion, In Re: Queen’s University at Kingston, PARTEQ Research and Development Innovations, authored by Judge O’Malley and joined by Judge Lourie, granted Queen’s University’s petition for mandamus relief and ordered the district court to withdraw its blanket order compelling the production of communications between Queen’s University and its non-attorney patent agents.
Queen’s University, located in Ontario, Canada, sued Samsung for patent infringement. Throughout fact discovery, Queen’s University refused to produce certain documents it believed contained privileged information. The documents included communications between Queen’s University employees and registered non-lawyer patent agents, which were working without attorney supervision, discussing the prosecution of the patents-in-suit. Samsung moved the district court to compel the production of these documents. The magistrate judge granted Samsung’s motion, finding that the agents’ communications are not subject to the attorney client privilege and that a separate patent-agent privilege does not exist.
On February 12, 2016, the Federal Circuit Court of Appeals issued a decision confirming two important aspects of the doctrine of patent exhaustion in the anticipated en banc decision in Lexmark Int’l, Inc. v. Impression Prods., Inc., Nos. 14-1617, -1619 (slip op.) (Fed. Cir. Feb. 12, 2016) (“Lexmark”). In a lengthy 10-2 decision, the court reaffirmed its prior decisions in Mallinckrodt and Jazz Photo. The first of these cases determined that post-sale limits on the use and resale of a product practicing a patented invention are permissible, and the second concluded that foreign sales of such a product do not exhaust a patentee’s U.S. rights to exclude. On Friday, the court declined to disturb these prior decisions in an important affirmation of a patentee’s U.S. patent rights.
In confirming that the 24-year-old Mallinckrodt decision got it right, the court rejected the contention that all sales by a patentee exhausts its rights as to the product sold, and compared direct sales by a licensee to a bilateral license agreement with the purchaser. The court distinguished the Supreme Court’s Quanta decision and relied on longstanding precedent that a patentee may, through restrictions on its licensees, limit the rights of downstream purchasers. In so holding, Judge Taranto, writing for the majority, explained that a patentee’s own sale of the patented article—instead of leaving the manufacture and sale of the article to others pursuant to a license—could not exhaust the patentee’s right to impose downstream restrictions.