The following is a summary of the precedential patent-related opinions issued by the Court of Appeals for the Federal Circuit for the week ending April 25, 2014. Matt McNeill and Kirk Bradley prepared this edition.
Patentable Invention: Obviousness: Teaching, Suggestion, or Motivation in Prior Art
Litigation Practice and Procedure: Jurisdiction: Standing
Litigation Practice and Procedure: Jurisdiction: Moot or Unripe Issues
Litigation Practice and Procedure: Discovery: Sanctions
Sanofi-Aventis Deutschland GmbH, et al. v. Glenmark Pharmaceuticals Inc., USA, et al., No. 12-1489 (Fed. Cir. (D.N.J.) Apr. 21, 2014). Opinion by Newman, joined by Linn and Wallach.
Affirming the district court’s judgment, the Federal Circuit held that jurisdiction over the appeal was proper, there was substantial evidence to support the verdict that obviousness had not been proved by clear and convincing evidence, the district court did not abuse its discretion by informing the jury of defendant’s document destruction program, and all of the named entities had standing.
Sanofi-Aventis Deutschland GmbH, Aventis Pharma S.A., Abbott GmbH, Abbott Laboratories and Abbott Laboratories Inc. (collectively “Plaintiffs”) filed a complaint alleging infringement of U.S. Patent No. 5,721,244 (“the ’244 patent”) following Glenmark Pharmaceuticals Inc. and Glenmark Pharmaceuticals Ltd.’s (collectively “Glenmark”) Hatch-Waxman Paragraph IV Certification letter. Glenmark admitted infringement but alleged that the patent was invalid. The case was tried to a jury, which held that Glenmark failed to prove the ’244 patent was invalid. The jury awarded over $16,000,000 in damages. The district court retained authority to assess post-verdict damages if the verdict were sustained on appeal. Glenmark appealed, and the Federal Circuit affirmed the district court’s judgment as to all issues.
As an initial matter, the Federal Circuit rejected Plaintiffs’ argument that the Federal Circuit lacked jurisdiction because the district court did not issue a document entitled “final judgment” and retained authority to award post-judgment damages. The Federal Circuit held that 28 U.S.C. § 1292(c)(2) recognizes finality for purposes of appeal when the accounting of damages is incomplete. The court also noted that finality of judgment does not depend on “magic words.”
On the merits, the Federal Circuit rejected Glenmark’s argument that the ’244 patent was invalid as obvious as a matter of law. Glenmark argued that because the ’244 patent claimed a combination of classes of components that were already known, it would have been obvious to try all selections within such classes as a matter of law. Glenmark further argued that it is irrelevant that the combination was ultimately found to have unpredicted properties. The Federal Circuit rejected this argument because nothing in the prior art suggested combining the two drugs claimed in the ’244 patent. The court noted that the unexpected properties of the combination could be considered and that this factor, combined with the lack of teaching of the specific combination, was substantial evidence to support factual findings that in turn support the verdict that obviousness had not been proved by clear and convincing evidence.
Next, the Federal Circuit held that the district court did not abuse its discretion by informing the jury that Glenmark had destroyed documents and that the jury was free to infer that these documents may have been unfavorable to Glenmark. The court noted that Glenmark had a duty to preserve documents as soon as litigation was “reasonably foreseeable,” which occurred no later than the date asserted for “work product” in its privilege log because “work product” immunity only applies to documents prepared in the course of preparation for litigation. The Federal Circuit also held that the district court properly relied on circumstantial evidence in finding that the documents were likely relevant because the documents were from the period that included discussion of the relevant drug, and Glenmark failed to negate the reasonable inference that the documents were related to relevant issues.
Finally, the Federal Circuit affirmed the district court’s finding that Abbott Laboratories and Abbott Laboratories, Inc. were exclusive licensees with standing because the evidence as a whole showed that there were express or implied licenses that transferred exclusive rights to these entities.
Claim Interpretation: Intrinsic Evidence: Specification
Claim Interpretation: Preamble Terms as a Measure of the Invention
Claim Interpretation: Generally
Braintree Laboratories, Inc. v. Novel Laboratories, Inc., No. 13-1438 (Fed. Cir. (D.N.J.) Apr. 22, 2014). Opinion by Prost, joined by Dyk in the result. Opinion concurring-in-part and dissenting-in-part by Dyk. Dissenting opinion by Moore.
The Federal Circuit reversed the district court’s claim construction and vacated the district court’s grant of summary judgment of infringement based on that claim construction. The Federal Circuit also affirmed the district court’s findings that the asserted claims of the patent-in-suit are not invalid.
Braintree Laboratories Inc. (“Braintree”) holds U.S. Patent No. 6,946,149 (“the ’149 patent”) directed to a composition covered by Novel Laboratories, Inc.’s (“Novel”) abbreviated new drug application (“ANDA”) related to drugs used to prepare a patient for a colonoscopy. Braintree sued Novel for infringement of the ’149 patent, and the district court granted summary judgment of infringement based on its construction of four disputed claim terms. After a bench trial on Novel’s invalidity defenses, the district court found that Novel failed to prove by clear and convincing evidence that the claims were invalid. Novel appealed the infringement and invalidity rulings.
Rejecting Novel’s argument that the term “purgation” means “cleansing,” the Federal Circuit held that the claims do not contain language that requires achieving a fully cleansed colon for a colonoscopy. The court noted that cleansing is a goal specifically articulated in the specification, but it is not a claim requirement.
The Federal Circuit reversed the district court’s construction of “clinically significant electrolyte shifts” because the construction ignored the inventor’s clear definition of the term in the specification. Because the patentee’s lexicography must govern the claim construction analysis, the court held that the term should be construed as explicitly defined in the specification.
In vacating the district court’s grant of summary judgment of infringement, the Federal Circuit relied on the reversal of the claim construction of “clinically significant electrolyte shifts” as well as reversal of the district court’s interpretation of the term “a patient.” The district court held that “a patient” means “one or more patients,” which resulted in a claim that could be infringed if a single patient was administered the patented composition and did not experience clinically significant electrolyte shifts. The Federal Circuit disagreed, holding that “a patient” in the preamble means the general class of persons to whom the patented compositions are directed. The court reasoned that the district court’s construction would allow a composition to meet the claims even if 99 patients out of 100 experienced clinically significant electrolyte shifts. The court vacated the grant of summary judgment of infringement and remanded for further findings, noting that some evidence in the record exists regarding how many patients experienced clinically significant electrolyte shifts and that this evidence would need to be evaluated in light of the new claim construction.
The Federal Circuit affirmed the district court’s findings that Novel failed to establish that the ’149 patent is invalid by clear and convincing evidence because the alleged anticipatory reference did not teach administering a hypertonic solution of the proper volume, there was insufficient evidence of a motivation to combine prior art elements to create the claimed composition, and the term “copious” is a descriptive term that would be well understood by those skilled in the art.
Judge Dyk concurred in part, dissented in part, and concurred in the result. Judge Dyk agreed with the majority on all points except that Judge Dyk believed Novel established noninfringement as a matter of law because Novel’s ANDA application was for a single dose of its composition consisting of two bottles with a total volume outside claimed range. Judge Dyk noted that while a single bottle of the solution fell within the claimed range, the ANDA application called for a dose of two bottles, and unapproved uses could not stand as a basis for infringement.
Judge Moore dissented despite joining the majority with respect to all limitations except “a patient.” Judge Moore stated that the ordinary meaning of “a patient” is “one or more patients” and nothing in the specification supported the majority’s construction. Judge Moore noted that this led to a potentially unsatisfactory result, but reprimanded the majority for rewriting the claims contrary to well-established Federal Circuit precedent.
Patentable Invention: Double Patenting
Gilead Sciences, Inc., et al. v. Natco Pharma Ltd., et al., No. 13-1418 (Fed. Cir. (D.N.J.) Apr. 22, 2014). Opinion by Chen, joined by Prost. Dissenting opinion by Rader.
The Federal Circuit vacated the district court’s decision and remanded for further proceedings because the district court improperly granted summary judgment in favor of the patentee on defendant’s obviousness-type double patenting defense.
Gilead Sciences, Inc. (“Gilead”) sued Natco Pharma Limited (“Natco”) for infringement of U.S. Patent No. 5,763,483 (“the ’483 patent”). In response, Natco asserted that the ’483 patent is invalid for obviousness-type double patenting over U.S. Patent No. 5,952,375 (“the ’375 patent”), which is also owned by Gilead. The two patents list the same inventors and have very similar, and in substantial parts identical, specifications. However, the ’483 patent and ’375 patent are not part of the same family of patents and were not before the same examiner. The ’483 patent was filed on December 27, 1996 and expires on December 27, 2016. The ’375 patent was filed on February 26, 1996 and expires on February 27, 2015. During prosecution of the ’375 patent, Gilead disclaimed any portion of the ’375 patent term that extended beyond the expiration of the ’483 patent. This disclaimer had no effect because the ’375 patent expires after the ’483 patent. Gilead did not file a terminal disclaimer for the ’483 patent. Accordingly, despite the fact that the ’375 patent was filed earlier than the ’483 patent, the ’375 patent expires later than the ’483 patent. In granting summary judgment in favor of Gilead on Natco’s obviousness-type double patenting defense, the district court concluded that a later-issued but earlier-expiring patent cannot serve as a double-patenting reference against an earlier-issued but later-expiring patent. Natco appealed.
The Federal Circuit vacated the district court’s judgment, finding little import in the fact that the ’483 patent issued before the ’375 patent. The court reasoned that the bedrock principle that when a patent expires, the public is free to use not only the same invention but obvious variations thereof dictated that the availability of obviousness-type double patenting references depends not on the issue date but on the expiration date of the patents. The court noted that using the issue date to determine whether prior art could serve as an obviousness-type double patenting reference was sound when the expiration date and issue date were inextricably intertwined but statutory changes in calculating expiration dates rendered this rule ineffective in light of the principles of obviousness-type double patenting.
Chief Judge Rader dissented, noting that the judge-made obviousness-type double patenting doctrine stems from two policy concerns. First, the doctrine prevents patentees from obtaining additional patent term for obvious modifications of its earlier claims where its earlier patents do not qualify as prior art. Second, the doctrine prevents multiple infringement suits by different assignees asserting essentially the same patent. Chief Judge Rader noted his reluctance to create or expand judge-made exceptions to statutory grants. He also noted that the first policy concern was not at issue here because the subsequent ’375 patent unquestionably did not extend the term of the earlier ’483 patent. Further, the second policy concern was not at issue because the ’375 patent is subject to a terminal disclaimer with respect to the ’483 patent and, thus, is enforceable only so long as it and the ’483 patent are commonly owned. Chief Judge Rader dissented in light of the lack of these two policy concerns and his reluctance to expand judge-made exceptions to statutory grants.
Claim Interpretation: Intrinsic Evidence: Specification
Claim Interpretation: Means-Plus-Function
Remedies: Injunctions: Permanent Injunction
Remedies: Damages: Reasonable Royalty
Litigation Practice and Procedure: Procedure: Admissibility of Evidence
Apple Inc., et al. v. Motorola, Inc., et al., Nos. 12-1548, -1549 (Fed. Cir. (N.D. Ill.) Apr. 25, 2014). Opinion by Reyna. Opinion dissenting-in-part by Rader. Opinion concurring-in-part and dissenting-in-part by Prost.
The Federal Circuit affirmed-in-part, reversed-in-part, and vacated-in-part the district court’s summary judgment that neither Apple nor Motorola were entitled to an injunction or damages for infringement of the patents-in-suit. The court largely affirmed the district court’s claim construction decisions and reversed the district court’s decision to exclude the damages evidence presented by the litigants. The court also affirmed that Motorola is not entitled to an injunction for a patent committed to fair, reasonable, and non-discriminatory (“FRAND”) terms.
Plaintiffs Apple Inc. and Next Software, Inc. (collectively “Apple”) filed a complaint against Motorola, Inc. and Motorola Mobility, Inc. (collectively “Motorola”), alleging infringement of three patents. Motorola counterclaimed for infringement of six of its own patents. Apple amended its complaint to include an additional twelve patents. Based upon its claim construction decisions, the district court granted summary judgment of noninfringement with respect to certain claims. The district court also excluded the vast majority of both parties’ expert evidence regarding damages. The court then granted summary judgment that neither Apple nor Motorola were entitled to damages or an injunction based on the lack of record evidence after the exclusion of the expert evidence. The parties appealed the district court’s claim construction, admissibility, damages, and injunction decisions with respect to Apple’s U.S. Patent Nos. 7,479,949 (“the ’949 patent”); 6,343,263; and 5,946,647 and with respect to Motorola’s U.S. Patent Nos. 6,359,898; 6,175,559; and 5,319,712.
The Federal Circuit affirmed the district court’s claim construction decisions except for its construction of the ’949 patent. The district court construed the “heuristic” limitations of certain claims of the ’949 patent as means-plus-function limitations because these terms described functions without describing the structure necessary to perform the functions. The Federal Circuit disagreed, holding that the claim terms recited sufficient structure. The Federal Circuit also held that the “structure” of computer software is understood through, for example, an outline of an algorithm, a flowchart, or a specific set of instructions or rules. The court noted that software structure may also be provided by describing the claim limitation’s operation, such as its input, output, or connections. The Federal Circuit determined that the “heuristic” limitations contained sufficient structure because the term “heuristic” has a known meaning and the ’949 patent also describes the limitation’s operation, including its input and output.
Reversing the district court, the Federal Circuit next held that the district court’s decision to exclude the damages evidence presented by both Apple and Motorola was incorrect with one minor exception. With respect to excluding Apple’s expert’s testimony, the Federal Circuit held that the district court made two errors. First, the district court based its damages analysis on an incorrect claim construction, which alone would require reversal and a remand. Second, the district court erred by not considering the full scope of the asserted claims, questioning the expert’s conclusions, and substituting its own opinion instead of focusing on the reliability of the principles and methods used or the sufficiency of the facts and data relied upon.
With respect to Motorola’s expert testimony related to damages, the Federal Circuit affirmed the district court with respect to Motorola’s licensing expert, Charles Donohoe, because Donohoe failed to tie his stated royalty rate to the technological contribution of the patents-in-suit to the standard-essential patent (“SEP”) portfolio. However, the court held that the testimony of Motorola’s damages expert, Carla Mulhern, should not have been excluded because Mulhern based her damages calculation on the cost to license the technology, a generally reliable method of estimating the value of a patent. The court held that the district court’s critiques of Mulhern’s testimony did not justify excluding the testimony and more properly went to the weight of the testimony rather than its admissibility.
The Federal Circuit also reversed the district court’s grant of summary judgment of no damages for infringement of Apple’s patents. The court held that a finding that a royalty estimate may suffer from factual flaws does not, by itself, support the legal conclusion that zero is a reasonable royalty. The Federal Circuit stated that if each party’s evidence fails to support its specific royalty estimate, the fact finder is still required to determine what reasonable royalty is supported by the record. Because Motorola did not provide affirmative evidence supporting a zero dollar royalty and the mere lack of evidence does not justify such a royalty, the Federal Circuit reversed the district court’s grant of summary judgment of no damages with respect to Apple’s patents.
The Federal Circuit also vacated the district court’s grant of summary judgment of no injunction regarding Apple’s ’949 patent because the district court’s improper claim construction of certain terms of the ’949 patent, which was reversed, necessarily permeated its injunction analysis.
Finally, the Federal Circuit affirmed the district court’s decision that Motorola is not entitled to an injunction for infringement of the ’898 patent. The court stated that to the extent the district court applied a per se rule that injunctions are not available for SEPs, it erred. The court noted that Motorola’s FRAND commitments are certainly relevant to the injunction analysis. While a patentee subject to FRAND commitments for SEPs may have difficulty establishing irreparable harm, an injunction may be justified where an infringer unilaterally refuses a FRAND royalty or unreasonably delays negotiations to the same effect. The Federal Circuit affirmed the district court’s ruling that Motorola was not entitled to an injunction for the ’898 patent because of Motorola’s FRAND commitments, which had yielded many licenses encompassing the ’898 patent. The Federal Circuit also relied on the fact that Motorola failed to demonstrate that Apple’s infringement caused it irreparable harm because there are numerous competitors in the industry using the technology claimed in the ’898 patent, and Motorola did not show that adding one more competitor would create irreparable harm.
Chief Judge Rader dissented in part. He joined the court’s opinion in its entirety except for the affirmance of the district court’s denial of Motorola’s request for an injunction. He stated that the record contained sufficient evidence to create a genuine issue of material fact, meaning that the district court improperly granted summary judgment.
Judge Prost concurred in part and dissented in part, specifically dissenting with respect to the construction of the claim term “heuristic” in the ’949 patent and with respect to the decision to vacate the grant of summary judgment regarding Apple’s request for an injunction.
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