Patent Case Summaries December 13, 2023

Patent Case Summaries | Week Ending December 8, 2023

H. Lundbeck A/S, et al. v. Lupin Ltd., et al., Nos. 2022-1194, -1208, -1246 (Fed. Cir. (Del.) Dec. 7, 2023). Opinion by Dyk, joined by Prost and Hughes.

Takeda U.S.A., Inc. holds the approved New Drug Application for the branded drug Trintellix® for the treatment of major depressive disorder (MDD) in adults. Trintellix’s active ingredient is a salt of vortioxetine. Following the initial FDA approval of the use of Trintellix to treat MDD, Takeda and others (collectively “plaintiffs”) secured two method of use patents for the use of the drug vortioxetine in patients who have taken certain antidepressant medications and had to cease or reduce use due to adverse events.

Lupin and others (collectively “defendants”) submitted Abbreviated New Drug Applications (ANDAs) seeking approval to market vortioxetine for only one indication, the treatment of MDD in adults, a method of use not covered by the plaintiffs’ patents. The plaintiffs nonetheless contended that the two method of use patents preclude approval of the defendants’ ANDAs, and so they sued for infringement.

After a bench trial the district court determined that the defendants’ ANDAs neither induced infringement nor contributorily infringed the plaintiffs’ patents. The plaintiffs appealed.

The Federal Circuit affirmed the judgment of noninfringement. The plaintiffs argued that 35 U.S.C. § 271(e)(2)(A) creates a separate cause of action that does not require a showing of direct, induced, or contributory infringement by the ANDA filer. According to the plaintiffs, “it makes no difference that the drug is proposed to be sold for a use not covered by the [two method of use] patents because the drug could be prescribed for those patented uses.” The Federal Circuit disagreed, explaining: “Our cases establish that ‘the use … claimed in a patent’ under section 271(e)(2)(A) must be the use for which an applicant is seeking marketing approval.”

As for induced infringement, the Federal Circuit stated that they “do not see how, in the normal course, a label required to market the drug for a use covered by expired patents could demonstrate the required specific intent to encourage infringement of new patents covering different uses.”

As for contributory infringement, the Federal Circuit agreed with the district court that there is no contributory infringement because there are substantial noninfringing uses of vortioxetine. The plaintiffs argued that the alleged noninfringing uses are in fact infringing uses because they purportedly infringe other patents, specifically patents on the drug compound. The Federal Circuit disagreed because “substantial noninfringing use in section 271(c) refers to uses that do not infringe the patent in question, not other patents.”

Lastly, and separately, the Federal Circuit addressed a third patent, which is directed to a process for manufacturing vortioxetine. Lupin filed an ANDA seeking approval to market vortioxetine prepared by a process that the plaintiffs contended will infringe. The parties disputed the construction of the term “reacting.” After a bench trial, the district court agreed with the plaintiffs’ construction and found that Lupin infringes under that construction. Lupin appealed the determination, but the Federal Circuit upheld the construction and thus the finding of infringement. According to the court, “nothing in the claims, specification, or file history requires Lupin’s narrower reading” of the term.

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VLSI Technology LLC v. Intel Corp., No. 2022-1906 (Fed. Cir. (W.D. Tex.) Dec. 4, 2023). Opinion by Taranto, joined by Lourie and Dyk.

VLSI sued Intel for infringement of two patents, and the case proceeded to a jury trial. The jury found that Intel infringed the first patent literally and infringed the second patent under the doctrine of equivalents. The jury awarded VLSI nonoverlapping lump-sum damages for all past and future infringement—$1.5 billion for the first patent and $675 million for the second.

Following trial, the district court denied Intel’s post-trial motions on infringement and damages and denied Intel’s pretrial motion seeking to add a license defense. Intel appealed.

Addressing infringement, the Federal Circuit first affirmed the judgment of literal infringement. The court ruled that substantial evidence supported the jury verdict for VLSI: “There is ample expert testimony, with adequate support in Intel’s internal documents,” to support the verdict. “The jury could reasonably credit VLSI’s evidence that [a] comparison presented by Intel was faulty,” and “the jury reasonably could credit [VLSI’s] evidence and reject Intel’s contention.”

Turning to the second patent, the Federal Circuit reversed the judgment of infringement under the doctrine of equivalents. The court ruled that VLSI’s proof of equivalence was insufficient. The court explained that “VLSI had to prove—with particularized testimony and linking argument—that the elements of the Intel arrangement were substantially the same as the elements of the claimed arrangement,” “but VLSI offered no meaningful testimony doing so.” Thus, based on the evidence presented, the Federal Circuit ruled that “VLSI’s doctrine of equivalents theory fails as a matter of law.”

The Federal Circuit next considered Intel’s challenges to the damages award of $1.5 billion for the infringed patent. The analysis by VLSI’s experts involved four steps “to identify the incremental value over non-infringing alternatives added to Intel’s accused products by use of the asserted patents and the share of that value that Intel and VLSI would have agreed” to in a hypothetical negotiation.

The Federal Circuit vacated the award because the analysis involved “a readily identifiable error.” VLSI’s technical expert, whose opinions were relied on by VLSI’s damages expert, had used inputs that did not involve the infringing functionality. The Federal Circuit could not “deem this step in the damages calculation harmless as to the bottom-line amount of damages,” and so the court ruled that “the damages award must be set aside.” The Federal Circuit remanded for a new trial on damages.

Lastly, the Federal Circuit addressed—and reversed—the district court’s denial of Intel’s motion to add a license defense. In 2012, Finjan had granted Intel a license to patents owned and controlled by Finjan’s “affiliates.” In 2020, Fortress Investment Group (which controls VLSI) acquired control of Finjan, making both VLSI and Finjan “affiliates” under the Finjan-Intel license agreement. Intel argued that the license thus newly covered VLSI’s patents-in-suit.

The district court denied the motion on the grounds that it was untimely, prejudicial, and unimportant because of the futility of the defense. The Federal Circuit concluded that the district court abused its discretion in denying Intel’s motion. For instance, as to “the soundness of the district court’s conclusion that the record developed makes the license defense so clearly meritless that allowing it even to be pleaded is a futile act,” the Federal Circuit deemed that conclusion “to be wrong as a matter of law.”

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