Fresh From the Bench: Latest Federal Circuit Court Cases

CASE OF THE WEEK

ThermoLife Int’l LLC v. GNC Corp., Appeal Nos. 2018-1657, 2018-1666 (Fed. Cir. May 1, 2019)

In an appeal from a district court decision, the Federal Circuit affirmed the district court’s grant of defendants Hi-Tech’s and Vita Pharmaceuticals’ motions for attorney’s fees under 35 U.S.C. § 285. At trial, the court reached judgment only that the asserted claims of the patents-in-suit were invalid; discovery on infringement had been postponed so that validity could be litigated first, and thus infringement was never adjudicated. At issue on appeal was whether, in finding the case exceptional, it was appropriate for the district court to base its decision on plaintiffs’ inadequate pre-suit investigation as opposed to basing it on an assessment of the validity position taken by plaintiffs or how they litigated validity.

Plaintiff ThermoLife, the exclusive licensee of four patents owned by Stanford University (later added as a plaintiff), asserted those patents against 81 different defendants, in 81 separate suits, in the Southern District of California. The district court consolidated all cases. In its complaints, ThermoLife alleged that appellees Hi-Tech and Vital directly and indirectly infringed the patents-in-suit, and supported its allegations with the labels and advertisements of the parties’ accused products.

ALSO THIS WEEK

Endo Pharmaceuticals, Inc. v. Actavis LLC, Appeal No. 2018-1054 (Fed. Cir. May 3, 2019)

The Federal Circuit affirmed a district court’s claim construction and obviousness determination in an ANDA case involving a patent covering certain pharmaceuticals. Specifically, claim 1 of the asserted patent recited, “A hydrochloride salt of oxymorphone comprising less than 0.001% of 14-hydroxymorphinone.” The last component is referred to as an “ABUK,” or an undesirable intermediate compound created in the production of oxymorphone. The FDA had set a regulatory requirement that ABUK content in oxymorphone products be less than 0.001%. The patents claimed this solution. The district court found the patents non-obvious over three prior art references, and the Federal Circuit agreed.

Judge Stoll dissented. In her opinion, the FDA set the standard that the inventors achieved. Since the claims did not claim how to achieve the patented invention, she would have held the claims invalid over the FDA’s communications on the topic, which, she said “disclose every limitation of claim 1.” Judge Stoll opined that, in finding the claims non-obvious, the district court committed several legal errors, including “conflating enablement and reasonable expectation of success,” and applying a “heightened standard for reasonable expectation of success.” Judge Stoll would have remanded for reconsideration applying a corrected legal standard for obviousness.

The opinion can be found here.

Trading Technologies Int’l v. IBG LLC, Appeal No. 2017-2323 (Fed. Cir. April 30, 2019)

Trading Technologies (TT) appealed a decision of the Patent Trial & Appeal Board (PTAB) in a Covered Business Method (CBM) review finding TT’s patent claims ineligible under § 101. TT’s patent related to displaying financial market information on a screen. TT contended that its claims were patentable because they present price, profit, and loss information on a “particular graphical interface” that enables traders to make faster mental calculations. The Federal Circuit affirmed the PTAB’s rejection of the claims. The Court first affirmed that the claims were CBM eligible because they solved a business problem rather than a technical problem. The Federal Circuit next upheld the PTAB’s ruling that the claims were ineligible for patenting under § 101. Under step one of the Alice framework, the Court agreed that the claims were directed to helping traders process information more quickly, and not on improving computers or technology. The Court then dismissed TT’s arguments on Alice step two, finding that there was nothing in the claim elements, either individually or as an ordered combination, that transformed the claims into a patent eligible application. Finally, the Federal Circuit declined to consider TT’s four-sentence challenge to constitutionality of CBM review, finding the conclusory argument insufficient to preserve the issue for appeal.

The opinion can be found here.

Written by: Scott D. Eads and Nika Aldrich, Schwabe Williamson & Wyatt

Contributors: Erin Forbes