In Re: Iftikar Khan, Nazin Khan

Docket No. 2017-2207

February 15, 2018


Brief summary: FC panel affirmed the Board decision that the proposed reissue claims were attempting to improperly recapture subject matter surrendered during prosecution of the parent patent.

Summary: Drs. Khan (the Kahns) appealed Board decision affirming the examiner’s rejection of the claims of their reissue application of US 8,282,591 related to “arteriovenous shunts” for use in hemodialysis patients. The limitation in question here is the requirement for a “cylindrical cuff” in the shunt which was added as an amendment during prosecution of the ‘591 patent with the argument “that none of the references disclose” the same. The examiner maintined the rejections and the Khans appealed. The Board reversed the examiner and allowed the claims. The Khans then filed reissue claims 21-41, none of which “expressly recites the ‘cylindrical cuff’ limitation.” The examiner rejected the claims “under § 251 as recapturing subject matter surrendered during prosecution of the ‘591 patent” and obviousness, and the Board affirmed. Section 251 “permits a patentee to seek a broadening reissue of a patent where, ‘through error and without any deceptive intent,’ the patentee originally claimed ‘less than he had a right to claim’” (In re Youman, FC 2012). However, the “recapture rule…bars a patentee from recapturing subject matter, through reissue, that the patentee intentionally surrendered during the original prosecution to overcome the prior art.” Whether “recapture has occurred” is determined by a three-step analysis: 1) “determine whether and in what ‘aspect the reissue claims are broader than the original patent claims”; 2) determine “whether the broader aspects of the reissue claims relate to surrendered subject matter”; and 3) “determine whether the reissue claims were materially narrowed in other respects, so that the claims may not have been enlarged, and hence avoid the recapture rule” (Greenliant, FC 2012). Under the first step of the analysis, the FC panel determined that proposed reissue claims 21, 29, 38 and 39, by not including the “cylindrical cuff” limitation, were broader than those of the ‘591 patent. The presence of the “cylindrical cuff” limitation in dependent claims could not save those claims since “‘the presence of a dependent claim that adds a particular limitation raises a presumption that the limitation in in question is not found in the independent claim’, not that the limitation is found in the independent claim” (Liebel-Flarsheim, FC 2004). The FC panel then determined that the “cylindrical cuff” limitation “relate[s] to surrendered subject matter” in that the Khans amended the claims to include that limitation and “relied on this limitation to distinguish” the claims over the prior art. The FC did not address step three since the Kahns did not not argue that point. The FC panel also found the Kahns waived arguments regarding certain dependent claims because those were not separately argued (“[a] statement which merely points out what a claim recites will not be considered an argument for separate patentability of the claim” (37 CFR § 41.37(c)(1)(iv)). The FC panel therefore affirmed the Board decision without reaching the obviousness issues.

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Aatrix Software, Inc. v. Green Shades Software, Inc.

Docket No. 2017-1452

February 14, 2018

Brief summary: DC Rule 12(b)(6) dismissal finding the claims patent ineligible under § 101 reversed- and remanded-in-part as the DC did not consider Aaatrix’s arguments that its claim included an inventive concept (Alice step two).

Summary: Aatrix appealed DC Rule 12(b)(6) dismissal and finding that the asserted claims of US 7,171,615 and 8,984,393 (having “essentially the same specification) directed to “data processing systems” patent ineligible under § 101. The DC applied the Alice two-step analysis (US, 2014; Mayo, US 2012) for patent eligibility and concluded that “claim 1 is not directed to any tangible embodiment and therefore not directed to eligible subject matter”, and the other claims are “directed to the abstract idea of ‘collecting, organizing, and performing calculations on data to fill out forms: a fundamental activity that can be performed using a pen and paper’” without “supply[ing] an inventive concept”. The FC panel first explained that DC Rule 12(b)(6) decisions are reviewed under the law of the regional circuit (here, the Eleventh Cir…”de novo, accepting as true the complaint’s factual allegations and construing them in the light most favorable to the plaintiff”) and “patent eligibility can be determined at the Rule 12(b)(6) stage” as long as “there are no factual allegations that, taken as true, resolve the eligibility question as a matter of law” (Genetic Techs., FC 2016). Such factual allegations may include, for example, claim construction disputes. In those situations, the DC must either “adopt[] the non-moving party’s constructions…or…resolve the disputes…which may be less than a full, formal claim construction.” The FC panel concluded that the DC erred in granting the motion to dismiss “without claim construction…in the face of factual allegations…that, if accepted as true, establish that the claimed combination contains inventive components and improves the workings of the computer.” The FC panel found that under Alice’s step one, claim 1 “fits within one of the four statutorily provided categories of patent-eligible subject matter” (Ultramercial, FC 2014; Digitech, FC 2014 (both post-Alice)) as “it is a system claim” that “clearly requires a computer operating software, a means for viewing and changing data, and a means for viewing forms and reports” (“very much a tangible system”). And the FC panel concluded the DC “gave no reason for its denial of Aatrix’s motion to amend, and this is not a case where the record contains ‘ample and obvious grounds for denying leave to amend’”. The FC panel explained that it has “held that patentees who adequately allege their claims have inventive concepts survive a § 101 eligibility analysis under Rule 12(b)(6)” and “[h]ere, allowing Aatrix to file the proposed amended complaint, which alleges facts directed to the inventive concepts [Alice, step two] of its claimed invention, would not be futile” (e.g., are “the claim elements or the claimed combination…well-understood, routine, [or] conventional”?; Visual Memory, FC 2017; Amdocs, FC 2016; Enfish, FC 2016; DDR, FC 2014). Thus, the DC dismissal was reversed-in-part, vacated-in-part, and remanded. Judge Reyna’s dissent argued “the majority opinion attempts to shoehorn a significant factual component into the Alice § 101 analysis.”

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MACOM Technology Solutions Holdings, Inc. et al. v. Infineon Technologies AG et al.

Docket No. 2017-1448

January 29, 2018

Brief summary: DC grant of PI based on its finding that Infineon’s termination of an agreement was ineffective and order requiring Infineon to comply with the agreement affirmed, but vacated and remanded as to two sentences thereof.

Summary: Infineon appealed DC grant of preliminary injunction (PI) based on its finding that Infineon’s termination of an agreement was ineffective and ordering Infineon to comply with the agreement. As part of a 2010 sale of MACOM’s (formerly Nitronix) patents to Infineon (formerly Int. Rectifier Corp. (IC)), the parties entered into a separate license agreement (Agreement) licensing the patents back to Nitronex [MACON] in “a ‘Field of Use’ characterized by GaN-on-silicon (“GaN-on-Si’) technology” (shared with Infineon). In 2016, Infineon notified MACOM it believed MACOM had “breached the Agreement by making and selling products using GaN-on-silicon carbide (GaN-on-SiC) technology, which is distinct from GaN-on-Si technology and outside the Agreement”. MACOM responded that any such “sales were minimal and that any breach had been cured”, but Infineon terminated the agreement. MACOM then sued on various contract claims and for a DJ of non-infringement, which the DC granted (“[Infineon’s] purported termination of that agreement…shall have no effect.”) The FC panel explained that it applies regional circuit law during review of DC PI decisions (here, the Ninth Circuit) and therefore reviewed the decision for an abuse of discretion (erroneous legal standard or clearly erroneous findings of fact; requester must show “it is ‘likely to succeed on the merits’” and “suffer irreparable harm”, and that the “balance of equities tips in [its] favor” and “an injunction is in the public interest”). Infineon argued MACOM’s Wrongful Terminationa claim is not likely to succeed because MACOM use “breached the Agreement’s implied convenant of good faith and fair dealing”, but the FC panel agreed with the DC that the grant provision of the Agreement only “conveys a patent license to MACOM, which is ‘in essence nothing more than a promise by the licensor not to sue the licensee” (Spindelfabrik, FC 1987) and “suggests no additional promise by (or obligation of) MACOM not to exceed the Field of Use on which we may “hinge an implied duty’” (Berger, C.D. Cal. 2007 (“implied covenant will not apply where no express term exists on which to hinge an implied duty”)). The FC panel explained that it was not “suggest[ing] MACOM is free to operate outside the Field of Use” since “Infineon’s ownership of the Licensed Patents gives a right to exclude” (35 USC § 154(a)(a); Prism Techs., FC 2017), but noted that it “need not decide those issues today”. Infineon argued the DC’s finding of irreparable harm was erroneous “because there was no ‘causal nexus’ between the Agreement’s termination and Infineon’s (presumably lawful) marketing” (Apple, FC 2015; Apple, FC 2013). But the FC panel found the DC “did not rely only on Infineon’s marketing in finding irreparable harm” but also concluded “MACOM would ‘suffer harm merely by virtue of [its] customers’ perception that [it] no longer hold[s] an exclusive…license…even if [Infineon] is not practicing a patent withint [MACOM’s] exclusive use”, and agreed with the DC’s decision. Infineon also argued the content of the PI was improper and the FC panel agreed regarding part of it as not compliant with Rule 65(d) (e.g., PI “must ‘state the reasons why it issued,’ ‘state its terms specifically,’ and ‘describe in reasonable detail…the act or acts restrained or required’”). The FC panel therefore affirmed the decision but vacated and remanded it as to two sentences of the PI.

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Elbit Systems of America, LLC v. Thales Visionix, Inc.

Docket No. 2017-1355 (IPR2015-01095)

February 6, 2018

Brief summary: Board decision that Elbit was affirmed. And Thales’s request for attorney’s fees was denied (without explanation).

Summary: Elbit appealed PTO Board finding that Elbit failed to demonstrate by a preponderance of the evidence during IPR that the challenged claims of US 6,474,159 related to tracking moving objects (e.g., “virtual environment trainers”) would have been obvious in view of three references (US 4,722,601 (“McFarlane”) and two other references). The FC panel’s FN1 explains that the parties did not designate a claim as representative and “[t]herefore, the Asserted Claims ‘stand or fall’ with claim 3” (In re Affinity Labs, FC 2017). The FC panel also explained that the Board’s factual findings are reviewed for substantial evidence and its legal conclusions de novo (Redline Detection, FC 2015; “evidence as a reasonable mind might accept as adequate” (In re NuVasive, FC 2016); “If two ‘inconsistent conclusions may reasonably be drawn from the record, [the PTAB]’s decision to favor one conclusion over the other is the epitome of a decision that must be sustained upon review for substantial evidence.” In re Cree, FC 2016). And it explained that “obviousness is a question of law based on underlying findings of fact” (In re Gartside, FC 2000) which include the Graham factors (Graham, US 1966), and whether there would have been a motivation to combine the prior art (In re Warsaw, FC 2016). The FC panel agreed with the Board that substantial evidence did not support a finding of obviousness as it found Elbit’s argument that the claims were not properly construed (FN 3 (“neither party proferred a construction of” “relative angular rate signal” and the argument is therefore waived (Conoco, FC 2006)) and that the Board properly found Elbit’s expert’s testimony to be unsupported (Columbia Univ., FC 2015; Inwood Labs., US 1982). The FC panel was also not persuaded by Elbit’s argument “that the PTAB applied the incorrect legal standard because it ‘fail[ed] to credit the knowledge of” one of ordinary skill in the art because “Elbit improperly attempt[ed] to create legal error by selectively quoting from a portion of one of the PTAB’s multiple findings analyzing why it found Elbit’s expert unpersuasive, and ‘[w]e will not find legal error based upon an isolated statement stripped from its context.’” (Waymo, FC 2017; Icon Health, FC 2017 (“attorney argument is not evidence”)). Thus, the Board decision was affirmed. And Thales’s request for attorney’s fees was denied (without explanation).

Posted in Claim Construction, Inter Parties Review (IPR), IPR, Obviousness | Leave a comment

The Medicines Company v. Hospira, Inc.

Docket No. 2014-1469, -1504

February 6, 2018

Brief summary: DC’s decision that distribution agreement was not an offer for sale reversed as the agreement “make[s] clear that [MedCo] and ICS entered into an agreement to sell and purchase the [patented] product”. DC decision of no infringement affirmed since Hopsira “does not perform ‘efficient mixing’”.

Summary: MedCo appealed DC findings of no infringement and Hospira appealed the “finding that a distribution agreement did not constitute an invalidating ‘offer for sale’ under” § 102(b). The dispute relates to Medicine’s Angiomax product and its US 7,582,727 and 7,598,343. This case is on remand from the 2016 FC’s en banc Hospira decision. Regarding infringement, the FC panel here pointed to its 2017 Mylan decision in which an FC panel determined the ‘727 and ‘343 claims require “efficient mixing”, thereby requiring infringing batches to “be compounded using a process that employs the efficient mixing conditions of Example 5” of the ‘727 patent. In this decision, the FC panel found that “Hospira clearly does not infringe the patent method because it does not perform ‘efficient mixing’” but instead “adds the pH-adjusting solution in three portions rather than at a controlled rate” and “uses a single paddle mixer at 560 rpm” while “the claimed method requires using a paddle mixer in conjunction with a homogenizer.” The FC panel therefore affirmed the DC’s decision of no infringement.

In its 2016 en banc Hospira decision (Medicines I), the FC concluded that “a product produced pursuant to the claims of a product-by-process pursuant to the claims of a product-by-process patent is ‘on sale’ under 35 U.S.C. § 102(b)…must be the subject of a commercial sale or offer for sale…that bears the general hallmarks of a sale pursuant to” the UCC (“would be understood to be commercial sales and offers for sale ‘in the commercial community’” while the alleged sales between MedCo and its contractor Ben Venue were only “contract manufacturing services in which title always resided with MedCo”. Here, the DC concluded that a Feb. 27, 2007 (more than one year before the ‘727 and ‘343 July 27, 2008 filing dates) Distribution Agreement between MedCo and Integrated Commercialization Solutions, Inc. (ICS) “was only an agreement for ICS to be the U.S. distributor of Angiomax and was not an offer for sale of Angiomax.” This FC panel disagreed, however, finding the agreement “make[s] clear that [MedCo] and ICS entered into an agreement to sell and purchase the product” since it includes “a statement that The Medicines Company ‘now desire[d] to sell the Product’ to ICS and ISC ‘desire[d] to purchase and distribute the Product”, “the purchase schedule”, “and the passage of title from [MedCo] to ICS”. MedCo unsuccessfully argued the agreement is not an offer for sale because it permits MedCo “to reject all purchase orders submitted by ICS” (e.g., Group One (FC 2001) and Linear Tech. (FC 2001) “are not analogous to this case” since “[i]n both cases, the patent owner marketed the product but never reached any sale agreement” (there was no sale) and MedCo was “required…to use ‘commercially reasonable efforts’ to fill the purchase orders” (UCC § 2-306(2))). The FC panel analogized this case to Helsinn (FC 2017) in which the agreement “obligated Helsinn to meet the purchase orders” “[e]ven though the orders were subject to written acceptance and confirmation” and Enzo (FC 2005) in which “a contractual provision concerning the supply ‘of worldwide requirements at reasonable times and prices…constitutes an offer to sell that has been accepted” without “dictat[ing] the amount of product to be sold” (as here which included, e.g., “the purchase price, a weekly purchase schedule, and a requirement that [MedCo] fill ICS’s orders unless commercially unfeasible” (also referring to Medicines I in which “Ben Venue sold contract manufacturing services-not the patented invention”; In re Caveney, FC 1985 (“the on-sale bar does not exempt commercial agreements between a patentee and its supplier or distributor”)). While the FC panel also agreed with the DC’s conclusion that “the invention was ready for patenting before the critical date”, it reversed the DC’s decision that the distribution agreement was not an offer for sale.

Posted in Claim Construction, Infringement, On-Sale Bar | Leave a comment

Actelion Pharmaceuticals, Ltd. v. Joseph Matal (USPTO)

Docket No. 2017-1238

February 6, 2018

Brief summary: DC grant of SJ to the PTO that it correctly calculated the § 1.54 patent term adjustment “A delay” since Actelion did not expressly request to begin national examination procedures by checking the box on PTO Form 1390, and “national commencement cannot occur on a federal holiday” but instead “commence[s] on the next workday”.

Summary: Actelion appealed DC grant of SJ regarding the length of the patent term adjustment (“PTA” under § 1.54 “to account for any undue delays in patent examination caused by the PTO”) for US 8,658,675, “which was filed as a national stage application pursuant to 35 U.S.C. § 371” (Daiichi Sankyo, FC 2015). The dispute is with respect to the “A Delay calculation” (§ 154(b)(1)(A) (“Guarantee of Prompt Patent and Trademark Office Responses”)). Under Congress’ 2013 “Techincal Corrections Act” (TCA) making “certain technical corrections” amended section 154(b)(1)(A) to require the PTO “provide at least one of the notifications under section 132 or a notice of allowance…not later than 14 months after…the date of commencement of the national stage under section 371”. Prior to the TCA, 154(b)(1)(A) referred to “the date on which an international application fulfilled the requires of section 371”. The TCA also provided that “the amendments made by this Act shall take effect on the date of enactment of this Act, and shall apply to proceedings commenced on or after such date of enactment.” The FC panel explained that “[t]he commencement of the national stage” of a PCT application “is specified in 35 U.S.C. § 371” “subject to subsection (f)” which provides that “the national stage of processing may be commenced at any time at which the application is in order for such purpose and the applicable requirements of subsection (c) of this section have been complied with” “[a]t the express request of the applicant” (unchanged by the TCA). When the application leading to the ‘675 patent (the ‘619 application) was filed, Actelion submitted the “completed PTO Form 1390, which provides checkboxes for the applicant to indicate various information concerning the national stage application” without “check[ing] the…box 3…next to the statement reading: ‘This is an express request to begin national examination procedures (35 U.S.C. [§] 371(f)….’” The PTO initially indicated a 41-day PTA, and Actelion requested recalculation. The PTO then reduced the PTA by 40 days. Actelion then filed a petition for reconsideration arguing it was entitled to 45 days as the A delay of the PTA “should have been calculated basedon the ‘619 application’s filing date, January 12, 2012, or at least based on the 30-month date, January 16, 2012”. The petition was denied. “[T]he PTO did not issue a decision on Actellion’s second petition “in view of the pendency of this suit.” The DC granted SJ to the PTO, agreeing with it that “under either pre- or post-TCA law, the PTA for the ‘675 patent should be the same because the conditions under 35 U.S.C. § 371(b) and (f) were not met on the day the ‘619 application was filed” and “the national stage did not commence on the 30-month date that fell on a federal holiday.” The FC panel agreed with the PTO that “the A Delay calculation must be based on the date on which the entirety of § 371 is complied with, including § 371(b) and (f)”. The FC panel also found “Actelion was required to comply with the ‘express request’ provision of § 371(f) if it wished to commence the national stage before the” 30-month national stage deadline and did not, even with its remark in its preliminary amendment that “it ‘earnestly solicits early examination and allowance of these claims.” The FC panel further concluded the PTO corrected calculated the A delay (i.e., not the ‘619 application’s filing date as there was no express request and “national commencement cannot occur on a federal holiday” but instead “commenced on January 17, 2012, the next workday”). The DC decision was therefore affirmed.

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AbbVie, Inc. et al. v. Medimmune Limited

Docket No. 2017-1689

February 5, 2018

Brief summary: DC dismissal of AbbVie’s DJ action affirmed since its requested “declaration would not actually resolve the parties’ contractual dispute” (Medimmune, US 2007).

Summary: AbbVie appealed DC grant of Medimmune’s motion to dismiss for lack of jurisdiction regarding a development and licensing agreement between the parties (governed by British law) relating to AbbVie’s US 6,248,516 and Humira® (adilumumab). Under the agreement, AbbVie is licensed “to practice the ‘516 patent among others, although the parties agree AbbVie does not presently practice it” and “to pay royalties on the sales of certain antibodies ‘until the last to expire of [certain] Patents or the expiry of fifteen years from the date of First Commercial Sale of a Product by [AbbVie’s predecessor]…(whichever is later)’.” The ‘516 patent is the last to expire patent (June 19, 2018) and the first commercial sale occurred in January 2003 (royalties therefore cease in January 2018 or June 2018. AbbVie brought a DJ action seeking invalidation of the ‘516 patent “to hasten the end of its royalty obligations” but it “did not seek a declaration as to the contract’s interpretation.” Medimmune argued the DC lacked DJ jurisdiction or “should decline to exercise it” and “contend[ed] that the royalty obligations are pegged to the patent’s expiration date without regard to the patent’s validity”. The DC dismissed the complaint because “AbbVie does not practice the ‘516 patent and therefore is not at risk of an infringement suit” and “the interpretation of the 1995 agreement was governed by British contract law and would implicate the rights of the British government, which jointly owns the patent through one of its research councils” (AbbVie argued Medimmune “possesses all substantial rights in the ‘516 patent”). The FC panel disagreed with the DC’s first reason because “AbbVie’s claim…never rested on the possibility of infringement, but rather the parties’ contractual obligations” that “turn on the expiration and, perhaps, the validity of the ‘516 patent” but not “on whether AbbVie engaged in infringement.” But the FC panel also explained that DJ “jurisdiction extends to contractual disputes that turn on issues of patent infringement and invalidity” (Medimmune, US 2007 (“All we need determine is whether petitioner has alleged a contractual dispute.”); Powertech Tech., FC 2011 (“whether the license agreement require[d] royalty payments to be tied to valid patent coverage [was] sufficient to support [DJ] jurisdiction”)). The FC panel concluded, however, that “AbbVie’s problem is that it did not seek a declaration of its contractual obligations” and “only…a declaration of invalidity”. Medimmune argued “such a declaration would not actually resolve the parties’ contractual dispute” (Medimmune, US 2007 (“a litigant may not use a [DJ] action to obtain piecemeal adjudication of defenses that would not finally and conclusively resolve the underlying controversy”)). And, here, “[i]t is an open question whether British courts would consider the invalidation of the patent to be tantamount to its expiration for purposes of this agreement” and “[w]ithout a resolution to this question, the parties’ contractual dispute would persist” (acknowledging exceptions to this in, e.g., Dey (FC 2012), but only because the patentee did not sue on all the patents to a pharmaceutical drug). The DC decision was therefore affirmed (without reaching the joint ownership issue).

Posted in Appeal, Article III disputes, Jurisdiction | Leave a comment