Patent Case Summaries June 27, 2022

Patent Case Summaries | Week Ending June 24, 2022

A weekly summary of the precedential patent-related opinions issued by the Court of Appeals for the Federal Circuit and the opinions designated precedential or informative by the Patent Trial and Appeal Board.

Centripetal Networks, Inc. v. Cisco Systems, Inc., No. 2021-1888 (Fed. Cir. (E.D. Va.) June 23, 2022). Opinion by Dyk, joined by Taranto and Cunningham.

Centripetal sued Cisco for infringement of ten patents related to systems that perform computer networking security functions. Following a 22-day bench trial, the district court entered judgment that Cisco willfully infringed various claims of the asserted patents, and awarded enhanced damages and royalties exceeding $2.75 billion to Centripetal.

While the case was pending, the district court judge learned that his wife owned 100 shares of Cisco stock valued at $4,687.99. The judge informed the parties and explained that when he learned about the stock, a full draft of the opinion had already been prepared, and virtually every issue had been decided. Cisco moved for a recusal, and the district court denied the motion. Cisco appealed.

The Federal Circuit held that the district court judge was disqualified from hearing the case once he became aware of his wife’s ownership of Cisco stock. As a result, the Federal Circuit reversed the district court’s denial of Cisco’s motion for recusal, vacated all orders and opinions entered after the judge had learned of the stock ownership (including the final judgment), and remanded for further proceedings before a different judge.

According to the Federal Circuit, the judge was required to recuse under 28 U.S.C. § 455(b) absent divestiture under § 455(f). Here, the requirements of § 455(f) were not satisfied. Although the stock was placed in a blind trust, that did not constitute divestment under § 455(f). It removed control over the stock, but did not eliminate the beneficial interest.

The Federal Circuit next analyzed the proper remedy, which turned primarily on whether the judge’s failure to disqualify himself was harmless error. Applying the relevant factors, the Federal Circuit ruled that the risk of injustice and preservation of public confidence weighed against a finding of harmless error and in favor of vacatur. But because § 455(b) requires “actual knowledge” of disqualifying circumstances, the only rulings subject to the vacatur were those issued after the judge learned of his wife’s financial interest in Cisco.

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Novartis Pharmaceuticals Corp. v. Accord Healthcare, Inc., et al., No. 2021-1070 (Fed. Cir. (D. Del.) June 21, 2022). Opinion by Moore, joined by Hughes. Dissenting opinion by Linn.  

HEC petitioned for rehearing of the Federal Circuit’s January 2022 decision affirming a district court’s determination that certain claims of a Novartis patent were infringed and not invalid.

In the appeal, HEC had argued that the patent claims are invalid because a priority application lacked adequate written description of a 0.5 mg daily dose limitation and a “no-loading-dose” negative limitation required by the claims. In a majority opinion authored by Judge O’Malley and joined by Judge Linn, the Federal Circuit agreed and affirmed, ruling that the claims have adequate written description support. Chief Judge Moore dissented as to the negative no-loading-dose limitation, explaining that the priority application was silent as to a loading dose, and “silence is not disclosure.”

When HEC petitioned for rehearing, Judge Hughes replaced Judge O’Malley on the panel given her retirement from judicial service. The Federal Circuit then granted the petition and, in a new opinion authored by Chief Judge Moore, vacated the prior judgment and ruled that the claims are invalid for inadequate written description.

In the new opinion, the Federal Circuit explained that, “for negative claim limitations, like the no-loading-dose limitation at issue here, there is adequate written description when, for example, the specification describes a reason to exclude the relevant element.” “A reason to exclude an element could be found in statements in the specification expressly listing the disadvantages of using that element,” or where “the specification distinguishes among the element and alternatives to it.”

The court explained that “the common denominator of these examples is disclosure of the element,” and “silence is generally not disclosure.” Additionally, “while a negative limitation need not be recited in the specification in haec verba, there generally must be something in the specification that conveys to a skilled artisan that the inventor intended the exclusion, such as a discussion of disadvantages or alternatives.”

Here, the specification was silent regarding whether to use or not use a loading dose. Thus, the district court clearly erred in finding that the negative claim limitation had adequate written description support.

Judge Linn dissented. At the outset, he noted the majority’s recognition that “written description support is a fact-based inquiry based on the understandings of a person of ordinary skill in the art,” and that “the standard for negative limitations is the same as for any other limitation.” But, he explained, the majority “nonetheless applies a heightened written description standard to the facts of this case in requiring not only a ‘reason to exclude’ but a showing that the negative limitation in question was ‘necessarily excluded.’” In Judge Linn’s view, the district court “applied the correct standard and found ample support in the written description for the no-load limitation.”

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