Recent Case Highlights

Below are short summaries of decisions from July 1 – December 31, 2019, which are referenced throughout Patent Defenses:

Sec. 271(g) Infringement: All Steps of the Patented Process Need Not Be Performed By Or Attributed To a Single Entity.

• Direct infringement of a method claim requires that all steps of the method be performed by or attributed to a single entity. But, because liability under section 271(g) (selling, etc., product made by a patented process) is not predicated on direct infringement of the patented process, “whether that process is practiced by a single entity is immaterial to the infringement analysis.” Syngenta Crop (Fed. Cir. 12/18/19) (“an issue of first impression”).
• Note: this is another reason for litigators and prosecutors to think of section 271(g) when asserting or drafting method claims.

Sec. 271(e)(1): High Risk Swimming Outside the Safe Harbor.

• It is not infringement to make, etc., a patented invention using site specific genetic manipulation techniques “solely for uses reasonably related to the development and submission of information” to the FDA. 35 U.S.C. § 271(e)(1). But making batches found to be outside this Safe Harbor poses high risk. Amgen (Fed. Cir. 12/16/19) (aff’g jury’s $70 million lump sum reasonable royalty award for defendant manufacturing pre-launch batches using patented manufacturing method, unprotected by section 271(e)(1) Safe Harbor, despite defendant not having received FDA approval to sell product by time of the trial).

Prosecution History Estoppel: Turns on Whether Applicants Argued Combination of Distinctions Over Prior Art, or Argued Distinctions Separately.

• Every day patent prosecutors make multiple distinctions over a cited prior art reference. Whether those distinctions are phrased separately or in combination can make all the difference in later litigation. Amgen (Fed. Cir. 07/29/19) (aff’g dismissal for failure to state a claim of infringement, based on prosecution history estoppel where applicants made three separate arguments to distinguish prior art, rather than rely only on combination of distinctions, one of which distinguishes accused products).

Inducement Infringement: Warning Against Applying Sunscreen Until Formulation Dries Does Not Encourage Applying Sunscreen After Formulation Dries.

• When one is aware of an issued patent in the neighborhood of one’s new drug or other product, careful wording of drug labels or other product instructions can avoid inducement-infringement liability. HZNP Medicines (Fed. Cir. 10/10/19) (2-1) (aff’g Summ. J. no inducement by label in ANDA action, where claimed method requires applying formulation, then waiting for it to dry, and then applying sunscreen or insect repellant, but accused label instead warns against applying sunscreen, insect repellant, etc. until formulation dries, which does not encourage infringement).

Particular and Distinct Claiming Requirement: Extends to Elements Incorporated Into Claim.

• Most indefiniteness issues concern terms used in a patent claim, naturally. But what about matter in the specification that limits the scope of the claims, by statute (§ 112(6/f)) or by a judicial doctrine? For example, a claim using the transition “consisting essentially of” is open to ingredients or steps unlisted in the claim that do not materially affect the “basic and novel properties” of the invention. “Having used the phrase ‘consisting essentially of,’ and thereby incorporated unlisted ingredients or steps that do not materially affect the basic and novel properties of the invention, a drafter cannot later escape the definiteness requirement by arguing that the basic and novel properties of the invention are in the specification, not the claims.” HZNP Medicines (Fed. Cir. 10/10/19) (2-1) (aff’g indefiniteness under Nautilus of “consisting essentially of” claim. One of the Spec.’s five identified basic and novel properties, “better drying time,” was indefinite, because Spec. disclosed two tests for evaluating drying time, “but those tests do not provide consistent results upon which a POSITA would be able to evaluate ‘better drying time’”).
• Note: Perhaps someone reading this will be the first to successfully argue indefiniteness based on unclear or imprecise structures, materials, or acts incorporated via section 112(6/f), and/or based on uncertainty whether section 112(6/f) is triggered.

Sec. 112(6/f): Williamson (Fed. Cir. 06/16/15) Continues to Have Substantial Impact.

• The following terms triggered section 112(6/f), twice leading to indefiniteness but once defeating an obviousness challenge:
  • “control.” Fiber (Fed. Cir. 11/21/19) (non-precedential) (aff’g district court that “control” invokes Sec. 112(6/f) in part because control depicted in figure was a “generic box with no indication of any structure,” and aff’g finding of indefiniteness);
  • “customization module.” Grecia (Fed. Cir. 08/20/19) (non-precedential) (aff’g district court that “customization module” invokes Sec. 112(6/f), in part because nothing in claim recites “how [it] operates,” and aff’g finding of indefiniteness);
  • “a mechanical control assembly … configured to .…” MTD Products (Fed. Cir. 08/12/19) (vacating PTAB obviousness decision; contrary to PTAB, “a mechanical control assembly … configured to …” triggers Sec. 112(6/f), as patent owner argues, in part because similar to other nonce terms, “configured to” format defines functions, and term used in prior art to describe “a wide variety of structures with varying functions,” despite Spec. describing a corresponding structural embodiment).

Product Claims: Functional Limitations Need Not Be Present Simultaneously in Product.

• A claimed product “comprising” certain functionally described elements need not exhibit those functions simultaneously. Therefore, claim reciting functional limitations that would be impossible to exist simultaneously in claimed “drug delivery composition,” not indefinite. Indivior II (Fed. Cir. 07/12/19) (2-1).

PHOSITA: May Be Part of a Team.

• Panel affirmed district court finding “that a person of ordinary skill would principally have a background in pharmaceutical science or chemistry but ‘would also be a member of a team, which would include an engineer or scientist with one to three years of relevant experience manufacturing and optimizing various types of film products using coating and drying processes.’” Indivior II (Fed. Cir. 07/12/19) (2-1) (aff’g non-obviousness).

Sec. 101: Natural Law Exclusion Breaks Claim on Making a Drive Shaft.

• Many attacks on Mayo and Alice henceforth will feature a panel decision in October invalidating under the “natural law” exclusion to patent eligibility a method of manufacturing a drive shaft. American Axle (Fed. Cir. 10/03/19) (2-1) (aff’g Summ. J. invalidity of claims on a “method of manufacturing a driveline propshaft containing a liner designed such that its frequencies attenuate two modes of vibration simultaneously,” as being directed to “utilization of a natural law (here, Hooke’s law [‘a natural law that mathematically relates the mass and/or stiffness of an object to the frequency with which that object oscillates (vibrates)’] and possibly other natural laws) in a particular context”).

Sec. 101: Fed. Cir. and United States Seek Change.

• In denying en banc review of a panel decision on section 101 patent eligibility, several Fed. Cir. judges bemoaned the state of the law created by the Sup. Ct. Athena Diagnostics (Fed. Cir. 07/03/19) (denying rehearing en banc) (7-5). Search “Athena Diagnostics en banc” [in quotes] in Patent Defenses for summary of their multiple opinions, categorized by: primary disagreements, current state of law, problems with current law, what’s right with current law, and wished-for law.
• On January 10, the S. Ct. will confer on several certiorari petitions re section 101, including on the two 2018 pro-patentee decisions below. The Solicitor General has urged the Court to deny certiorari in these two cases, but in so doing, criticized Bilski, Mayo, and Alice.
  • Vanda Pharm. (Fed. Cir. 04/13/18) (Lourie, J.) (2-1) (rev’g judgment of patent invalidity; claims “are directed to a specific method of treatment for specific patients using a specific compound at specific doses to achieve a specific outcome.”) (SG brief (12/06/19) recommends denial of cert., despite Bilski, Mayo, and Alice causing uncertainty, because Fed. Cir. reached correct result);
  • Berkheimer (Fed. Cir. 02/08/18) (Moore, J.) (vacating Summ. J. of Sec. 101 invalidity on four claims; “The patent eligibility inquiry may contain underlying issues of fact.”) (SG brief (12/06/19) recommends denial of cert. as not good vehicle for reconsidering substantive Sec. 101 standards).

Secs. 101 and 112: Results and Functions vs. How.

A distinction central to several patentability requirements is that between a result achieved and function performed, on the one hand, versus a particular way, or “how,” to achieve the result or perform the function. The Federal Circuit continues to emphasize this distinction, mostly in the context of section 101.

• The “distinction between results and means is fundamental to the step 1 eligibility analysis, including in law-of-nature cases, not just abstract-idea cases.” American Axle (Fed. Cir. 10/03/19) (2-1) (“What is missing is any physical structure or steps for achieving the claimed result of damping two different types of vibrations. The focus of the claimed advance here is simply the concept of achieving that result, by whatever structures or steps happen to work.”).
• “The distinction between claims that recite functions or results (the ‘what it does’ aspect of the invention) and those that recite concrete means for achieving particular functions or results (the ‘how it does it’ aspect of the invention) is an important indicator of whether a claim is directed to an abstract idea.” Bridge & Post (Fed. Cir. 07/05/19) (2-1) (Bryson, J., dissenting in part).
• “Absent sufficient recitation of how the purported invention improved the functionality of a computer, the ‘improvement’ captured by those claims [in other cases] was recited at such a level of result-oriented generality that those claims amounted to a mere implementation of an abstract idea on a computer, not the specific way to improve the functionality of a computer.” Koninklijke KPN (Fed. Cir. 11/15/19) (rev’g Rule 12(c) judgment of ineligibility; distinguishing “data manipulation” precedents).

For Some, The “Feel-Good” Decision of 2019?: Lawyer-Owned NPE Sanctioned for Abusive Litigation.

• Blackbird (Fed. Cir. 12/16/19) (aff’g award of fees of full requested amount of $363,243.80 against NPE run by lawyers, which offered increasingly lower and eventually zero settlement amounts and then without notice voluntarily dismissed action with prejudice on day pretrial submissions were due; award based in part on weak infringement position, delays in producing documents, and need to deter further similar abusive litigation).

Below are short summaries of decisions from January 1 – June 30, 2019, which are referenced throughout Patent Defenses:

PRIOR ART MAY BE SECRET, EVEN FOR FITF PATENTS: Some forms of prior art may be secret. That remains true for on-sale prior art to first-inventor-to-file (FITF) patents.

• AIA’s Catchall Phrase “Or Otherwise Available To The Public” Did Not Change The “On Sale” Bar (FITF): “The catchall phrase ‘or other­wise available to the public’ … [did not] alter[] the meaning of the ‘on sale’ bar.” Helsinn II (U.S. 01/22/2019).
• On Sale Activity Need Not Publicly Disclose Claimed Invention (FITF also): “A commercial sale to a third party who is required to keep the invention confidential may place the invention ‘on sale’” under the AIA as under the pre-AIA statute. “[Our] cases focus on whether the invention had been sold, not whether the details of the invention had been made available to the public or whether the sale itself had been publicly dis­closed.” Helsinn II (U.S. 01/22/2019).
• Confidential, Non-Enabling Disclosures To Applicants (“Derived Knowledge”) Are Prior Art Under Sec. 103: Sec. 102(f) “‘does not pertain only to public knowledge, but also applies to private communications between the inventor and another which may never become public.’” Endo Pharma. (Fed. Cir. 05/03/19) (2-1) (aff’g judgment of non-obviousness; confidential communication from FDA to employer of patent applicants, mandating that manufacturers reduce certain impurities below a certain level, without describing how to do this, constitutes prior art for obviousness analysis).

CONSIDER JEPSON CLAIMS: Often when a claim-drafting form, such as Jepson (“wherein the improvement comprises”) or “means for,” goes out of style, it is forgotten or ridiculed—even when changes in substantive patent law would merit wider use of that form. But the courts sometimes remind practitioners of the value of the old forms.

• Jepson Claim Preamble Has Patentable Weight: “Where an applicant chose not to use the well-established Jepson transitional phrase, and the preamble is wholly conventional while only the body of the claim identifies an improvement, that choice is a powerful reason to deny the preamble the limiting effect it would have had if the ‘improvement’ transitional phrase had been used.” Arctic Cat (Fed. Cir. 03/26/19).
  • Practice Tip: Consider drafting preamble both in Jepson format (giving it patentable weight for Sec. 102, 103, and 101 purposes), and also as a claim environment, not a claim element, so that it need not be performed by the accused direct infringer. For example, a diagnostics claim might recite treatment steps in Jepson format and as a claim environment, allowing for Sec. 101 eligibility and direct infringement by a diagnostic entity, perhaps. For relevant case law digested in Patent Defenses, search Bing, Google or the search feature in Patent Defenses for “Claim Language May Limit Claimed Environment Not Claimed Subject Matter.”

SEC. 101 PENDULUM SWINGING BACK: As Congress considers radical reform to Sec. 101 (most recent IP Subcommittee hearing summarized here), several Federal Circuit judges are pushing the pendulum back in favor of patent owners, on both substantive and procedural grounds.

• CellSpin (Fed. Cir. 06/26/19) (rev’g R. 12(b)(6) dismissal; complaint alleges that “it was unconventional to separate the steps of capturing and publishing data so that each step would be performed by a different device linked via a wireless, paired connection,” and unconventional to have a “two-step, two-device structure requiring a connection before data is transmitted,” and that this arrangement had benefits over and was inventive compared to prior art; hence “they recite a specific, plausibly inventive way of arranging devices and using protocols rather than the general idea of capturing, transferring, and publishing data.”);
• Uniloc (Fed. Cir. 05/24/19) (non-precedential) (rev’g dismissal of complaint on step one and in alternative step two: “the positioning of these components on the application server together with the application launcher on the client computer allows customization by both the administrator and the user in such a way as the installation can proceed on-demand with both sets of preferences. There has been no showing or determination that such a network architecture was conventional.”);
• Endo Pharma. (Fed. Cir. 03/28/19) (rev’g R. 12(b)(6) dismissal; “claims are directed to a patent-eligible method of using oxymorphone or a pharmaceutically acceptable salt thereof to treat pain in a renally impaired patient,” based in part on Spec. describing invention as method of treating pain.);
• SRI Int’l (Fed. Cir. 03/20/19) (2-1) (aff’g Summ. J. of patent eligibility; “claims are directed to using a specific technique—using a plurality of network monitors that each analyze specific types of data on the network and integrating reports from the monitors—to solve a technological problem arising in computer networks: identifying hackers or potential intruders into the network.”);
• Natural Alternatives (Fed. Cir. 03/15/19) (rev’g R. 12(c) judgment of invalidity; product claims are “directed to specific treatment formulations that incorporate natural products, but they have different characteristics and can be used in a manner that beta-alanine as it appears in nature cannot.” Also, absent clear statement in Spec., complaint or other material properly considered on motion on the pleadings, whether certain limitation is “well-understood, routine, and conventional” cannot be decided on a motion for judgment on the pleadings.)

SEC. 112(F): WHEN IS CORRESPONDING “STRUCTURE … OR ACTS” AN ALGORITHM?: In “software” claims the corresponding “structure … or acts” is an algorithm, while in “hardware” claims it may be a circuit. What if the specification discloses both software and hardware embodiments?

• Sony (Fed. Cir. 05/22/19) (vacating PTAB obviousness decision and rev’g construction that omitted algorithm; “reproducing means for reproducing the audio data …” is construed as computer implemented despite a hardware (circuit) embodiment also being disclosed, because Spec. refers to “the processing” of the “controller” part of the reproduction device as shown in a flowchart, and does not “describe or refer to the circuitry of the controller that would be required for a hardware controller to perform the claimed function”).

LESSON FOR NEW CLAIM DRAFTERS: 179° IS NOT 180°: Does a structure that can rotate 179 degrees infringe a claim that was amended to recite that the structure can rotate 180 degrees? Of course not.

• Cobalt Boats (Fed. Cir. 05/31/19) (non-precedential) (No literal infringement where the accused structure’s maximum rotation is between 172 and 179 degrees but claim recites rotation of at least “180 degrees.” Rev’g equivalents infringement; “when claims are amended to include a specific numeric boundary, we have held that the patentee cannot later recapture what is beyond that boundary through the doctrine of equivalents”).

SHOWING UNEXPECTED RESULTS MIGHT SHOW NON-ENABLED: What’s better than winning a patent lawsuit? Winning based on the other side’s persuasive arguments, of course.

• Unexpected Results Supporting Non-Obviousness May Also Help Show Lack Of Written Description Support: “In light of the fact that the specification provides nothing more than the mere claim that uncoated PPI might work, even though persons of ordinary skill in the art would not have thought it would work, the specification is fatally flawed. It does not demonstrate that the inventor possessed more than a mere wish or hope that uncoated PPI would work, and thus it does not demonstrate that he actually invented what he claimed: an amount of uncoated PPI that is effective to raise the gastric pH to at least 3.5.” Nuvo Pharma. (Fed. Cir. 05/15/19) (rev’g trial court judgment of written description support; although experimental data generally not required, where claims require a level of therapeutic effectiveness and patent owner showed skilled artisan would not have expected claimed results from claimed subject matter, and Spec. lacked efficacy data or anything else teaching otherwise, the claims lack written description support).

“PLAIN MEANING” OVERUSED BY TRIAL COURTS: Many patent owners in litigation try to minimize construction of the claims they assert, by asking the Judge to instruct the jury that the term has its “plain meaning.” This option certainly is tempting to a district court. But, the Federal Circuit continues to reprimand district courts for being too ready to punt claim construction to the jury with a “plain meaning” instruction of disputed claim terms.

• Trial Court Must Resolve Construction Dispute For The Jury: Omega Patents (Fed. Cir. 04/08/19) (granting new trial because jury verdict of infringement may have been based on incorrect understanding of claim; faulting trial court for refusing to construe claim term on basis that it was defined in specification, and telling jury to give non-construed terms their plain and ordinary meaning; “the court is not absolved of this duty to construe the actually disputed terms just because the specification of the patent defines the term.”); Cobalt Boats (Fed. Cir. 05/31/19) (non-precedential) (rev’g jury verdict of infringement; “Instead of resolving this dispute as to scope, as it was required to do under O2 Micro, the district court erroneously [instructed the jury to give the term plain meaning and] determined that whether the term ‘has to be interpreted strictly to be limited to exactly 180 degrees’ was an issue that would ‘have to be resolved by the finder of fact.’”)

BEFORE GIVING UP, CONSIDER ISSUE PRECLUSION: Sometimes there is not enough at stake in a proceeding to appeal a loss. But before giving up, consider issue preclusion to be sure you understand the risks posed for other proceedings.

• Papst Licensing (Fed. Cir. 05/23/19) (applying issue preclusion in PTAB appeal based on PTAB final decision (whose appeal was voluntarily dismissed) of obviousness of patents with overlapping Spec., where patent owner made no showing of factors justifying exception to application of standard doctrine of applicability of issue preclusion, and same claim-construction and reference-teaching issues were resolved in and essential to earlier decision);
• Power Integrations (Fed. Cir. 06/13/19) (rejecting, under the lack-of-incentive-to-litigate exception, argument that patent owner is precluded from arguing IPR was time barred for failure to appeal PTAB decision of no time bar in another IPR proceeding initiated by same petitioner on a different patent, primarily because large damages award exists on this patent but not on the other patent).

MUST READ FOR PATENT LITIGATORS: SUPREME COURT DECISIONS OUTSIDE PATENT LAW: One way for patent attorneys to think outside their normal patent rectangular cuboid, is to read Supreme Court decisions and consider how they might be extended to patent law. Here are three examples from this term.

• The Void-For-Vagueness Doctrine: Lessons For Patent Claim Construction And Correction?: Courts may not rewrite patent claims for some of the same reasons they cannot rewrite statutes. The void-for-vagueness doctrine prohibits courts from rewriting the law, as that would violate separation of powers. Davis (U.S. 06/24/2019) (“In our constitutional order, a vague law is no law at all. Only the people’s elected representatives in Congress have the power to write new federal criminal laws. And when Congress exercises that power, it has to write statutes that give ordinary people fair warning about what the law demands of them. Vague laws transgress both of those constitutional requirements. They hand off the legisla­ture’s responsibility for defining criminal behavior to unelected prosecutors and judges, and they leave people with no sure way to know what consequences will attach to their conduct. When Congress passes a vague law, the role of courts under our Constitution is not to fashion a new, clearer law to take its place, but to treat the law as a nullity and invite Congress to try again.”)
• Auer / Seminole Rock Analysis Of Ambiguous Federal Regulations: Lessons For Patent Claim Indefiniteness?: Nautilus can be understood to prohibit, among other things, claims that, when interpreted under governing claim-construction rules, are ambiguous to the skilled artisan. This has some parallels with, but likely is more stringent than, the first step of an Auer / Seminole Rock Kisor (U.S. 06/26/2019) (first step of Auer / Seminole Rock deference analysis requires that the regulation being interpreted by the agency be “genuinely ambiguous,” i.e., there is more than “one reasonable construction of a regulation” even after the court “exhaust[s] all the ‘traditional tools’ of construction,” because “hard interpre­tive conundrums, even relating to complex rules, can often be solved”).
• No Right To Jury Trial On Whether Federal Regulation Preempted State Law: Lessons For Patent Claim Indefiniteness?: In arguing that there is no right to a jury trial on patent claim indefiniteness, one might cite Merck (U.S. 05/20/2019) (whether FDA disapproval of a warning of a different drug risk was clearly contrary to manufacturer seeking a warning for present drug risk, such as to preempt any state law cause of action for failure to so warn, is a question for a court not a jury, in part because “The question often involves the use of legal skills to determine whether agency disapproval fits facts that are not in dispute. Moreover, judges, rather than lay juries, are better equipped to evaluate the nature and scope of an agency’s determination. Judges are experienced in ‘[t]he construction of written instruments,’ such as those normally produced by a federal agency to memorialize its considered judgments. [Markman]. And judges are better suited than are juries to understand and to inter­pret agency decisions in light of the governing statutory and regulatory context. To understand the question as a legal question for judges makes sense given the fact that judges are normally familiar with principles of administrative law. Doing so should produce greater uniformity among courts; and greater uniformity is nor­mally a virtue when a question requires a determination concerning the scope and effect of federal agency action.” “Any ‘subsidiary factual disputes’ [] are part and parcel of the broader legal question.”)