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.
Bozeman Financial LLC v. Federal Reserve Bank of Atlanta, et al., No. 2019-1018 (Fed. Cir. (PTAB) Apr. 10, 2020). Opinion by Moore, joined by Lourie and Dyk.
The Federal Circuit affirmed the Patent Trial and Appeal Board’s decision in covered business method (CBM) review holding all challenged claims ineligible under 35 U.S.C. § 101. In its analysis, the Federal Circuit held that the Federal Reserve Banks are “persons” who may petition for post-issuance review under the America Invents Act.
Bozeman argued that the Federal Reserve Banks are government entities, which the Supreme Court held in Return Mail are not “persons” under the AIA. The Banks responded that they “are chartered corporate instrumentalities of the United States, which are distinct from the sovereign because they are not part of any executive agency or department.” The Federal Circuit agreed with the Banks, ruling that, unlike the Postal Service in Return Mail, “the Banks’s enabling statute does not establish them as part of an executive agency, but rather each bank is a ‘corporate body.’” The court also found it “significant that the Banks are subject to suit for patent infringement in any court.” Thus, the Banks are distinct from the government for purposes of the AIA.
The Federal Circuit next addressed the Board’s determinations holding the challenged claims ineligible. The court limited its analysis to only one of the challenged patents because Bozeman had not separately argued the eligibility of the claims in a second patent.
The Federal Circuit affirmed the ineligibility determination. Under step one of the Alice framework, the Federal Circuit agreed that the claims are directed to the abstract idea of “collecting and analyzing information for financial transaction fraud or error detection.” The court explained: “Verifying financial documents to reduce transactional fraud is a fundamental business practice that, without more, is not eligible for patent protection.” Under Alice step two, the Federal Circuit considered whether the claims contain “an inventive concept sufficient to ‘transform the nature of the claims into patent-eligible applications of an abstract idea.’” The Federal Circuit agreed with the Board that there is nothing additional in the claims that render them patent-eligible. In its analysis, the Federal Circuit disagreed with Bozeman’s argument that the claims “meet the machine-or-transformation test by transforming a paper check into financial data.” The court explained that “Bozeman’s use of a digital-image scanner to create a digital electronic record of a check” does not meet that test.
Golden v. United States, No. 2019-2134 (Fed. Cir. (Fed. Cl.) Apr. 10, 2020). Opinion by O’Malley, joined by Mayer and Wallach.
The Federal Circuit affirmed a dismissal of Golden’s claims for failure to state a claim upon which relief can be granted and for alleging a duplicative claim over which the trial court lacked jurisdiction.
Golden filed suit in the Court of Federal Claims against the United States pursuant to 28 U.S.C. § 1491(a). Golden sought “reasonable and entire compensation for the unlicensed use and manufacture” of his “inventions described in and covered by” various patents. Certain of these patents were also involved in another proceeding before the Court of Federal Claims (the “Lead Case”) and in an IPR. In the new suit, Golden alleged a Fifth Amendment taking of his patented subject matter. The Court of Federal Claims held that the takings claims were duplicative of claims in the Lead Case that the court had recently dismissed. Golden appealed.
On appeal, Golden argued that the trial court improperly dismissed his takings claims based on (1) the government’s infringement of his patents, (2) the institution of the IPR, and (3) the Claims Court’s dismissal of his causes of action relating to patent claims that were “unjustly cancelled in the IPR.” The Federal Circuit rejected each argument.
First, the Federal Circuit considered the dismissal of Golden’s patent infringement-based takings claims. The Federal Circuit agreed that the Court of Federal Claims lacked jurisdiction over these claims pursuant to § 1491 “because patent infringement claims against the government are to be pursued exclusively under” § 1498.
Next, the Federal Circuit addressed Golden’s IPR-based takings claims. As an initial matter, the Federal Circuit rejected the government’s argument that the America Invents Act displaced Tucker Act jurisdiction over these claims. On the merits, the court rejected Golden’s argument that the government’s actions resulted in a reduction of value of his property, destroyed his competitive edge, and interfered with his investment expectations. The Federal Circuit explained that it recently rejected similar arguments in Celgene.
Finally, the Federal Circuit addressed Golden’s arguments regarding alleged takings by the Claims Court. The Federal Circuit held that court actions “cannot be an unconstitutional taking” because the courts only adjudicate rights in patents.
Nike, Inc. v. Adidas AG, No. 2019-1262 (Fed. Cir. (PTAB) Apr. 9, 2020). Opinion by Stoll, joined by Lourie and Chen.
The Federal Circuit determined that the Patent Trial and Appeal Board did not comply with the due process provisions of the Administrative Procedures Act (APA) and thus remanded for further proceedings.
In a prior appeal, the Federal Circuit had affirmed-in-part and vacated-in-part a Board decision issued in an IPR where Adidas had challenged certain claims of a Nike patent. On remand, the Board denied Nike’s motion to enter substitute claims 47–50, finding that Adidas proved that the substitute claims are unpatentable as obvious. As part of the denial, the Board found that a limitation of substitute claim 49 was well known in the art based on a prior art reference that, while in the record, was never cited by Adidas for disclosing that limitation. Nike appealed.
The Federal Circuit concluded that Nike was not afforded notice of the Board’s theory of unpatentability as to substitute claim 49, and thus vacated the Board’s decision on that issue. The court stated: “We hold today that the Board may sua sponte identify a patentability issue for a proposed substitute claim based on the prior art of record. If the Board sua sponte identifies a patentability issue for a proposed substitute claim, however, it must provide notice of the issue and an opportunity for the parties to respond before issuing a final decision under 35 U.S.C. § 318(a).” The court noted that it “do[es] not decide today whether the Board may look outside of the IPR record in determining the patentability of proposed substitute claims.” The Federal Circuit reserved that question for another day.
The Federal Circuit also ruled that substantial evidence supported the Board’s determination that Nike’s evidence of long-felt but unmet need was insufficient to establish the nonobviousness of substitute claims 47–50.
Nevro Corp. v. Boston Scientific Corp., et al., Nos. 2018-2220, -2349 (Fed. Cir. (N.D. Cal.) Apr. 9, 2020). Opinion by Moore, joined by Taranto and Chen.
Nevro sued Boston Scientific for infringement of seven patents directed to high-frequency spinal cord stimulation therapy for inhibiting an individual’s pain. The district court issued a joint claim construction and summary judgment order holding certain claims invalid as indefinite. The district court ruled that the remaining claims were not indefinite and granted Boston Scientific summary judgment of noninfringement. Nevro appealed the judgment of invalidity, and Boston Scientific cross-appealed the determination that the remaining claims were not indefinite.
The Federal Circuit vacated and remanded the district court’s rulings of indefiniteness, addressing four claim terms at issue: “paresthesia-free,” “configured to,” “means for generating,” and “therapy signal.” For the first term, the Federal Circuit concluded that the district court correctly determined that the “paresthesia-free” method claims are not indefinite, but erred in holding indefinite the “paresthesia-free” system and device claims. The Federal Circuit noted that indefiniteness requires considering whether a claim informs those skilled in the art about the scope of the invention with reasonable certainty, “not whether infringement of the claim must be determined on a case-by-case basis” as the district court believed. The claims and specification recited sufficient parameters to satisfy the proper standard.
For the second term, “configured to,” the Federal Circuit held that the district court again applied the wrong legal standard for indefiniteness. The district court found the term indefinite because the term was susceptible to differing constructions, but the Federal Circuit noted that the Supreme Court in Nautilus expressly declined to adopt such a rule. The Federal Circuit construed the term to mean “programmed to,” relying on the specifications of the asserted patents and on statements by Nevro in the prosecution of a related patent application.
For the next term, “means for generating,” the parties had agreed it was in means-plus-function format, and both parties identified corresponding structure. The district court, however, held the term indefinite as lacking an adequate disclosure of corresponding structure in the specification. The Federal Circuit disagreed, ruling that Nevro had identified the correct structure—a signal generator. The Federal Circuit explained that “the specification clearly recites a signal or pulse generator, not a general-purpose computer or processor, as the structure for the claimed ‘generating’ function.”
For the final term, “therapy signal,” the Federal Circuit held that the district court correctly determined that the term was not indefinite, but the district court nonetheless erred in its construction of the term. Based on the claim language, specification, and prosecution history, the Federal Circuit concluded that a “therapy signal” is “a spinal cord stimulation or modulation signal to treat pain.”
BASF Corp. v. SNF Holding Co., No. 2019-1243 (Fed. Cir. (S.D. Ga.) Apr. 8, 2020). Opinion by Lourie, joined by Moore and Chen.
BASF appealed from the district court’s grant of summary judgment that certain claims are invalid as anticipated or obvious. The court ruled that a third-party process evidenced prior art knowledge and use of the patented invention under 35 U.S.C. § 102(a), and that the process also constituted both a public-use bar and an on-sale bar under § 102(b).
On appeal, the Federal Circuit disagreed, holding that the third-party process (the Sanwet Process) did not create an on-sale bar, that the district court misinterpreted § 102(a) and the public-use bar of § 102(b), and that summary judgment is not appropriate under the proper legal standard.
The Federal Circuit first determined that the district court’s interpretation of § 102(a) was erroneous, explaining: “This court has uniformly interpreted the ‘known or used’ prong of § 102(a) to mean ‘knowledge or use which is accessible to the public.’” Prior knowledge or use that is not accessible to the public “upon reasonable inquiry” is insufficient because it “confers no benefit on the public.” Here, the parties disputed the degree to which confidentiality measures had been implemented, creating genuine issues of material fact that preclude summary judgment on the § 102(a) defense.
Next, the Federal Circuit considered whether the public-use bar under § 102(b) can apply to a third party’s secret commercial use. The court noted that application of the bar turns on “whether a use was successfully concealed or hidden and therefore inaccessible to the public.” If the use “was not successfully concealed or hidden from those who lack any limitation or restriction, or injunction of secrecy, then it is a public use within the meaning of § 102(b).” The Federal Circuit determined that genuine issues of material fact existed as to whether all the elements of the Sanwet Process were known and, if not, whether they had been adequately concealed.
Finally, the Federal Circuit addressed the district court’s application of the on-sale bar under § 102(b). BASF argued that an agreement to license the Sanwet Process was not a sale and that a corporate acquisition did not constitute a sale of the Sanwet Process. The Federal Circuit agreed, holding that neither the license agreement nor the acquisition was a sale of the invention within the meaning of § 102(b). “The invention itself must be sold or offered for sale, and the mere existence of a commercial benefit . . . is not enough to trigger the on-sale bar on its own.” Thus, the grant of a license to practice a patented invention does not itself create an on-sale bar. Also, for a “typical” corporate acquisition, as here, “the purchase of a company is not, under the patent law, tantamount to a purchase, or in inverse terms a sale, of every asset held by the acquired company.” The Federal Circuit therefore reversed the district court’s decision under the on-sale bar.
Technical Consumer Products, Inc., et al. v. Lighting Science Group Corp., No. 2019-1361 (Fed. Cir. (PTAB) Apr. 8, 2020). Opinion by Stoll, joined by Dyk and Chen.
The Federal Circuit vacated and remanded the Patent Trial and Appeal Board’s decision of no anticipation or obviousness as to certain claims challenged in an IPR.
In the IPR, the Board found that the “Chou” prior art reference did not disclose or render obvious a particular limitation—the height-to-diameter (H/D) limitation—recited in each of the independent claims at issue. Chou discloses two heat sinks, called “outer flange 22” and “heat sink 14,” and the Board determined that both must be included in the calculation of the H/D limitation’s height-to-diameter ratio.
The Federal Circuit disagreed, ruling that the Board’s conclusions regarding the H/D limitation “resulted from an erroneous interpretation of the claim language and a misunderstanding of our case law.” First, both the plain language of the claims and the patent specification indicate that the H/D limitation should not include heat sink 14. Additionally, “the prosecution history does not support a determination that heat sink 14 must be included in the calculation of the H/D limitation.”
The Federal Circuit next addressed the Board’s finding that separating Chou’s heat sink 14 from outer flange 22 would render Chou inoperable. The Federal Circuit explained that “a prior art reference must be enabling in order to anticipate a claim.” But here, the IPR Petitioner had argued that the relevant heat sink is outer flange 22, and thus anticipation “does not require that heat sink 14 be removed from Chou’s light fixture.” The Federal Circuit determined that the Board misunderstood the applicable law, explaining that “this is a matter of claim construction, not enablement.” The court concluded that, “under a proper reading of claim 1, heat sink 14 need not be physically removed from Chou for Chou to anticipate the claim.” In short, heat sink 14 was deemed “irrelevant to the height-to-diameter ratio, or any of the other claim limitations.”
Valeant Pharmaceuticals International, Inc., et al. v. Mylan Pharmaceuticals Inc., et al., No. 2018-2097 (Fed. Cir. (D.N.J.) Apr. 8, 2020). Opinion by Lourie, joined by Reyna and Hughes.
The Federal Circuit reversed and remanded the district court’s grant of summary judgment that claim 8 in Valeant’s patent for stable methylnaltrexone pharmaceutical preparations is not invalid.
In the district court, Mylan argued that claim 8 would have been obvious in view of three references teaching formulations of either naloxone or naltrexone and in view of two treatises on pharmaceutical formulation. Relying on those references, Mylan argued that a person of skill in the art would have been motivated to prepare and would have arrived at the preparation of claim 8 via routine optimization of pH. The references taught pH ranges that overlapped with the “about 3 to about 4” range in claim 8, but for formulations of naloxone and naltrexone, which Mylan argued were structurally and functionally similar to the claimed methylnaltrexone. Mylan also argued that the pH range in claim 8 would have been obvious to try. The district court disagreed because (1) none of the references taught methylnaltrexone formulations and (2) the pH range was not obvious to try because “the quantity of number ranges falling [in the claimed range] is infinite, not finite.” Mylan appealed.
The sole question on appeal was obviousness. The Federal Circuit agreed with Mylan that the record supports a prima facie case of obviousness. First, the range recited in claim 8 “clearly overlaps with the pH range in the record art”; however, “none of the references disclose the same drug as the one claimed.” Thus, the Federal Circuit addressed “whether prior art ranges for solutions of structurally and functionally similar compounds that overlap with a claimed range can establish a prima facie case of obviousness.” The court concluded that “they can and, in this case, do.” The Federal Circuit cautioned that this holding “should not be misconstrued to mean that molecules with similar structure and similar function can always be expected to exhibit similar properties for formulation.”
Turning to the district court’s obvious-to-try analysis, the Federal Circuit deemed it inconsistent with precedent. “When there is a design need or market pressure to solve a problem and there are a finite number of identified, predictable solutions, a person of ordinary skill has good reason to pursue the known options within his or her technical grasp.” The Federal Circuit explained that, here, there are an infinite potential number of pH ranges within the range of 3 to 4, as the district court found, “only if the realities of pH values (and the limitations of commercially available pH meters) are ignored.” Properly viewed, the possible ranges are finite. Also, the Federal Circuit found it “important to note that pH is in fact the only variable in claim 8, not one of many variables that can be experimented with.”
Keith Manufacturing Co. v. Butterfield, No. 2019-1136 (Fed. Cir. (D. Or.) Apr. 7, 2020). Opinion by Hughes, joined by Taranto and Clevenger.
Butterfield filed a patent application based on inventions made while he was employed at Keith, prompting Keith to file suit against Butterfield asserting various claims. The parties eventually filed a stipulation to dismiss all claims with prejudice. Butterfield then filed a motion for attorney’s fees under Rule 54, but the district court denied the motion, ruling that there was no judgment sufficient for a Rule 54 motion. The district court reasoned that under the Supreme Court’s decision in Microsoft Corp. v. Baker (pertaining to a “final decision” under 28 U.S.C. § 1291), a voluntary dismissal with prejudice is not a “judgment” as required by Rule 54.
On appeal, the Federal Circuit vacated the district court’s decision and remanded. The Federal Circuit acknowledged that “‘judgment’ in the context of Rule 54 is often congruent to a ‘final decision’ under § 1291.” But the Federal Circuit determined that “the district court’s reliance on Microsoft’s § 1291 analysis went too far.” The court deemed Microsoft inapplicable “because judgment in the context of Rule 54 does not raise the same concerns about finality and piecemeal litigation that animated the Supreme Court’s opinion in Microsoft.” First, treating a voluntary stipulation with prejudice as a judgment under Rule 54 would not invite piecemeal litigation since a joint stipulation “means that, except under rare circumstances, there will not be an appeal on the merits; only the attorney’s fee issue remains.” Second, unlike in Microsoft, there is no concern about undermining class action procedure.
Ex parte Grillo-López, Appeal No. 2018-006082 (Jan. 31, 2020) (designated precedential on Apr. 7, 2020). Opinion by Chang, joined by Fredman and Cotta.
The Patent Trial and Appeal Board ruled that an FDA transcript “was made sufficiently accessible to the public so as to render it a printed publication within the meaning of § 102(b).” On that basis, the Board denied a request for rehearing of its decision affirming the Examiner’s rejections of certain claims as obvious.
Appellant had argued that the Board’s decision was contrary to previous decisions of the Board in IPR proceedings finding the same FDA transcript not to be a printed publication. In its denial of the rehearing request, the Board distinguished the previous Board decisions, explaining that the burden for establishing that a reference is a printed publication in IPR proceedings is different than in examination. The Board determined that the framework set forth in Hulu, LLC v. Sound View Innovations, LLC, IPR2018-01039, Paper 29 (PTAB Dec. 20, 2019) (precedential), for IPR proceedings does not apply to examination.
Argentum Pharmaceuticals LLC v. Research Corporation Technologies, Inc., IPR2016-00204 (May 23, 2016) (designated informative as to § II.B on Apr. 7, 2020). Opinion by Bonilla, joined by Prats and Paulraj.
The Patent Trial and Appeal Board found that Petitioner had failed to make a threshold showing that the “LeGall” thesis, cited in two asserted grounds of unpatentability, was sufficiently publicly accessible to qualify as a “printed publication” under § 102(b).
Petitioner asserted that the LeGall thesis constitutes prior art as demonstrated by a “Joint Statement of Uncontested Facts” submitted in a district court case involving Patent Owner and other parties. The Joint Statement recited that, “for purposes of this litigation,” the LeGall thesis “constitutes a ‘printed publication’ within the meaning of 35 U.S.C. § 102(b).” The Board found, however, that the Joint Statement did not provide “a sufficient ‘threshold showing’ of public availability.” The Board noted that the document itself made clear that it was for purposes of that litigation only, that the litigation did not involve Petitioner, and that Patent Owner may have had other reasons to stipulate to certain facts to streamline matters in that case.
The Board also found that Petitioner’s other evidence likewise failed to supply a sufficient threshold showing of public availability. The supplied evidence did not demonstrate “whether the LeGall thesis itself was publicly accessible in the relevant time frame, how one might have obtained a copy of the thesis, or whether the thesis was reasonably accessible through generally available means.” Thus, the Board refused to institute trial “on any ground that relies on the LeGall thesis as ‘printed publication’ prior art.”
Seabery North America Inc. v. Lincoln Global, Inc., IPR2016-00840 (Oct. 6, 2016) (designated informative as to § II.A.i on Apr. 7, 2020). Opinion by Giannetti, joined by Bisk and Kaiser.
The Patent Trial and Appeal Board determined, for purposes of institution of an IPR, that the Petitioner had made a sufficient showing that the “Aiteanu” Ph.D. dissertation qualified as a prior art printed publication.
Patent Owner argued that there is “no evidence” that the Aiteanu dissertation qualifies as a printed publication. However, Aiteanu’s thesis advisor submitted a declaration testifying that, according to the rules at that time, the dissertation had to be deposited in the University of Bremen library, and that he confirmed it was deposited and was available for retrieval by the public. He also testified that the dissertation was indexed in the national library system and that a reprint of the dissertation bears a copyright and publication date, and that “portions and excerpts based on the dissertation were published elsewhere.” The Board therefore determined, “on this record and at this stage,” that Petitioner has demonstrated sufficiently that Aiteanu qualifies as a printed publication.
Sandoz Inc. v. AbbVie Biotechnology Ltd., IPR2018-00156 (June 5, 2018) (designated informative as to § III.C.1 on Apr. 7, 2020). Opinion by Ankenbrand, joined by Mitchell and Hulse.
The Patent Trial and Appeal Board determined that Petitioner had sufficiently demonstrated, for purposes of institution of an IPR, that the “2003 Humira Package Insert” qualified as a printed publication within the meaning of 35 U.S.C. §§102 and 311(b).
The Board explained that the Petitioner “is not required at this stage of the proceeding to establish by a preponderance of the evidence that 2003 Humira Package Insert was publicly accessible before the effective filing date of the [challenged] patent and, therefore, qualifies as a printed publication.” Instead, to meet the initial burden of production, “the Petition must include argument and direct [the Board] to evidence sufficient to show that Petitioner would establish such public accessibility by a preponderance of the evidence during the course of the trial.”
Petitioner argued that the drug packet insert was publicly available on the FDA’s website “no later than March 31, 2003, as demonstrated by the Internet Archive and Wayback Machine service which it provides.” As support, Petitioner provided a screenshot from the Internet Archive along with an affidavit of an Office Manager of the Internet Archive. Petitioner also submitted unrebutted testimony from a medical doctor regarding the accessibility of drug product inserts or labels, such as the Humira Package Insert, on the FDA website.
Patent Owner acknowledged that the evidence submitted from the Internet Archive and Wayback Machine established the existence of the label on an FDA website on the date shown, but argued that the evidence was nevertheless insufficient to establish public accessibility since, among other things, there was no evidence that the FDA website indexed drug information in 2003.
The Board agreed with Patent Owner that “evidence of indexing is probative of public accessibility,” but explained that “such evidence is not necessarily required in all cases.” The Board stated that, where evidence of indexing is absent, testimony as to the availability and accessibility of the reference or the website on which the reference was published can be sufficient to satisfy the threshold showing of public accessibility for purposes of institution. The Board credited the unrebutted testimony of the medical doctor, which was based on his personal experience with accessing labels from the FDA website.
The Board thus found that Petitioner provided “adequate evidence to make a threshold showing that 2003 Humira Package Insert was accessible to the extent required to establish it as a ‘printed publication’ for purposes of institution.”
In-Depth Geophysical, Inc., et al. v. ConocoPhillips Co., IPR2019-00849 (Sept. 6, 2019) (designated informative as to § I.E on Apr. 7, 2020). Opinion by Daniels, joined by Tartal and Moore.
The Patent Trial and Appeal Board determined that Petitioners had not presented sufficient evidence to show a reasonable likelihood that the “Li” reference is a printed publication. Because the grounds of unpatentability asserted by Petitioners all relied on Li, the Board declined to institute IPR.
Petitioners argued that Li is a printed publication because it “was published by September 2012 according to Researchgate.” The Board, however, found that that the Researchgate document did not explain what the “September 2012” date represents, and the Petition provided “no explanation or persuasive corroborating evidence explaining how, or why, the date shown on [the] Researchgate exhibit qualifies Li as a printed publication as a result of its public accessibility to interested persons of ordinary skill in the art.” Also, Patent Owner presented “compelling evidence that Li was potentially first disseminated” at an industry meeting that occurred within the § 102(b) one-year grace period.
Petitioners next argued that Li was cited by a European Patent Office Examiner as a reference in an office action, describing Li as “SEG Technical Program Expanded Abstracts 2012, 1 September 2012 (2012-09-01).” The Board found that this information “provides no explanation as to how and when Li was disseminated and available such that interested and ordinarily skilled persons could locate it exercising reasonable diligence.” The Board found that, “collectively, Petitioner’s evidence amounts to little more than a bare allegation that Li was published in September 2012.” The evidence was insufficient to “evidence that Li was published, disseminated, or otherwise made available to interested persons of ordinary skill in the art, exercising reasonable diligence, prior to the critical date, such that Li qualifies as a prior art, printed publication.”