Sandoz Inc. v. Amgen Inc. et al.


SCOTUS No. 15-1039 (decided with 15-1195, Amgen Inc. et al. v. Sandoz Inc.)

June 12, 2017

Brief Summary: FC issuance of “a federal injunction prohibiting Sandoz from marketing Zarxio until 180 days after licensure” reversed since “the applicant may provide [180 day] notice either before or after receiving FDA approval” (§262(l)(8)(A) provides “a single timing requirement (180 days before marketing) rather than the two requirements posited by the Federal Circuit (after licensing, and 180 days before marketing)”)

Summary: Under the abbreviated pathway for biosimilar approval provided by the Biologics Price Competition and Innovation Act of 2009 (BPCIA), the “submission of a biosimilar application [is] an ‘artificial’ act of infringement, enabling parties to bring patent infringement suits” (§§271(e)(2)(C)(i), (ii)). Under §262(l)(2)(A), the biosimilar applicant “must provide its application and manufacturing information to the sponsor within 20 days of the date the FDA notifies the applicant that it has accepted the application for review.” Then, under §262(l)(3) and §262(l)(8)(A), the parties create lists of relevant patents and “identify patents on the lists for immediate litigation” (the “first phase”). A “second phase” involving “any listed patents not litigated in the first phase” is “triggered when the applicant…gives the sponsor notive at least 180 days before commercially marketing the biosimilar”. The opinion notes that “[t]he applicant has substantial control over the timing and scope of both phases of litigation.” If the applicant does not provide its application and manufacturing information to the sponsor (§262(l)(2)(A)), “then the sponsor, but not the applicant, may immediately bring an action”. Under §262(l)(9)(B), “if an applicant provides the application and manufacturing information but fails to complete a subsequent step in the process, the sponsor, but not the applicant, may bring a declaratory-judgment action with respect to any patent included on the sponsor’s list of relevant patents.” Here, Sandoz sought approval of a biosimilar (Zarxio) for Amgen’s Neupogen. After notifying Amgen of the FDA’s acceptance of its application and its intent to market the product upon FDA approval, “[i]t later notified Amgen that it did not intend to provide the application and manufacturing information…and that Amgen could sue immediately”, which Amgen did (under CA’s unfair competition laws and violations of the BPCIA, Sandoz counterclaimed for invalidity and non-infringement). The CA claim was dismissed and then affirmed by the FC since “the BPCIA provides the exclusive remedies for failure to comply” (§282(l)(2)(A)). SCOTUS agreed, holding the (§282(l)(2)(A) is not enforceable by injunction under federal law” but noted the FC “should determine whether a state-law injunction is available” on remand. SCOTUS found the FC’s “reasoning” on this point, based on §271(e)(4), “was flawed”, that “failing to disclose the application and manufacturing information required by §262(l)(2)(A)” is not an act of infringement, and that the availability of a remedy under §262(l)(9)(C) “indicates that Congress did not intent sponsors to have access to injunctive relief, at least a matter of federal law, to enforce the disclosure requirement.” The FC also enjoined Sandoz from marketing its product “until 180 days after it provided its second notice” (§262(l)(8)(A)). SCOTUS held that under (§262(l)(8)(A), “‘commercial marketing’ is the point in time by which the biosimilar must be ‘licensed’” and “the applicant may provide notice either before or after receiving FDA approval” (i.e., “it may also provide notice before licensure”, “a single timing requirement (180 days before marketing) rather than the two requirements posited by the Federal Circuit (after licensing, and 180 days before marketing)”). Thus, since “Sandoz fully complied with (§262(l)(8)(A) when it first gave notice (before licensure)”, the FC “erred in issuing a federal injunction prohibiting Sandoz from marketing Zarxio until 180 days after licensure” and “Amgen’s reques for state-law relief is predicated on its argument that the BPCIA forbids prelicensure notices, its claim under [CA’s] unfair competition law also fails”, this part of the FC’s decision was reversed.

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Crossroads Systems, Inc. v. Cisco Systems, Inc. et al.


Docket No. 2016-2017, -2026, -2027

IPR2014-01226, -01463, -01544; IPR2015-00825, -00852, -00854
REYNA, LINN, CHEN
June 6, 2017

Non-precedential

Brief Summary: Board’s conclusion of invalidity for obviousness based on its claim construction found to be supported by substantial evidence and affirmed.

Summary: Crossroads appealed PTAB decision finding US 6,425,035; 7,934,041; and 7,051,147 directed to a system for providing network-based computer storage unpatentable for obviousness in view of the “CRD 550 User’s Manual” and secondary references (HP Journal, Fibre Channel Standard, and QLogic Data Sheet). The FC panel explained that obviousness is a question of law based on factual inquiries relating to the scope and content of the prior art, differences between the prior art and the claims at issue, the level of ordinary skill in the pertinent art, and any objective indicia of nonobviousness (Ivera Med. Corp., FC 2015). The FC panel also explained the PTAB’s ultimate determination of obviousness is a legal question reviewed de novo (In re Mouttet, FC 2012) and that the factual findings are reviewed for substantial evidence (In re Gleave, FC 2009; In re Gartside, FC 2000 (“Substantial evidence is ‘such relevant evidence as a reasonable mind might accept as adequate to support a conclusion.’”)) Under the broadest reasonable construction (BRC (Cuozzo, US 2016)), the Board construed the term “map” (“maps between devices”) in the independent claims which Crossroads argued was erroneous but the FC panel did not find error with the construction. Given that the construction was found to be correct, the Board’s obviousness conclusion regarding the independent claims was affirmed. Crossroads also argued limitations (“unique identifier”, “world wide name”, “host device ID”) of dependent claims 14 and 24 were not disclosed by the prior art references but the FC panel disagreed since, as construed by the PTAB and described by the specification (“[e]ven Crossroads’ own patent specification uses identifiers in its map which uniquely identify a device”), the limitations are found in the reference. The FC panel also noted, and did not disagree, “that Crossroads’ arguments attacked the CRD-550 manual individually, without reference to [the] combination”. It therefore found the Board’s conclusion to be supported by substantial evidence and affirmed the decision.

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J Kyle Bass et al. (Petitioner) v. Fresenius Kabi USA, LLC (Patent Owner)

IPR2016-00254
U.S. Pat. No. 8,476,010B2
Final Written Decision (June 5, 2017)

Brief Summary: Board found challenged claims of US 8,476,010B2 relating to formulations of the anesthetic propofol (2,6-diisopropylphenol) stored in containers having nonreactive, inert closures (sold as Diprivan) invalid for obviousness.

Summary: Bass et al. (Petitioner) requested IPR of claims 1, 13-15, 17, 18 and 20 of Fresenius’s US 8,476,010B2 relating to formulations of the anesthetic propofol (2,6-diisopropylphenol) stored in containers having nonreactive, inert closures (sold as Diprivan) on obviousness grounds (see also IPR2015-00715). The FWD explains that “[p]ropofol compositions have been the subject of several patents” (e.g., US 5,714,520 (“a sterile, pyrogen-free emulsion containing 1% (w/v) propofol in 10% (w/v) soybean oil”)). Petitioner cited the Diprivan IPR, “Farinotti” (storage of Diprivan for three years in a glass vial using a bromobutyl stopper) and “van den Heuvel” (bromobutyl rubber does not cause unacceptable deterioration in quality) or “Lundgren” (bromobutyl rubber improves stability of thrombin) as the basis for its obviousness arguments. The Board accepted the Fresenius’s definition of one of ordinary skill in the art as one having at least a master’s degree in a related technical field or equivalent experience but also “experience with propofol and drug product emulsions, emulsion systems and their packaging”, and accepted both parties’ expert declarants. Under the broadest reasonable construction (BRC (Cuozzo, US 2016; In re Translogic, FC 2007; In re Paulson, FC 1994; Wellman, FC 2011), the Board construed “from about 0 to about 10% by weight solvent for propofol” as “from approximately zero to approximately 10% solvent by weight, a range that includes 10%”; “siliconized” as “surface-treated, coated, or manufactured with silicone or one or more siloxane polymers”; and “inert to propofol” as “having no significant reactivity to propofol”. The claims also include a “stability limitation”. The FWD explained that “a patent composed of several elements is not proved obvious merely by demonstrating that each of its elements was, independently, known in the prior art” and “it can be important to identify a reason that would have prompted a person of ordinary skill in the relevant field to combine elements in the way the claimed new inventions does” with “a reasonable expectation of success” (KSR, US 2007; PAR Pharm., FC 2014; In re Gurely, FC 1994 (teaching away suggests path “unlikely to be productive”)). The Board found the stability limitation to be “an inherent property of Diprivan” and statements in the ‘010 specification. And it found the argumetns and evidence provided “a reason to use a siliconized bromobutyl rubber stopper with the claimed propofol formulation” (e.g., van den Heuvel teaches that type of stopper “imparts a stable solution of diazepam”, skilled artisan “would have recognized the advantages” (suggestion “does not have to be found explicitly in the prior art” (In re Kahn, FC 2006), this is not a case “where the art did not appreciate or suggest the existence of a problem” (Novartis Pharms., D. Del. 2004; Leo Pharms., FC 2013; Unwired Planet, FC 2016), KSR (“any need or problem…can provide a reason for combining”)). The Board also disagreed there was a teaching away in other art cited by Fresenius (e.g., “not persuaded that the data are comparable”, “even if” the art “encouraged the use of other stoppers…we are not persuaded that this rises to the level of criticizing, discrediting, or discouraging” (Mieresonne, FC 2017)). The Board also concluded Bass “has a better position” regarding whether it would have been obvious to try using a siliconized rubber stopper since this was “repeatedly identified as a solution” to the known problem of “rubber stoppers sticking to the metallic machinery on automatic filling lines” (KSR (where “finite number of identified, predictable solutions, a person of ordinary skill has good reason to pursue the known options…the product not of innovation but of ordinary skill and common sense”)). It concluded Bass had shown by a preponderance of the evidence that all of the challenged claims are unpatentable as obvious.

Posted in Inter Parties Review (IPR), IPR, Obviousness, Obviousness-Teaching Away | Leave a comment

Checkpoint Systems, Inc. v. All-Tag Security, S.A. et al.


Docket No. 2016-1397

NEWMAN, LOURIE, MOORE
June 5, 2017

Brief Summary: DC grant of attorney fees under § 285 because, e.g., “[e]nforcement of” Checkpoint’s right to “protect its own competitive advantage” “is not an ‘exceptional case’ under the patent law”.

Summary: Checkpoint appealed award of attorney fees to All-Tag under § 285 after the DC found US 4,876,555 regarding “anti-theft tags that are attached to merchandise, and deactivated when the goods are purchased.” In a first appeal, the FC panel reversed the award of attorney fees since “[t]he infringement charge was not shown to have been made in bad faith or objectively baseless” (Checkpoint, FC 2013). All-Tag was granted certiorari (Kobe, US 2014) and the decision remanded in view of Octane Fitness (US 2014) and Highmark (US 2014). The FC then remanded the case to the DC which “again held the case to be exceptional” because, e.g., “Checkpoint’s pre-suit investigation” was “inadequate because the infringement opinions ‘were given years before filing’” and it showed “the improper motive of ‘protect[ing] its own competitive advantage.’” The FC panel explained that an “exceptional case” is “one that stands out from the others with respect to the substantive strength of a party’s litigating position…or the unreasonable manner in which the case was litigated” under a “preponderance of the evidence” (Octane Fitness, US 2014). It also explained that while “‘motivation’ to harass or burden an opponent may be relevant to an ‘exceptional case’ finding” (SFA Sys., FC 2015), “[e]nforcement of” Checkpoint’s right to “protect its own competitive advantage” “is not an ‘exceptional case’ under the patent law” (“[M]otivation to implement the statutory patent right by bringing suit based on a reasonable belief in infringement is not an improper motive. A patentee’s assertion of reasonable claims of infringement is the mechanism whereby patent systems provide an innovation incentive.”) The DC “also found the expert’s failure to test an accused product supported the exceptional case finding and fee award” and “Checkpoint’s expert’s reliance on two of All-Tags manufacturing process patents…as evidence of infringement ‘insufficient’”. However, the FC found “[t]here was no representation by All-Tag that the accused products were different from the tested products, and the [DC] did not so find”, “[t]here was no allegation of falsity or fraud or bad faith on the part of Checkpoint or its expert”, and “All-Tag witness…agree[d] with counsel that to understand” All-Tag’s process, “it was ‘enough to just read the patent’”, all of which it found not to “support the ‘exceptional case’ ruling against Checkpoint.” The FC panel noted that “[t]he Court has cautioned that fee awards are not to be used ‘as a penalty for failure to win a patent infringement suit’” (Octane, US 2014), “[t]he legislative purpose behind § 285” being “to prevent a party from suffering a ‘gross injustice’”. It concluded the DC “erred, and thus abused its discretion” and reversed the award of attorney fees under § 285.

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Rothschild Connected Devices Innovations, LLC v. Guardian Protection Services, Inc. et al. (“ADS Security, L.P.”)


Docket No. 2016-2521

PROST, MAYER, WALLACH
June 5, 2017

Brief Summary: DC denial of request for attorney’s fees under § 285 reversed and remanded (due, e.g., to “Rothschild’s willful ignorance of the prior art”).

Summary: ADS appealed DC denial of its request for attorney’s fees under 35 USC § 285 (2012). The dispute centers on Rothschild’s allegation that ADS’s home security system infringed claim 1 of US Pat. No. 8,788,090. After receiving a letter from Rothschild, ADS offered to settle “if Rothschild paid ADS $43,330 for attorney fees and costs”, which Rothschild rejected. ADS then filed a motion for judgment on the pleadings, arguing that the claim was directed to patent-ineligible subject matter under § 101 and sent Rothschild a Safe Harbor Notice (FRCP 11(c)(2)). Rothschild then voluntarily moved to dismiss its action which ADS opposed and requested attorney’s fees under § 285. ADS argued “Rothschild’s suit was objectively unreasonable because Rothschild knew or should have known claim 1 covers patent-ineligible subject matter under § 101 and is anticipated by prior art under § 102(a)(1)” and was only filed to “‘extract nuisance value settlements’ from various defendants.” The DC granted Rothschild’s motion to dismiss and denied ADS’s motion since Rothschild voluntarily dismissed its action and presented “non-conclusory and facially plausible arguments” regarding § 101, and “ADS neither filed a motion seeking to invalidate claim 1…under § 102(a)(1) nor demonstrated Rothschild failed to conduct a reasonable pre-suit investigation of the prior art.” The FC panel explained that an “exceptional case” is “one that stands out from the others with respect to the substantive strength of a party’s litigating position…or the unreasonable manner in which the case was litigated” under a “preponderance of the evidence” (Octane Fitness, US 2014). And DC decisions are reviewed “for an abuse of discretion” which is found where the DC “base[s] its ruling on an erroneous view of the law or on a clearly erroneous assessment of the evidence” (Lumen View, FC 2016; SFA Sys., FC 2015; Highmark, US 2014). It found the DC “clearly erred by failing to consider Rothschild’s willful ignorance of the prior art” included in ADS’s Safe Harbor Notice (Rothschild’s “conclusory and unsupported statements…have no evidentiary value.” Phigenix, FC 2017). The FC panel also agreed with ADS’s arguments that Rothschild engaged in “vexatious litigation” (“fifty-eight cases against technologies ranging from video cameras to coffeemakers to heat pumps”) (SFA, FC 2015 (“repeated filing of…actions for the sole purpose of forcing settlements, with no intention of testing the merits of one’s claims”)). It also found the DC “failed to account for the totality of the circumstances by equating Rule 11 to § 285” since “conduct under Rule 11(b) ‘is not the appropriate benchmark’”. Thus, the DC decision was reversed and remanded. Judge Mayer’s concurring opinion noted that “the underlying functional concern” of § 101 “is a relative one: how much future innovation is foreclosed relative to the contribution of the inventor” (Mayo, US 2012 and Motion Picture Patents, US 1917) and stated that “[t]his suit never should have been filed” (Highway Equip., FC 2006; Octocom, FC 1990).

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In re: NuVasive, Inc.


Docket No. 2015-1841 (IPR2014-00075)

DYK, O’MALLEY, TARANTO
May 31, 2017

Non-precedential

Brief Summary: IPR Final Written Decision reversed as based on erroneous claim construction (e.g., expert testimony relied upon was “not about ‘lateral’ in the setting addressed in the ‘767 patent”).

Summary: Medtronic requested IPR of NuVasive’s US 8,016,767 regarding “methods for inserting a spinal fusion implant along a lateral, transpsoas path the spine using nerve monitoring to avoid damaging senstitive motor neurons (particularly those in the nerve-rich portions of the psoas muscle)” (e.g., “approaching from the side of the patient”) after the patent was asserted against it (docket 3:12-cv-02738-CAB-MDD (S.D. Cal.)). The PTAB held all the reviewed claims unpatentable as obvious (April 5, 2015 Final Written Decision). In this appeal, NuVasive challenged the “Board’s construction of the claim phrase ‘lateral, transpsoas path,’ focusing its challenge on the term ‘lateral’ in that phrase”, its finding of a motivation to combine the prior art, and “its treatment of objective-indicia evidence”. In the claimed methods, “[a]ll [the surgical] instruments are inserted ‘along a lateral, trans-psoas path’, a limitation that is recited eight times in” representative claim 1. The FC opinion explains that “NuVasive did not address the construction of ‘lateral, trans-psoas path’ in its patent owner’s response…[b]ut it argued that Obenchain ‘962 did not disclose” that limitation “but instead was limited…to an ‘anterior or anterolateral’ approach that traversed only the psoas muscle’s ‘most anterior fibers,’ which do not contain the sensitive nerves that NuVasive’s patent was designed to avoid” and evidence “that was was a long-filed need for a safe and reproducible…approach” as claimed (“met with skepticism but later…praised”). The FC panel explained that “the Board’s analysis” of “lateral” “was limited” (under the broadest reasonable construction, relying in part of expert testimony), and that the Board found that “the challenged claims were not limited to traversing the dangerous, nerve-rich part of the psoas”, that Obenchain ‘962 taught that approach, and “gave little weight to NuVasive’s evidence of long felt need, commercial success, etc. because NuVasive has ‘not show[n] a sufficient nexus’”. The FC panel explained that “[e]ven under the [BRC], the Board’s construction cannot be divorced from the specification and the record evidence and must be consistent with the one that those skilled in the art would reach” and cannot be “unreasonably broad” (Microsoft, FC 2015) and fact-related expert testimony is reviewed “for reasonableness under the substantial evidence standard” (Teva, US 2015). The FC panel found “[t]he Board was unreasonable in relying on the expert testimony about the meaning of the word ‘lateral’ in the context of his own, prior-art patent” as his testimony was “not about ‘lateral’ in the setting addressed in the ‘767 patent” (“runs counter to the specification of the ‘767 patent, which, though it does not define the term ‘lateral,’ does provide meaningful guidance” (“[a] proper construction must be consistent with the specification”), “more restrictive than the Board’s interpretation” (PPC Broadband, FC 2016)) and “departs from the construction Medtronic accepted for purposes of its patentability challenges”. “By claiming a ‘lateral, trans-psoas approach’…NuVasive must be taken to have limited its claim beyond what ‘trans-psoas approach’ would cover” (Merck, FC 2005 (“A claim construction that gives meaning to all the terms of the claim is preferred over one that does not do so.”)) As the FC panel found error with the claim construction and vacated and remaned the Board’s decision on that basis, the motivation to combine and secondary consideration issues were not addressed.

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Intellectual Ventures II LLC v. Motorola Mobility LLC


Docket No. 2016-1361 (IPR2014-00504)

DYK, PLAGER, REYNA
May 31, 2017

Non-precedential

Brief Summary: Board’s decision of no prior conception vacated and remanded because it did not follow “[t]he rule of reason” which “require[s] consideration of all pertinent evidence” (e.g., “[d]ocuments created shorter after the critical date and even undated documents may be relevant to corroborate an inventor’s testimony”).

Summary: IV II appealed IPR final written decision that the challenged claims of US 7,382,771 (“MSH1”) “and reduced it to practice prior to the critical date of the allegedly anticipating prior art.” The FC panel concluded “the Board erred by requiring as part of the LAN limitation that IV corroborate conception of authentication and control features”, claim construction it had previously rejected (In re NTP, FC 2011 (“We agree it would be improper to apply one claim construction to evidence of date of invention and a different one in assessing the prior art references.”)) The FC panel also found “a credibility issue arose bearing on whether the Windows 98 version used by the inventors in fact had the capability to provide the LAN limitation”. This point was acknowledged not be “direct evidence corroborating the conception of the invention because Windows 98 was not part of the claimed invention” and only “played a minor role.” But the FC panel found “the Board was too dismissive and erred in refusing to consider this evidence.” It explained that “[a]lthough conception must include every feature or limitation of claimed invention” (REG Synthetic, FC 2016), it does not need to “constitute[] definitive proof of [the inventor’s] account or disclose[] each claim limitation as written” and “[t]he focus must be whether the totality of the evidence makes the inventor’s testimony credible” (Fleming, FC 2014; Lazare Kaplan, FC 2010 (“the court has not impose[d] an impossible standard of ‘independence’ on corroborative evidence by requiring that every point…be corroborated by evidence having a source totally independent of the [witness]”)). The FC panel found the Board erred in “refusing to consider” an exhibit because it “did not corroborate timely conception” as it was dated “one month after the critical date” and an inventor’s testimony. The opinion explained that “[d]ocuments created shorter after the critical date and even undated documents may be relevant to corroborate an inventor’s testimony” (Lazare, FC 2010; Ohio Willow, FC 2013) and “[c]orroboration does not require that every detail of the testimony be independently and conclusively supported by explicit disclosures in the pre-critical date documents or physical exhibits” (Ohio Willow; Linear Tech., FC 2004). And “[t]he rule of reason requires consideration of all pertinent evidence” (TransWeb, FC 2016). The Board’s decision was therefore vacated and remanded.

Posted in Conception and Reduction to Practice, Inter Parties Review (IPR), IPR | Leave a comment