Patent Case Summaries August 24, 2022

Patent Case Summaries | Week Ending August 19, 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.

Click-to-Call Technologies LP v. Ingenio, Inc., et al., No. 2022-1016 (Fed. Cir. (W.D. Tex.) Aug. 17, 2022). Opinion by Stoll, joined by Schall and Cunningham.

After being sued for patent infringement, Ingenio filed an IPR challenging the patentability of the asserted claims. The Patent Trial and Appeal Board only partially instituted the IPR. In the Board’s final written decision, the Board was persuaded by the unpatentability grounds based on one reference, Dezonno, but refused to consider grounds based on another reference, Freeman. Notably, the Freeman grounds challenged asserted claim 27, while the Dezonno grounds did not.

While the appeal of that ruling was pending, and while the district court case was stayed, the Supreme Court decided SAS Institute, which overruled the practice of partial institutions. Ingenio, however, never sought remand under SAS for the Board to consider Ingenio’s challenge to claim 27.

The district court then revived the case, and Ingenio moved for summary judgment arguing that the only asserted claim not held unpatentable in the IPR, claim 27, was invalid based on Dezonno. Click-to-Call responded that Ingenio was estopped from pressing that invalidity ground due to IPR estoppel under 35 U.S.C. § 315(e)(2). Rather than address estoppel under § 315(e)(2), the district court addressed only standard issue preclusion and found that the issue of claim 27’s validity was not “actually litigated” and, therefore, Ingenio was not precluded. The court then granted summary judgment. Click-to-Call appealed.

The Federal Circuit reversed as to issue preclusion, ruling that the district court erred in not applying IPR estoppel to claim 27 based on Dezonno. The Federal Circuit held “as a matter of law that IPR estoppel applies.” Also, the Federal Circuit ruled that “the district court erred in failing to address the basis of Click-to-Call’s argument,” which was premised on § 315(e)(2) not standard issue preclusion.

Addressing the district court’s rejection of Click-to-Call’s estoppel argument under the “actually litigated” prong of issue preclusion, the Federal Circuit explained that “IPR estoppel has no such express requirement.” And the Federal Circuit explained that it “would not be reasonable to engraft such a requirement into IPR estoppel, given that the IPR statute also estops grounds that ‘reasonably could have [been] raised.’”

The Federal Circuit also addressed the merits of Click-to-Call’s IPR estoppel argument and held that invalidity of claim 27 based on Dezonno “is a ground that Ingenio ‘reasonably could have raised’ in the IPR.” Ingenio included claim 27 in its IPR petition, and the petition resulted in a final written decision. “The fact that the Board, due to a legal error corrected by SAS, failed to include claim 27 in its final written decision does not absolve Ingenio of the estoppel triggered by its choice to challenge claim 27 at the Board.” Ingenio did not seek a SAS remand directing the Board to address its non-instituted claims and grounds, and “Ingenio’s choice to leave unremedied the Board’s mistake does not shield it from estoppel.” Thus, IPR estoppel applied.

Separately, Click-to-Call argued that the district court abused its discretion in not allowing Click-to-Call to amend its selection of asserted claims to add two claims that were not at issue in the IPR. The Federal Circuit affirmed that ruling under the “highly deferential lens for an abuse of discretion” applicable to “a decision concerning the management of a district court’s case docket.”

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Par Pharmaceutical, Inc., et al. v. Eagle Pharmaceuticals, Inc., No. 2021-2342 (Fed. Cir. (D. Del.) Aug. 18, 2022). Opinion by Moore, joined by Prost and Hughes.

Par manufactures and sells Vasostrict®, a vasopressin injection product used to treat patients with critically low blood pressure. Par owns two patents directed to vasopressin compositions and methods of increasing blood pressure using those compositions. The claims of both patents require the vasopressin composition to have a rounded pH between 3.7 and 3.9, i.e., between 3.65 and 3.94 before rounding.

Eagle filed an ANDA to manufacture and sell a generic version of Vasostrict®. Eagle represented in its release specification that the pH range would be between 3.4 and 3.6, i.e., between 3.35 and 3.64 before rounding. Eagle’s ANDA included a certification that Par’s patents are invalid or will not be infringed by Eagle’s proposed product.

Par then sued Eagle for infringement under 35 U.S.C. § 271(e)(2) and sought a declaratory judgment that Eagle’s product would infringe under § 271(a) and (b). Eagle stipulated that its product would meet all asserted claim limitations except the claimed pH range of 3.7–3.9. Par argued that “real-world” evidence shows that the pH of Eagle’s product “drifts up over time,” and thus would fall within the infringing range. Par also observed that Eagle had sought authority to release a product with a pH as high as 3.64, just 0.01 beneath the infringing range.

Following a three-day bench trial, the district court found no infringement. The court found that the minor fluctuations in pH value did not reveal any discernible trend, let alone “a steady and inevitable” upward drift. Also, while the product’s release specification required a pH of up to 3.64 before rounding, the stability specification imposed an additional constraint that the product maintain a pH between 3.4 and 3.6 from the time of distribution through the entirety of its shelf life.

On appeal by Par, the Federal Circuit affirmed. The Federal Circuit stated that “the inquiry begins and ends with Eagle’s ANDA specification.” Both the release specification and stability specification for Eagle’s proposed product “directly and unambiguously address the pH range of Eagle’s proposed product and thus speak directly to infringement.” Together, the specifications restrict the pH to between 3.4 and 3.6, which is outside the infringing range. Notably, Par cited no evidence that Eagle would not comply with its specifications. And “the district court’s finding that there was no upward pH drift in Eagle’s post-release pH data was not clear error.”

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