Patent Case Summaries July 4, 2014

Federal Circuit Patent Case Summaries for the Week Ending July 4, 2014

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 July 4, 2014. Evan Woolley and Wes Achey prepared this edition.    

Case Summaries

Litigation Practice and Procedure: Courts: Choice of Law: Matters of Exclusive Federal Circuit Jurisdiction: Subject Matter Jurisdiction
Jurisdiction: Standing

Madstad Engineering, Inc. v. United States Patent and Trademark Office, Nos. 13-1511,-1512 (Fed. Cir. (M.D. Fla.) July 1, 2014). Opinion by O’Malley, joined by Newman and Wallach.

The Federal Circuit affirmed the district court’s dismissal for lack of standing to seek a declaratory judgment that the first-to-file provision in the America Invents Act is unconstitutional.

The Federal Circuit ruled that it did have subject matter jurisdiction to hear the appeal on the basis that, even though the plaintiff’s challenge invoked the Constitution and not patent laws, it raised questions such as the scope of inventors’ rights which were of substantial importance to patent law and therefore within the Federal Circuit’s jurisdiction.

On the issue of standing, the court held that the plaintiff’s alleged injury of having to undertake anti-theft measures under the new first-to-invent system were too speculative to confer standing. Analogizing to the recent Supreme Court decision in Clapper v. Amnesty Int’l U.S.A., the court ruled that each of the plaintiff’s claimed harms was too speculative. The court determined that the plaintiff’s assertion that the AIA increased incentives for computer hackers to steal IP, thus causing him to incur the costs of additional computer security, was too speculative because he had not shown how the AIA would increase the incidence of computer hacking. The plaintiff also argued that he was harmed by the additional costs required to “win the race” to the patent office in a first-to-file system. But he had not actually filed and was not preparing to file any applications since the AIA became effective, rendering this alleged harm likewise too speculative. Finally, the plaintiff asserted that the AIA would force him to obtain non-disclosure agreements from potential vendors to prevent theft. The plaintiff had not shown that he had or was planning to engage with a vendor that would require such an agreement, so the court also found this alleged harm to be too speculative.

In its rulings, the Federal Circuit approved of the district court’s reliance on Clapper despite the plaintiff’s assertions that other, earlier precedents should have been considered. The Clapper opinion analyzed the earlier authorities and distinguished the cases relied upon by the plaintiff. Finally, the Federal Circuit ruled that the plaintiff’s alleged harms failed to fulfill the “substantial risk” test, which the plaintiff posited was an alternate test for standing that had survived Clapper and was more relaxed. The court determined that the plaintiff’s alleged harm failed this test because it depended on several layers of speculation about what third parties might do.  

The Patent Application: Specification: Written Description
Patent Office Procedures: Interferences
Defenses: Invalidity
Litigation Practice and Procedure: Prior Adjudication: Issue Preclusion (Collateral Estoppel)
Litigation Practice and Procedure: Procedure: Jury Instructions

AbbVie Deutschland GmbH & Co., KG, et al. v. Janssen Biotech, Inc., et al., Nos. 13-1338,-1346 (Fed. Cir. (D. Mass.) July 1, 2014). Opinion by Lourie, joined by Chen. Concurring opinion by O’Malley.

In this dispute, the patents at issue relate to genetically engineering fully human antibodies. The antibodies were designed to bind to the antigens (IL-12) produced in connection with rheumatoid arthritis and psoriasis. The specification of the patents described a range of about 300 antibodies with different amino acid sequences that resulted in different binding affinities (the strength with which the antibody would bind to the antigen). Every antibody is composed of four chains of amino acids, and the patented antibodies consisted of VH3 type heavy chains and Lambda type light chains. The claims at issue were antibodies with certain binding affinities (greater than a threshold level) for the targeted antigen. The accused antibody produced by Centocor was comprised of VH5 type heavy chains and Kappa type light chains.

Centocor provoked an interference proceeding with AbbVie when it filed its patent. Centocor filed motions based on obviousness which were eventually denied, awarding AbbVie priority. AbbVie then filed an infringement action in the U.S. District Court for the District of Massachusetts. Centocor filed an action seeking judicial review of the interference determination in the U.S. District Court for the District of Columbia, which was consolidated with the AbbVie action. AbbVie moved for summary judgment that Centocor was collaterally estopped from challenging validity because of the result in the interference proceeding. The motion was denied because the judgment in the interference was not final in light of the pending review in the district court. Proceeding in phases, the court decided on summary judgment that Centocor infringed, but a jury decided that the AbbVie patents were invalid for insufficient written description, lack of enablement, and obviousness. In light of the jury verdict the court reversed the decision in the interference and awarded Centocor priority.

The Federal Circuit affirmed the holding that collateral estoppel could not preclude Centocor’s invalidity arguments at the district court. Since the interference ruling was being reviewed at the district court (where 35 U.S.C. § 146 allows for supplementation of the factual record that was before the Patent Office, and provides for de novo review) it was not final as required for collateral estoppel.

As a question of fact, the Federal Circuit reviewed the jury’s determination of inadequate written description for substantial evidence. The court affirmed, holding that AbbVie had not adequately described the entire genus of antibodies with high binding affinity to the IL-12 antigen. AbbVie only described antibodies with a specific structure -- VH3 type heavy chains and Lambda type light chains. Antibodies of this type had at least 90% (and often as high as 99.5%) similarity in amino acid chains. The Centocor antibodies were structurally very different (VH5 type heavy chains and Kappa type light chains) and shared on a 50% similarity in amino acid chains to the AbbVie antibodies.

The Federal Circuit also affirmed the district court’s evidentiary rulings and jury instructions. Certain expert testimony, which sought to summarize legal arguments made to the Patent Office, was properly excluded. Also, the fact that the jury instructions did not mention pertinence of non-considered art was not prejudicial in light of the decision on written description.

Judge O’Malley concurred in the judgment, but wrote separately to state that she would have affirmed the district court on grounds of obviousness, which were not disputed on appeal.

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