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.
Plastipak Packaging, Inc. v. Premium Waters, Inc., No. 2021-2244 (Fed. Cir. (W.D. Wis.) (Dec. 19, 2022). Opinion by Stark, joined by Newman and Stoll.
Plastipak sued Premium Waters for infringement of twelve patents directed to plastic containers having a neck portion, a tamper-evident formation (“TEF”), and a support flange. Seven of the patents claim a neck portion having a specified vertical length or X dimension (the “X Dimension Patents”), and the other five claim a discontinuous TEF (the “Discontinuous TEF Patents”). All twelve patents list two individuals, Darr and Morgan, as the only inventors. Premium Waters argued that another individual, Falzoni, should have been named as a co-inventor. The district court granted summary judgment in favor of Premium Waters, finding that all twelve patents were invalid for nonjoinder of Falzoni under pre-AIA 35 U.S.C. § 102(f). Plastipak appealed.
The Federal Circuit reversed and remanded because a reasonable factfinder could determine that Falzoni was not a co-inventor of the X Dimension Patents or the Discontinuous TEF Patents. The court explained that “although the District Court may be correct that Premium Waters presented an ‘overwhelming’ amount of evidence, that does not mean Plastipak presented an insufficient amount of evidence from which a reasonable factfinder could find . . . that Falzoni was not a joint inventor.”
Regarding the X Dimension Patents, Premium Waters primarily relied on an email from Falzoni to Darr that included a 3D model of the neck finish as well as testimony by Falzoni corroborating that the 3D model included the X Dimension Limitation. Plastipak presented contrary evidence in an attempt to show that Darr and Morgan conceived their inventions independently of Falzoni. Although the Federal Circuit “agree[d] with Premium Waters that it presented sufficient evidence from which a reasonable factfinder may find clear and convincing evidence that Falzoni was a joint inventor of the X Dimension Patents,” the Federal Circuit concluded that “nothing in the record requires a reasonable factfinder—particularly one who is resolving all fact disputes, and drawing all reasonable inferences, in Plastipak’s favor—to make these necessary findings.”
The Federal Circuit reached a similar conclusion for the Discontinuous TEF Patents. Plastipak and Premium Waters disputed whether using a discontinuous TEF was novel or instead was part of the state of the art. The court held that “there is, at a minimum, a genuine dispute of material fact as to whether Falzoni contributed anything other than what was already the state of the art.” The court ruled that “resolution of this fact dispute is necessary in order to determine whether Falzoni was a joint inventor,” and so “summary judgment of invalidity of the Discontinuous TEF Patents is not proper.”
View Opinion
Mosaic Brands, Inc., et al. v. Ridge Wallet LLC, Nos. 2022-1001, -1002 (Fed. Cir. (C.D. Cal.) Dec. 20, 2022). Opinion by Stark, joined by Newman and Prost.
Mosaic Brands and Ridge Wallet make competing money-clip wallets. Mosaic sued Ridge for patent and trade dress infringement, and Ridge counterclaimed for patent infringement. Mosaic responded with affirmative defenses of invalidity and unenforceability due to inequitable conduct during the prosecution of Ridge’s patent.
The district court construed the terms “lip” and “of varying thickness” in Mosaic’s patent, and based on those constructions Mosaic stipulated to noninfringement. The parties then moved for summary judgment on various issues. The district court granted summary judgment of invalidity of Ridge’s patent based on anticipation by Mosaic’s Smart Money Clip II (SMCII). The court also denied Mosaic’s motion for summary judgment that Ridge’s patent was unenforceable based on alleged inequitable conduct. The court also awarded Ridge summary judgment on Mosaic’s trade dress claim, finding the trade dress invalid on multiple grounds. The district court entered final judgment of no liability by either party. Both parties appealed.
The Federal Circuit affirmed the district court’s claim construction for Mosaic’s patent, thus resolving the question of infringement. First, the district court “did not err in construing ‘lip’ as being limited to extrudable plastic materials” because the patent’s written description “disclaim[ed] inventions constructed out of materials other than extrudable plastic.” Next, Mosaic “fail[ed] to explain what is incorrect about the District Court’s construction [for ‘of varying thickness’] or how it deviates from the plain and ordinary meaning.”
Next, the Federal Circuit reversed the district court’s summary judgment of invalidity of Ridge’s patent based on anticipation by the SMCII. The Federal Circuit explained that “whether the SMCII is prior art to Ridge’s . . . patent depends on when units of the SMCII, which indisputably contained all of the elements of Ridge’s claims, were first sold.” The inventor of the SMCII testified that the first sales occurred in 2011, and Ridge disputed that evidence. The Federal Circuit ruled that summary judgment was inappropriate, stating: “The District Court appears to have based its summary judgment decision, at least in part, on its belief that Ridge produced no affirmative evidence challenging [the inventor’s] testimony. This was not consistent with our precedent, which holds that affirmative evidence is not always necessary in order to create a genuine dispute.”
Having reversed the district court’s summary judgment of invalidity, the Federal Circuit also vacated the district court’s denial of summary judgment on Mosaic’s inequitable conduct defense. The district court’s ruling was premised on a conclusion that the SMCII was material prior art to Ridge’s patent, which “will need to be reevaluated” once it is determined “whether the SMCII is even prior art.”
Lastly, the Federal Circuit affirmed the district court’s summary judgment that Mosaic’s trade dress was invalid for being functional. The Federal Circuit ruled that “Mosaic did not meaningfully dispute the relevant acts, even though it bears the burden to show that its trade dress is non-functional.”
View Opinion
Genentech, Inc., et al. v. Sandoz Inc., et al., No. 2022-1595 (Fed. Cir. (D. Del.) Dec. 22, 2022). Opinion by Lourie, joined by Prost. Judge Newman dissented without opinion.
Genentech manufactures and sells pirfenidone, which is a drug approved to treat idiopathic pulmonary fibrosis (IPF), a chronic, incurable, and irreversible lung disease. Sandoz submitted two Abbreviated New Drug Applications seeking approval from the FDA to market a generic version of pirfenidone. Genentech then brought a Hatch-Waxman suit asserting that Sandoz’s generic product would induce the infringement of Genentech’s Liver Function Test (LFT) patents and Drug-Drug Interaction (DDI) patents.
The district court held that the LFT patents were invalid as obvious over Azuma (a pirfenidone clinical trial report), the label for Pirespa®, and known, standard medical practices. The court also held that the sale of Sandoz’s generic drug would not induce infringement of the LFT patents or directly infringe the DDI patents. Genentech appealed.
The Federal Circuit affirmed. Regarding the LFT patents, the district court “properly held that the specific dose modifications claimed in the LFT patents would have been obvious over the disclosures in Azuma and the Pirespa® label, combined with well-known standard medical practices.” Genentech argued that Azuma and the Pirespa® label failed to literally disclose certain claim limitations, and that the district court’s decision lacked sufficient evidentiary support. The Federal Circuit disagreed. Both Azuma and the Pirespa® label discuss the same reescalation and dose reduction techniques, and “the district court’s interpretation of Azuma and the Pirespa® label … relied on extensive record evidence,” including expert testimony, FDA guidance, and standard medical practices. The Federal Circuit also determined that Genentech’s evidence of objective indicia of nonobviousness did not establish skepticism or a long-felt, unmet need for the claimed methods.
Next, the Federal Circuit affirmed the district court’s finding of no direct infringement of the DDI patents. Genentech argued on appeal that Sandoz’s proposed label “encourages, recommends, and promotes infringement,” and that the district court erred by considering additional evidence beyond the label. The Federal Circuit disagreed with Genentech’s view, explaining that “we regularly consider evidence outside a proposed label in evaluating whether a product will be used in a way that directly infringes method claims.” Here, “the district court did not clearly err by considering all the relevant evidence, including Sandoz’s proposed label and physician practice.” Thus, Genentech did not meet its burden to show that if Sandoz’s drug were put on the market, it would directly infringe.
View Opinion
Patent Quality Assurance, LLC, et al. v. VLSI Technology, LLC, No. IPR2021-01229 (Dec. 22, 2022) (precedential). Opinion by Vidal.
After VLSI sued Intel in district court for patent infringement, Intel filed two IPR petitions challenging the VLSI patent, but the Patent Trial and Appeal Board exercised its discretion to deny institution under Fintiv. The litigation eventually resulted in a jury verdict against Intel.
Following the verdict, OpenSky filed an IPR petition challenging the VLSI patent. Shortly after, PQA filed a separate IPR petition challenging the VLSI patent. In both petitions, OpenSky and PQA copied extensively from Intel’s petitions, including refiling Intel’s supporting declaration of Dr. Singh with minor changes.
PQA then sought to avoid discretionary denial of its petition in favor of OpenSky’s earlier petition by arguing that OpenSky’s petition was defective. In particular, PQA asserted that it had exclusively engaged Dr. Singh, and thus OpenSky’s petition was defective since OpenSky would not be able to present Dr. Singh for cross-examination. Meanwhile, VLSI challenged the Board’s institution decision on the ground that PQA’s petition and related actions constituted an abuse of the IPR process.
Director Vidal initiated review to address questions of first impression as to what actions should be considered when addressing allegations of abuse of process or conduct that thwarts the goals of the USPTO and the AIA. The Director ordered the parties to brief the issues, exchange certain information, and answer interrogatories. PQA, however, “did not comply” because “it produced a minimal number of documents … and provided wholly inadequate answers to [the] interrogatories.” As a sanction, the Director applied a negative inference and held facts to have been established adverse to PQA.
Director Vidal also found that “PQA, through its counsel, abused the IPR process.” The abuse included “advancing a misleading argument and a misrepresentation of fact by representing, in its Petition, that it had exclusively engaged Dr. Singh.” In addition, “PQA abused the IPR process by filing this IPR, and threatening to file another IPR petition seeking to join a related, instituted IPR by OpenSky, in an attempt to extract payment from VLSI.” She concluded that “the totality of PQA’s conduct evinces a singular focus on using an AIA proceeding to extort money.” Thus, PQA’s behavior was “an abuse of process” and was “entirely distinguishable from conventional settlement negotiations that take place in an adversarial proceeding.” “Each aspect of PQA’s conduct—discovery misconduct, violation of an express order, abuse of the IPR process, advancing a misleading argument, and a misrepresenting of fact—taken alone, constitutes sanctionable conduct. … Taken together, the behavior warrants sanctions.”
As a sanction, the Director dismissed PQA from the IPR proceeding and ordered PQA “to show cause as to why it should not be ordered to pay compensatory damages to VLSI, including attorney fees, to compensate VLSI for its time and effort in this proceeding.”
On the merits, the Director considered whether to terminate the IPR. She determined that “the unique dynamics of this case, coupled with the public interest in evaluating patent challenges with compelling merits, counsels that I permit this IPR to continue only if the unpatentability merits were compelling as of the time of institution and on the record as it existed at that time.” She concluded that PQA’s petition indeed “presents a compelling, meritorious challenge” and thus allowed the IPR to continue.