Board decision that reissue claims improperly recapture surrendered subject matter affirmed

In Re: General Electric Company (“GE”)

Docket No. 2019-1112, -1113, -1115
October 18, 2019

Brief Summary: Board decision that reissue claims improperly attempted to recapture surrendered subject matter affirmed (e.g., the attachment limitation was added during prosecution “in response to the examiner’s rejections”, and the reissue claims “eliminate the attachment-related limitations entirely”).

Summary: GE appealed three PTAB decisions regarding resissue applications (§ 251) of US 7,990,705 directed to “a synthetic jet assembly”, each decision rejecting “the reissue claims as an attempt to recapture subject matter intentionally surrendered during prosecution of the ‘705 patent.” The PTAB “found (1) that the reissue claims were broader than the issued claims because the reissue claims can read on a jet assembly unattached to a sidewall whereas the ‘705 patent’s claims cannot; (2) that the broadened aspect of the reissue claims relates to surrendered subject matter, i.e., an unattached jet assembly; and (3) that the surrendered subject matter had crept into the reissue claims because the attachment-related limitations added during prosecution were entirely absent from the proposed reissue claims”, and denied GE’s request for rehearing. The FC panel explained that “[a]n inventor may not…recapture through reissue subject matter that was surrendered to obtain allowance of the issue claims” which is decided by determining: 1) “whether and in what aspect the reissue claims are broader than the patent claims”; 2) “whether the broader aspects of the reissue claims related to the surrendered subject matter”; and, 3) “whether the surrendered subject matter has crept into the reissue claim” (In re Mostafazadeh; In re Youman; In re Clement), and that “[v]iolation of the rule against recapture may be avoided…if the reissue claims ‘materially narrow’ the [original] claims…such that full or substantial recapture of the subject matter surrendered during prosecution is avoided” (In re Mostafazadeh; N. Am. Container, FC 2005 (“The narrowing must, therefore, relate to the surrendered subject matter.”)) In addition, this opinion explains that this rule “does not apply to reissue claims directed to ‘overlooked aspects’ such as ‘additional inventions / embodiments / species not originally claimed’” (“not merely incidental features” but “distinct elements which ‘were never claimed and thus never surrendered’” (In re Mostafazadeh, In re Youman)). The FC panel agreed with the PTAB because the attachment limitation was added during prosecution “in response to the examiner’s rejections”, and the reissue claims “eliminate the attachment-related limitations entirely” which “expands the scope of the claims to cover unattached jet assemblies which were surrendered during prosecution.” It also concluded that “[a]ny narrowing accomplished” by the “additional narrowing limitations” are “unrelated to the surrendered subject matter and therefore insufficient to avoid recapture” (In re Mostafazadeh) and “within the scope of at least one original claim of the ‘705 patent and therefore, cannot be said to be an ‘overlooked aspect’” (the “subcombination is not an overlooked aspect of the invention”). Thus, the Board decision was affirmed.

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DC motion to dismiss remanded due to ambiguity regarding sublicense survival after bankruptcy

Fraunhofer-Gesellschaft v. Sirius XM Radio Inc.

Docket No. 2018-2400
October 17, 2019

Brief Summary: DC grant of motion to dismiss reversed and remanded for reconsideration of evidence relating to survival of a sublicense after bankruptcy.

Summary: Fraunhofer sued Sirius (SXM) for infringement of four of Fraunhofer’s patents and the DC dismissed the complaint after finding SXM had a valid license to those patents. That license came from an sublicensable exclusive license (“Master Agreement”) with WorldSpace International Network Inc. (“WorldSpace”) to Fraunhofer’s technology (“MCM IP rights”). WorldSpace sublicensed the MCM IP rights to SXM, and that license was amended to be “irrevocable” in 1999. WorldSpace filed for Chapter 11 bankruptcy in 2008, which was converted to Chapter 7 in 2012. “At the bankruptcy court, WorldSpace rejected the Master Agreement pursuant to section 365(d)(1) of the Bankruptcy Code”, but it was unclear from the DC’s decision whether it had also been rejected in an earlier agreement approved by the bankruptcy court (see FN2). The FC opinion explains that under Mission Products (US 2019), “WorldSpace’s rejection was equivalent to a breach occurring ‘immediately before the date of filing of the [bankruptcy] petition”, which “gave Fraunhofer the right to terminate the Master Agreement” which it did not do. The bankruptcy court approved a 2009 “Settlement Agreement” between WorldSpace and SXM under which SXM paid WorldSpace about $300,000 and “emphasized that the sublicense would remain in effect”, and “SXM continued to utilize the MCM technology.” In 2015, Fraunhofer accused SXM for infringement of the four patents which the FC opinion explains “were covered in the Master Agreement and Sublicense Agreement.” Also in 2015, Fraunhofer wrote WorldSpace a “Termination Letter” “claiming that the Master Agreement ‘was terminated in the context of the rejection [in bankruptcy],’” and “as a precautionary measure” terminating the Master Agreement for cause under the Master Agreement’s controlling German law. Fraunhofer then sued SXM in 2017, and the DC subsequently granted SXM’s motion to dismiss which is the subject of this appeal. The FC panel explained that the issues here “are whether the Master Agreement was terminated and, if so, whether that termination had the effect of terminating the sublicense” (see FN7 for a discussion of the effect of the conversion from Chapter 11 to Chapter 7 bankruptcy). The FC panel first found that US law applies, not German law, since neither party raised “the issue of whether foreign law may apply” to the DC (it was therefore was waived under Third Circuit law). The FC panel also explained that while Fraunhofer had “three plausible arguments” for terminating the Master Agreement, “it is unclear whether” it “properly” did so, and did not decide that issue (nor did the DC). Then, “[a]ssuming arguendo that” it was “terminated by the Termination Letter”, the FC panel decided the Master Agreement was “ambiguous” as to survival of the sublicense” and that the issue could not be properly decided on a motion to dismiss (also explaining that “our law does not provide for automatic survival of a sublicense” (Rhone-Poulenc, FC 2001; TransCore, FC 2009; Mitchell, US 1873)).

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PTAB anticipation/obviousness decision reversed since prior art did not disclose the claimed device “arranged as claimed”

In Re: Stepen Brian Gates, Jeremy Black

Docket No. 2018-2331
October 16, 2019

Brief Summary: PTAB appeal decision affirming the examiner’s anticipation and obviousness rejections reversed and remanded since the prior art did not disclose the claimed device “arranged as claimed”.

Summary: Patent applicant Gates appealed PTAB decision affirming the examiner’s rejection of the claims of their ‘668 application directed to an integrated handheld device that can operate via a computer mouse or a remote control depending on the proximity of the device to a surface (e.g., a table) for anticipation and obviousness. The claims include a “Mode-Switching Limitation” and a “Wherein Clause”. The claims were rejected as anticipated (§ 102(a)) in view of “Tiphane” (US Pub. No. 2003/0028688) and obvious over Tiphane in view of Rogers (US 6,794,992) and/or Meyer (US 6,882,334). Gates unsuccessfully argued to the PTAB that “the embodiments in Tiphane are distinct and therefore fail to disclose” the Mode-Switching Limitation and the Wherein Clause “the limitations are arranged and claimed in the ‘668 application”, the PTAB finding that those embodiments “have ‘the “same mechanical means” for automatically transition[ing] from a second operational mode…to a first operational mode” (“a person of ordinary skill in the art would…readily envisage an embodiment…that meets the Wherein Clause”). The FC panel reviewed the PTAB’s “factual findings for substantial evidence” (anticipation, In re Rambus (FC 2012); Net MoneyIN, FC 2008 (“anticipated only if each limitation is found within a single prior art reference, ‘arranged or combined in the same way as the claim’”) “and its legal conclusions de novo” (obviousness, Polaris Ind. (FC 2018)). The FC panel found that “[s]ubstantial evidence does not support the [PTAB’s] finding that Tiphane discloses a device that would satisfy both the Mode Switching Limitation and the Wherein Clause, arranged as claimed” (e.g., “[n]othing in Tiphane indicates that the second embodiment would include the ‘same mechanical means’ as the first embodiment” or “how the features of the two embodiments could be combined in a single device”). Thus, the FC panel reversed and remanded the PTAB’s finding of anticipation. The obviousness rejection was also reversed and remanded since that finding “is based on its finding that Tiphane discloses every limitation of claim 1”.

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PTAB obviousness decision vacated as being improperly based on inherency

Knauf Insulation, Inc. et al. v. Rockwool International A/S

Docket No. 2018-1810-11, -1891
October 15, 2019

Brief Summary: PTAB inter partes reexamination obviousness determination vacated as being based on inherency.

Summary: Knauf appealed PTAB’s inter partes reexamination decision finding certain claims of US 7,888,445 and 7,772,347 relating to compounds (malanoidins), compositions and methods used to produce fibrous products such as fiberglass to be invalid for obviousness. Rockwool cross-appealed the PTAB’s decision that other claims were not invalid for obviousness. PTAB found obviousness in view of a combination of three US patent references (Wallace, Worthington and Helbing). The FC panel opinion explained do not “explicitly teach that the disclosed reactions are Maillard reaction or disclose that the result of the reactions are melanoidin products”, but that substantial evidence supported “the Board’s determination that Worthington and Wallace inherently teach Maillard reactions”. The Board relied on Helbing to teach other aspects of the claims (e.g., “it would have been obvious [to have] utilized a carbohydrate in Helbing as an exemplification of a polyhydroxy compound.”) However, the FC panel also “conclude[d] that a finding of a motivation to combine based on similarity of the references in this case is unsupported by the evidence” since the reactions disclosed in the references “are not similar enough to constitute the sole reason to combine a mosaic of disclosures from each reference to reach the claimed invention” (e.g., “Replacing Helbing’s polyhydroxy component with a reducing sugar to engage a Maillard reaction would fundamentally change the nature of the reaction taught in Helbing, “there is no reason an ordinary artisan would make a fundamental change based on ‘similarity”, “[a]lthough a reference may be used for everything it teaches…the Board did not identify any suggestion in Helbing to use a reducing sugar’”). The FC panel explained that the PTAB’s reasoning is “classic hindsight bias in light of the claimed invention” (“an illusion build upon hindsight bias”) (W.L. Gore, FC 1983) and that “[e]ven after KSR, to support a determination of obviousness that a reference includes a broad generic disclosure and a common utility to that in the claims and other prior art references-there must be some reason to select a species from the genus” (In re Jones, FC 1992; Takeda, FC 2007). The FC panel also found the PTAB’s conclusion of obviousness regarding claims having “a quantity limitation” to be erroneous (e.g., “That a prior art reference satisfies these limitations in the reactants is not enough to allow the Board to find inherency in the products of the reaction, unless there is evidence that any reaction meeting these quantity of reactant limitations would result in the quantity of product limitation.” Citing Continental Can, FC 1991, which cites In re Oerlich, CCPA 1981 (“Inherency, however, may not be established by probabilities or possibilities. The mere fact that a certain thing may result from a given set of circumstances is not sufficient.”)) The FC panel also found that Rockwell did not have standing to appeal “the Board’s holding of no invalidity with respect to the cross-appealed claims” even though it “participated in the reexamination”, as it does not have Article III standing with respect to those claims, only those “directly appealed” by Knauf (Consumer Watchdog, FC 2014 (requiring “a case or controversy between the parties”, “having an issued patent does not itself confer jurisdiction on anyone wishing to challenge its validity”).

Posted in Article III disputes, Inter Parties Review (IPR), Obviousness, Reexamination, Uncategorized | Leave a comment

Horizon’s OB ‘913 claim 12 survives obviousness challenge (Pennsaid® for osteoarthritis)

HZNP Medicines LLC et al. v. Actavis Laboratories UT, Inc.

Docket No. 2017-2149, -2152-53, -2202-3, -2206
October 10, 2019

Brief Summary: DC findings of indefiniteness, no induced infringement, and no invalidity for obviousness regarding Horizon’s OB patents for Pennsaid® affirmed.

Summary: Horizon appealed DC judgment of invalidity and noninfringement of certain Orange Book (OB) patents relating to methods and compositions for treating osteoarthritis (Pennsaid®, topical 2% diclofenac sodium, “the first FDA-approved twice-daily topical diclofenac sodium formulation for the treatment of pain of osteoarthritis of the knees”), and Actavis (which filed ANDA 207238) cross-appealed the DC’s judgment of non-obviousness regarding other patents. The FC panel opinion split the OB patents into methods-of-use (e.g., “method for applying topical agents to a knee of a patient with pain”) and formulation groups (“topical formulation consisting essentially of’). The DC found indefiniteness for the identity of the claimed “impurity A” (“identity…is unknowable”), “the formulation degrades by less than 1% over 6 months” (“neither the claims nor the specification disclose the means to evaluable degradation”), and “consisting essentially of” in the formulation patents (no identification of “basic and novel properties” that would not be “materially affect[ed]” by “unlisted ingredients”). The FC panel agreed with the DC that “impurity A” and the “degrades” term are indefinite (e.g., “[t]he claims do not make clear that ‘impurity A’ refers to an impurity of diclofenac sodium” as opposed to the “several other excipients” in “the entire topical formulation”, “written description provides no clue”, no supporting extrinsic evidence). Regarding “consisting essentially of”, the FC panel agreed that “the basic and novel properties of the formulation patents…are implicated” by the phrase, and agreed with the DC’s application of the Nautilus definiteness standard (US 2014, “inform, with reasonable certainty”), and that it was “indefinite based on its finding that the basic and novel property of ‘better drying time’ was indefinite” (detailed analysis of the specification and relevant case law is included in the FC panel opinion). Judge Newman dissented on this point.

The DC also granted summary judgment (SJ) to Actavis since Horizon did not “show that Actavis’s label induced infringement of the method-of-use patents.” The FC panel explained that “[i]t is undisputed that Actavis’s label is substantially similar to Horizon’s”, but that Actavis’s “instructions…only require the first step of” Horizon’s “patented method”, and “is broader than step three of Horizon’s claimed method” (e.g., “Actavis’s label also warns about clothing, cosmetics…and other substance” that “operates in an ‘if/then’ manner” and “does not encourage infringement” (e.g., AstraZeneca, FC 2010)).

Actavis’s ‘913 claim 12 patent obviousness theory (the only claim appealed on this point) was that the 2% formulation would have been obvious in view of a prior art 1.5% formulation, which Horizon argued “were not routine optimizations, and that the results of the various changes could not be predicted by the prior art” (e.g., “the field is…complex and unpredictable”). The FC panel found no error with the DC’s findings (e.g., “the variables involved in this case, including the inventive formulation, interact in an unpredictable or unexpected way, such that the results emanating into [the 2% formulation] were not obvious.”) Accordingly, the DC decision was affirmed.

Posted in Claim Construction, Generics / ANDA, Indefiniteness, Inducement to Infringe, Infringement, Obviousness, Uncategorized | Leave a comment

Grant of SJ of non-infringement reversed due to “genuine dispute of material fact on…whether the…software was capable of infringing uses”

NeuroGrafix, et al. v. Brainlab, Inc. et al.

Docket No. 2018-2363
October 7, 2019

Brief Summary: Grant of SJ reversed due to “genuine dispute of material fact on…whether the…software was capable of infringing uses”.

Summary: NeuroGrafix (NG) appealed multidistrict litigation court (MDL) grant of summary judgment (SJ) of non-infringement of NG’s US 5,560,360 directed to neural tissue magnetic resonance imaging (MRI) systems to Brainlab. NG alleged user of Brainlab’s software directly infringed and that Brainlab induced direct infringement. Brainlab relied “on customer-protection provisions of settlement agreements [NG] had entered into with” Siemans, GE, and Philips”; the MDL agreed as to Siemans but not GE and Philips. NG then alleged direct infringement by Brainlab “because the steps performed by Brainlab’s customers were attributable to Brainlab under an agency theory”, but the MDL disagreed (not “willing to infer from” the software manual “an affirmative intent to infringe” (Takeda, FC 2015)). The case was then remanded to the DC for invalidity proceedings, which denied NG’s motion for reconsideration that the MDL court had granted [SJ] on a basis not asserted in Brainlab’s SJ motion and dismissed Brainlab’s invalidity counterclaim. The FC panel explained that “[t]he central dispute in this appeal involves the ‘selected structure’ limitation in steps (a), (d), and (e)” as in representative “method of utilizing magnetic resonance” ‘360 claim 36 (e.g., “exposing…a selected structure that exhibits diffusion anisotropy” “to a magnetic polarizing field”). The FC panel explained that Braintree’s “non-infringement position depended on the premise that ‘select[ing] [a] structure’ requires knowing in advance the location of the chosen structure” and its “software is used to detect structures whose location is not already known.” NG argued that all that is required is “choosing a particular structure as a subject” and that “after taking a preliminary image” a structure can “be chosen for imaging”, pointing “to Brainlab’s advertisements as evidence that such a use was possible and even encouraged by Brainlab”. “In other words,” the FC panel wrote, NG “argued, and the MDL court eventually agreed, that the…software is capable of infringing uses as well as non-infringing uses”, a “showing” that “was sufficient for [NG] to defeat [SJ]” (but not a final judgment (Fujitsu, FC 2010), “and the MDL court erred in concluding otherwise” (e.g., “genuine dispute of material fact on…whether the…software was capable of infringing uses”, “[e]vidence of actual infringement…was unnecessary”). The FC panel found “[t]he MDL court’s ruling was contrary to…basic principles” of SJ (cannot be granted “on a ground that was [not] asserted” (Celotex, US 1986), accused infringer must “point[] to the specific ways in which the accused systems” do not infringe (Exigent, FC 2006)). The FC panel also considered the meaning of “selected structure, which was not precisely defined by the MDL court, concluding that it refers to “something merely located in the ‘region’” (e.g., “We have consistently interpreted ‘including’ and ‘comprising’ to have the same meaning, namely, that the listed elements…are essential but that other elements may be added.” (Lucent, FC 2005)) Thus, the MDL court’s grant of SJ was reversed.

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Method of manufacturing claims ineligible under § 101 since “the mechanism for achieving the desired result” involving a natural law “are not actually claimed”

American Axle & Manufacturing, Inc. v. Neapco Holdings LLC, et al.

Docket No. 2018-1763
October 3, 2019

Brief Summary: DC holding that AAM’s “method for manufacturing” claims are patent ineligible under § 101 affirmed (e.g., “the mechanism for achieving the desired result” using the “natural” Hooke’s law “are not actually claimed”).

Summary: AA appealed DC grant of Neapco’s motion for summary judgment (SJ) and holding the asserted claims of US 7,774,911 directed to “[a] method for manufacturing” driveline propeller shafts (“propshafts”) in a way that “attenuate[s] at least two types of vibration transmitted through the shaft” using a “liner” (a “tuned” liner) to be directed to unpatentable subject matter (§ 101). The ‘911 specification explains that “prior art liners, weights, and dampers” have been used to attenuate vibrations during manufacturing, and the FC panel opinion explains that “certain variables related to the liner” can be “changed (…‘tuned’)” to attenuate the vibrations (“Two types of attenuation are relevant here” resistive attenuation and reactive attenuation.”) The DC construed “tuning” (“tuning at least one liner”) “to mean ‘controlling the mass and stiffness of at least one liner to match the relevant frequency or frequencies’”. AAM argued “that it ‘conceiv[ed] of the novel and unconventional concept of ‘tuning’ a liner” that “‘[can] dampen multiple types of vibration’ simultaneously.” The FC panel explained that “[n]either the claims nor the specification describes how to achieve such tuning” and “discloses a solitary example describing the structure of a tuned liner, but does not discuss the process by which that liner was tuned.” It also explained that under the Mayo/Alice test, the court asks “whether the claims are directed to a law of nature, natural phenomenon, or abstract idea” and then “whether the claim embod[ies] some ‘inventive concept’” (Mayo, US 2012; Alice, US 2014). Regarding the first step, the FC panel wrote that it was known in the art “that a liner…could be designed to…function” as an attenuator and that this “at least in part involves an application of Hooke’s law” (“a natural law that mathematically relates the mass and/or stiffness of an object to the frequency with which that object…vibrates”). AAM argued “that the claims are not merely directed to Hooke’s law”, but the FC panel disagreed because “the mechanism for achieving the desired result-are not actually claimed” (Alice; Synopsis, FC 2016; Ariosa, FC 2015; Diehr (US 1981); Flook (US 1978)) The FC panel wrote that “as in Flook,…the claims here do not disclose how target frequencies are determined or how, using that information, liners are tuned to attenuate two different vibration modes simultaneously”, also recognizing “that AAM may be correct” that the claimed system “is more complex than just the bare application of Hooke’s law”. The FC panel also wrote that the enablement issues raised in Judge Moore’s dissent (e.g., “expands 101 well beyond its statutory gate-keeping function and the role of this appellate court well beyond its authority”) are not relevant here without much explanation. The FC panel then concluded that “nothing in the claims qualifies as an ‘inventive concept’” (e.g., “no more than conventional pre- and post-solution activity”), finding AAM’s arguments to be “no more than an elaborated articulation of reasons…why the claims are not directed to a natural law”. Thus, the DC’s decision was affirmed.

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