Patent Case Summaries August 8, 2014

Federal Circuit Patent Case Summaries for the Week Ending August 8, 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 August 8, 2014. Chris Ziegler and Michele Glessner prepared this edition.    

Case Summaries

The Patent Application: Specification: Written Description
Litigation Practice and Procedure: Procedure: Summary Judgment: Sufficiency of Evidence at Trial
Claim Interpretation: Intrinsic Evidence: Specification

ScriptPro, LLC, et al. v. Innovation Associates, Inc., No. 13-1561 (Fed. Cir. (D. Kan.) Aug. 6, 2014). Opinion by Taranto, joined by Bryson and Hughes.

In reversing the district court’s grant of summary judgment, the Federal Circuit held that the asserted claims of the patents-in-suit are not invalid under 35 U.S.C. § 112 for lack of an adequate written description.

ScriptPro, LLC and ScriptPro USA, Inc. (collectively “ScriptPro”) sued Innovation Associates, Inc. in the U.S. District Court for the District of Kansas, alleging infringement of U.S. Patent No. 6,910,601, which is directed to a collating unit for use with a system that automatically fills and labels prescription pill bottles. The district court found that the specification’s statement that the collating unit “broadly includes . . . a plurality of sensors” limits the invention to a collating unit using sensors. The district court granted summary judgment to Innovation Associates that the asserted claims were invalid because the claims do not require sensors.

On appeal, the Federal Circuit considered the meaning of the phrase “broadly includes” in the specification and the phrase “broadly comprises” in the abstract. The Federal Circuit held that the term “broadly,” similarly to the word “generally,” allows for exceptions to what occurs most of the time when followed by a list of individual components. The Federal Circuit noted, however, that the phrase “broadly includes” could have an absolute meaning when followed by an enumeration of examples.

The Federal Circuit evaluated the specification and further held that the specification disclosed how the sensors could be used, but did not state that they must be used. The specification’s preferred embodiments disclosed a preference for the optional sensors, but did not require the sensors. Further, the description of the functionality of the sensors did not indicate that absent the sensors the collating unit would not work.

Additionally, the Federal Circuit noted that when a specification is ambiguous, then the original claims can help to resolve the ambiguity. In this case, the court stated that the fact that the original claims omitted a sensor supports the conclusion that the sensors are optional.

The Federal Circuit thus reversed the district court’s determination, as the specification creates a genuine issue of material fact on the question of whether a skilled artisan may be able to reasonably read the specification as teaching a specific means of achieving the purpose of the invention without sensors.  

Litigation Practice and Procedure: Procedure: Summary Judgment: Sufficiency of Evidence at Trial
Infringement: Hatch-Waxman Act
Defenses: Fraud and Inequitable Conduct: Generally
Patents and Antitrust Law

Tyco Healthcare Group LP, et al. v. Mutual Pharmaceutical Co., et al., No. 13-1386 (Fed. Cir. (D.N.J.) Aug. 6, 2014). Opinion by Bryson, joined by Moore. Dissenting opinion by Newman.

In considering the district court’s grant of summary judgment, the Federal Circuit reversed and remanded to the district court for a determination of whether Tyco Healthcare Group LP and Mallinckrodt, Inc.’s (collectively “Tyco”) infringement claims support a finding of sham litigation. Next, the Federal Circuit vacated and remanded a ruling that Tyco’s citizen petition to the Federal Drug Administration (“FDA”) was not a sham, as the district court had applied an incorrect standard. Finally, the Federal Circuit affirmed the district court’s grant of summary judgment for Tyco with respect to a sham-litigation claim premised upon Tyco’s alleged lack of a reasonable prospect of success in defending the validity of its patents.

Mutual Pharmaceutical Company, Inc. and United Research Laboratories, Inc. (collectively “Mutual”) filed an Abbreviated New Drug Application (“ANDA”) seeking a generic version of temazepam, a drug used to treat insomnia. Tyco marketed temazepam under the brand name Restoril and owns U.S. Patent No. 5,211,954 (“the ’954 patent”), which claims particular formulations of temazepam.

Tyco filed a complaint in the U.S. District Court for the District of New Jersey for patent infringement based on Mutual’s ANDA assertions, and Mutual raised antitrust and invalidity counterclaims in response. The district court stayed the antitrust counterclaims while proceeding on issues of infringement. The district court ultimately found that Mutual did not infringe Tyco’s patent and granted summary judgment to Mutual, ruling that the claims of the ’954 patent are invalid, which the Federal Circuit previously affirmed. After the first appeal, the district court lifted the stay on the antitrust counterclaims and granted summary judgment to Tyco on all of those counterclaims.

On appeal, Mutual argued that Tyco is subject to antitrust liability because Tyco’s infringement claims and validity challenge, and its citizen petition filed with the FDA, constituted sham litigation. Mutual further asserted that Tyco’s infringement action was the product of fraud.

Regarding the infringement claims, a party is ordinarily exempt from antitrust liability for bringing a lawsuit against a competitor. An exception to this immunity is sham litigation, which requires the litigation to be objectively baseless and subjectively motivated by a desire to directly interfere with a competitor’s business. While finding it not unreasonable for a patent owner to allege infringement under 35 U.S.C. § 271(e)(2)(A), the Federal Circuit reversed the grant of summary judgment, finding a genuine issue of material fact regarding the claimed temperatures at which the specific surface area are measured. The court thus remanded for a determination of whether Tyco’s infringement theory was objectively baseless.

Regarding the reasonableness of Tyco’s position with respect to the validity of the ’954 patent, the Federal Circuit held that Mutual had not met its burden to establish that Tyco’s validity arguments were objectively baseless, even though those arguments were ultimately unsuccessful. The Federal Circuit thus affirmed the district court regarding the invalidity portion of the sham litigation counterclaim.

Regarding the citizen petition, the Federal Circuit vacated the district court’s ruling that Tyco’s citizen petition to the FDA was not a sham because the district court applied an incorrect standard. Thus, the Federal Circuit remanded for the district court to determine if there was any anticompetitive harm suffered as a result of the filing of the citizen petition.

Next, the Federal Circuit addressed allegations that the litigation was a product of fraud. Mutual argued that Tyco had at least constructive knowledge of fraud performed by the original patent applicants, from whom Tyco bought the ’954 patent, based on redacted material in a prior art reference in the prosecution history. The Federal Circuit held that there was insufficient evidence to meet Mutual’s burden of showing intentional fraud involving affirmative dishonesty.

In a dissenting opinion, Judge Newman stated that the majority created several new grounds of antitrust liability for routine patent litigation. Judge Newman opined that Tyco’s Hatch-Waxman litigation and report to the FDA are in accordance with the law and the Constitution and that they do not raise antitrust issues under the Sherman Act.  

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