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 11, 2014. Chris Lightner, Dan O'Connor and Chris Douglas prepared this edition.
The Patent Application: Specification: Written Description
The Patent Application: Claims: Indefiniteness
Claim Interpretation: Means-Plus-Function
Chicago Board Options Exchange, Inc. v. International Securities Exchange, LLC, No. 13-1326 (Fed. Cir. (N.D. Ill.) Apr. 7, 2014). Opinion by Reyna, joined by Rader and Wallach.
In affirming the district court’s judgment of noninfringement, the Federal Circuit confirmed that the district court did not violate the mandate rule when it allowed an unresolved factual issue to go to the jury, even when the unresolved factual issue was related to a previously confirmed construction of a claim term. The Federal Circuit also reversed the district court’s determination of indefiniteness of a dependent claim, holding that a means-plus-function claim with sufficient algorithmic support in the written description is not indefinite.
U.S. Patent No. 6,618,707 (“the ’707 patent”) is directed to an “automated exchange” for trading option contracts that allocates trades among multiple market professionals. The ’707 patent differentiates between “open-outcry systems” for trading option contracts and “automated” systems for trading option contracts. Whereas an open-outcry system relies on oral communication between market professionals, an automated system relies on computerized processes for matching previously entered orders with incoming quotations and orders to facilitate trades.
International Securities Exchange, LLC (“ISE”) sued Chicago Board Options Exchange, Inc. (“CBOE”) claiming that the automated portion of its hybrid system infringed the ’707 patent. The hybrid CBOE trading system is a system that blends elements of an open-outcry and an automated system. In analyzing the CBOE hybrid system, the district court instructed the jury to determine whether the CBOE automated system was a separate system that could, on its own, infringe the ’707 patent or whether the CBOE automated system was so intertwined with the open outcry system that it could not be considered an “automated exchange.” The district court ultimately framed this factual issue with a jury instruction differentiating a fully automated system from a hybrid system relying at least in part on open-outcry trading. ISE appealed on the basis that the jury instruction precluded ISE from proving infringement
On appeal, ISE argued that it must prove only that the CBOE automated system is an automated exchange in accordance with the Federal Circuit’s claim construction performed during an earlier appeal, namely: “a system for executing trades of financial instruments that is fully computerized, such that it does not include matching or allocating through the use of open-outcry.” ISE argued that the district court violated the mandate of the case when it required ISE to prove “independence” of the CBOE automated system or to disprove “integration” of the CBOE automated system from the CBOE open outcry system, neither of which were part of the construction of “automated exchange.” In response, the Federal Circuit held that the determination as to whether CBOE’s automated system was independent from the open outcry system was an unresolved factual issue in the case, and was thus independent from the previous claim construction of “automated exchange.” Consequently, the Federal Circuit held that the district court did not violate the mandate rule by allowing this unresolved factual issue to go to the jury.
On appeal, ISE also argued that Claim 2 of the ’707 patent, a means-plus-function claim, was not indefinite because the specification of the ’707 patent provided sufficient disclosure. After analyzing the specification, the Federal Circuit determined that Claim 2 was not indefinite. Specifically, the Federal Circuit held that the specification described an algorithm for matching orders on a pro rata basis in sufficient detail to allow a person of ordinary skill in the art to understand the algorithmic structure for performing the claimed function. As such, CBOE was unable to prove, by clear and convincing evidence, that Claim 2 was indefinite.
Remedies: Injunctions: Preliminary Injunction
Claim Interpretation: Claim Differentiation
Trebro Manufacturing, Inc. v. FireFly Equipment, LLC, et al., No. 13-1437 (Fed. Cir. (D. Mont.) Apr. 9, 2014). Opinion by Rader, joined by Lourie and Prost.
The Federal Circuit held that the district court abused its discretion in denying a motion for preliminary injunction by Trebro Manufacturing, Inc. (“Trebro”) against defendants FireFly Equipment, LLC and Steven R. Aposhian (collectively “FireFly”) for infringement of U.S. Patent No. 8,336,638 (“the ’638 patent”), when the district court: (1) improperly read a limitation into the independent claim during its infringement analysis, (2) failed to identify any single prior art reference or combination of references in its invalidity analysis, and (3) erred in finding that the patent owner is likely to suffer harm if its direct competitor is able to sell an infringing product in a small, niche market.
Trebro designs and sells sod harvesting machines. After acquiring the ’638 patent from a third party, Trebro sued FireFly for infringement and moved for a preliminary injunction. After a hearing, the district court denied the motion for preliminary injunction, finding no substantial likelihood of success on the merits, finding a substantial question of validity, and finding no irreparable harm.
On appeal, the Federal Circuit held that the district court improperly construed a claim limitation by requiring that a horizontal conveyor that is movable in a vertical direction be construed as including a “bed frame.” The Federal Circuit identified that not only had the district court improperly read “bed frame” into the claims, but also identified that the term “bed frame” was found in a dependent claim that rendered the district court’s use of the term “bed frame” in the independent claim redundant. On the proper analysis, the Federal Circuit concluded it was more likely than not that Trebro would succeed on the merits of proving infringement.
In its validity analysis, the Federal Circuit held that the district court improperly relied on certain testimonial evidence to determine that certain claimed features were known in the art. Specifically, the district court relied on the testimonial evidence that identified two sod harvesters that embodied the claim features. The evidence, however, indicated that the particular sod harvesters were not available until after the priority date of the ’638 patent. Two additional references were also determined not to be prior art as the references were by the same inventive entity as the ’638 patent. Thus, without a single reference to challenge the validity of the ’638 patent, the Federal Circuit held that the district court abused its discretion in concluding there was no likelihood of success on the merits on the basis of validity.
On the issue of irreparable harm, the Federal Circuit concluded that the district court clearly erred in finding that the harm Trebro was likely to suffer if its direct competitor was able to sell an infringing product in the small, niche sod harvester market was speculative. In its analysis, the Federal Circuit identified that even though Trebro did not practice the patent, the sod market was sufficiently small, the introduction of the Firefly product would result in significant lost market share, and Trebro would have to lay off a portion of its workforce if a preliminary injunction is not granted. Thus, the Federal Circuit determined that Trebro sufficiently demonstrated that it would be irreparably harmed.
Patentable Invention: Obviousness: Scope and Content of Prior Art
Patentable Invention: Obviousness: Teaching, Suggestion, or Motivation in Prior Art
Hoffmann-La Roche, Inc. et al. v. Apotex, Inc., et al., Nos. 13-1128, -1162, -1163, -1164 (Fed. Cir. (D.N.J.) Apr. 11, 2014). Opinion by Bryson, joined by Lourie. Dissenting opinion by Newman.
Affirming the district court’s grant of summary judgment of invalidity, the Federal Circuit held that evidence of a reasonable likelihood of effectiveness of a particular dosing regimen renders obvious a method claiming that particular dosing regimen, even where prior art documentation does not specifically recommend such a dosing regimen or provide conclusive proof of its efficacy.
Hoffmann-La Roche, Inc. (“La Roche”) alleged infringement of U.S. Patent No. 7,718,634 (“the ’634 patent”) and U.S. Patent No. 7,410,957 (“the ’957 patent”) based on the defendants’ Abbreviated New Drug Applications (“ANDAs”) filings. The defendants in this action were generic drug manufacturers who submitted ANDAs to the United States Food and Drug Administration (“FDA”) for approval to engage in the manufacture and sale of generic versions of a once monthly dose of 150 mg of ibandronate prior to the expiration of patents owned by La Roche.
La Roche developed a once monthly administration of 150 mg of ibandronate for the treatment of osteoporosis, and the once monthly administration was approved by the FDA in 2005. Unlike the monthly dosing regimen developed by La Roche, historical osteoporosis treatments required strict adherence to a once daily dosing regimen and required patients to dose at least thirty minutes prior to eating. The once daily historical osteoporosis treatments often resulted in poor patient compliance, thus decreasing the effectiveness of the treatment.
Appealing the district court’s finding of invalidity, La Roche argued that the prior art did not disclose a monthly dosing schedule. Instead, La Roche argues that the prior art taught away from the claimed monthly dosing schedule because it suggested that a dose-free interval longer than one or two weeks would not be effective. However, while the prior art did not disclose a monthly dosing schedule, in disclosing the weekly or biweekly dosing schedule, the prior art did identify that it was the total dose over a predefined period and not the dosing regimens that was the determining factor for positive effect on bone mass. As such, because the prior art identified that it was total dose over a time period that affected bone mass and because biweekly dosing was effective, the Federal Circuit held that there was at least a reasonable expectation in the prior art that once monthly dosing of ibandronate could also be effective and would also successfully treat osteoporosis.
Further, La Roche argued that it would not have been obvious to select a dose of 150 mg of ibandronate for the claimed monthly dosing regimen. In response, the Federal Circuit stated that because the prior art disclosed that a 5 mg daily dose was effective and a 35 mg weekly dose was effective, it was reasonable to expect that a once monthly dose of 150 mg would have roughly the same efficacy as a daily dose of 5 mg. Although stating that a linear scaling between a daily and monthly dosing is not always effective, the Federal Circuit held that prior art dosing regimens rendered the 150 mg monthly dose obvious to try.
Dissenting, Judge Newman stated that the record indicated that many others have tried and failed to find an efficacious intermittent treatment schedule. The dissent identified several safety concerns that were raised by a less-frequent treatment schedule utilizing a higher dosage. According to Judge Newman, the prior art suggested that researchers had been searching for an effective intermittent treatment schedule, but the results of their research had been at least inconclusive. Thus, based on the long-felt need in the art, the failure of others, the commercial success of the product, and the content of the expert testimony, Judge Newman concluded that the claims at issue were neither obvious nor obvious to try in light of the prior art.
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