Peter Heuser
Apr 8, 2017
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Fresh from the Bench: Precedential Patent Cases from the Federal Circuit

Written by Peter Heuser, Schwabe Williamson & Wyatt

The Circuit grants a rehearing and revises its decision in ‎Asetek to vacate the ‎overly broad portion of an injunction. ‎In ‎Wasica, the Circuit refuses to permit a party to present new ‎arguments of ‎obviousness that were different from the ‎‎“conclusory and sweeping” obviousness ‎allegations in its ‎original IPR petition. In Novartis, the panel affirms ‎a ‎determination of obviousness of IPR decisions even ‎though the patents were ‎previously found by the district court ‎not to be invalid. Medicines v. Mylan focuses ‎its claim ‎constructions on examples provided in the specification, ‎except where ‎language in the specification was found not to ‎be “definitional” in that it lacked ‎the clear expression of intent ‎necessary for a patentee to act as its own ‎lexicographer.‎ ‎

Thanks to my colleague Yuke Wang for his help with this ‎week’s report.‎

Pete ‎ ‎

Asetek Danmark A/S v. CMI USA Inc., Fed. Cir. Case 2016-‎‎1026, -1183 (April 3, 2017)‎

In an unusual, but well-justified, revision of a December, ‎‎2016 decision, the panel ‎rehears the issue of the breadth of ‎an injunction granted by the district court. In ‎the original ‎opinion, written by Judge Taranto, the panel determined that ‎the ‎injunction was over-broad but, over the vehement dissent ‎of Chief Judge Prost, ‎the majority refused to vacate even the ‎erroneous part of the injunction. ‎

Specifically, the entire panel originally agreed that the ‎injunction was over-broad ‎in that it covered Cooler Master, a ‎Taiwanese company who was not a party to the ‎case at the ‎time of the district court decision. Despite this, in its original ‎decision ‎the majority was reluctant to disturb the status quo, ‎which had existed for a year. ‎Therefore, the injunction was ‎kept in place, although the case was remanded for ‎the ‎district court to reconsider this part of the injunction. In ‎dissent, Judge Prost ‎wondered how an admittedly ‎inappropriate injunction was not vacated or at least ‎revised.‎

On rehearing, the entire panel revises the ruling to vacate the ‎injunction as it ‎applies to Cooler Master, and remands the ‎case for further consideration as to ‎whether an injunction ‎against Cooler Master is appropriate. The earlier ‎decision, ‎discussed in our December 9 report, remains in ‎effect in other respects. ‎

Read the full opinion


Wasica Finance v. Continental Automotive, Fed. Cir. Case ‎‎2015-2078, -2079, -‎‎2093 and -2096 (April 4, 2017)‎

In a consolidated appeal of IPR proceedings involving two ‎Wasica patents, the ‎panel affirms all of the invalidity ‎determinations and affirms all but one of the ‎validity rulings. ‎The patents are directed to systems for monitoring tire ‎pressure, ‎with each tire including a pressure measuring ‎device and a transmitter that sends ‎pressure data to a ‎corresponding receiver.‎

The panel affirms the claim constructions by the Board. This ‎doomed Wasica, ‎because it did not contest the invalidity ‎rulings if the constructions were affirmed. ‎Because the ‎patents had expired, the claims were construed under ‎Phillips and ‎not based on the broadest reasonable ‎interpretation. The panel first rejects ‎Wasica’s argument that ‎the claimed signals must contain numerical values ‎of ‎pressure, since claim 1 recites displaying data “as numbers ‎or symbols.” ‎Second, the panel disagrees with Wasica’s ‎argument that “emittance of a ‎predetermined switching ‎signal” should include both wired and ‎wireless ‎transmissions. The plain and ordinary meaning of ‎‎“emit” is simply “to send ‎out,” and electrical signals can be ‎‎“sent out” over wired connections. Moreover, ‎the ‎specification is rife with examples where the switching signal ‎propagates in ‎both wireless and wired form, and claims are ‎normally not construed to exclude ‎disclosed embodiments. ‎

The panel rejects Schrader’s argument that Oselin’s prior ‎art ‎transmitters must use a constant frequency. The Board ‎found, based on expert ‎testimony, that one of ordinary skill ‎would not have read Oselin to disclose what ‎Schrader’s ‎counsel urges. The decision also rejects Schrader’s ‎argument that ‎claim 6 is not anticipated since Oselin is at ‎best “unclear” as to its teaching that ‎allegedly anticipates. ‎The panel holds that ambiguous references do not ‎anticipate ‎a claim. ‎
The panel finds that substantial evidence supports the ‎Board’s ruling that ‎Oselin’s broad invocation of “any ‎modulation scheme” (a genus) ‎does not disclose the ‎constant-frequency modulation scheme of claim 6 ‎‎(a ‎species). Therefore, the Board’s determination that claim ‎‎6 is not anticipated is ‎affirmed. ‎

The panel rejects Continental’s attempts to cure its IPR ‎petition that offered only ‎‎“conclusory and sweeping” ‎obviousness allegations, noting that petitioners in ‎IPR ‎proceedings must adhere to the requirement that the ‎initial petition identify with ‎particularity the evidence that ‎supports the grounds for the challenge to each ‎claim. Unlike ‎district court litigation—where parties have greater freedom ‎to revise ‎and develop their arguments over time—the ‎expedited nature of IPRs bring with it ‎an obligation for ‎petitioners to make their case in their initial petition. After ‎Wasica ‎pointed out the flaws in Continental’s petition, rather ‎than explaining how the ‎original petition was correct ‎Continental effectively abandoned its petition in favor ‎of a ‎new argument. The panel sees no error in the Board ‎declining to engage this ‎new theory of prima facie ‎obviousness. ‎

Claim 9 requires the transmitter to send data to the receiver ‎through “at least a 4-‎bit sequence” having four smaller “bit ‎sequences” of information. Under the ‎Board’s construction, ‎the transmitted signal must include at least eight bits—‎two ‎for each component bit sequence. Not only does this ‎approach rewrite “at least ‎‎4” to mean “at least 8,” it also ‎excludes signals comprising four, five, six, or ‎seven bits that ‎are expressly covered by the claim. Moreover, the context of ‎the ‎words surrounding “bit sequence” and the disclosure of a ‎single-bit embodiment ‎requires that the claim encompasses ‎single-bit sequences. Therefore, claim 9 is ‎invalid. ‎

Read the full opinion


Novartis v. Noven, Fed. Cir. Case 2016-1678, -1679 (April ‎‎4, 2017) ‎

The panel affirms a determination of obviousness in IPR ‎decisions relating to two ‎Novartis patents directed to a ‎pharmaceutical used in the treatment of ‎Alzheimer’s, even ‎though the patents were previously found by the District ‎of ‎Delaware not to be invalid. This was based on there being ‎additional evidence of ‎obviousness submitted during the ‎IPRs, and the fact that the preponderance of ‎evidence ‎burden of proof in the PTO is not nearly as exacting as the ‎clear and ‎convincing evidence standard in court. ‎

In contending that the PTO erred in reaching a decision that ‎is contrary to that ‎reached by the Delaware District Court and ‎the Federal Circuit, Novartis relies on ‎a single sentence from ‎the Circuit’s 2012 Baxter International decision. There, ‎the ‎Circuit stated that the PTO “ideally should not arrive at a ‎different conclusion” if it ‎faces the same evidence and ‎argument as a district court. Novartis treats “ideally” ‎in that ‎passage as a mandate. However, the context in which that ‎passage ‎appears demonstrates that the Circuit used “ideally” ‎to connote aspiration and, in ‎fact, recognized that Congress ‎has provided a separate review mechanism before ‎the PTO ‎with its own standards. The panel refuses to “imbue Baxter ‎with a ‎meaning that the decision itself does not support.”‎

Moreover, the record here differed from that in the prior ‎litigation, because Noven ‎has presented additional prior art ‎and declaratory evidence that was not before ‎the Delaware ‎court. Nevertheless, even if the record were the same, ‎Novartis’s ‎argument would fail as a matter of law because a ‎petitioner in an IPR proves ‎unpatentability by a ‎preponderance of the evidence (see 35 U.S.C. § ‎‎316(e)) ‎rather than by clear and convincing evidence as in ‎district court litigation. This ‎means that the PTAB properly ‎may reach a different conclusion based on the ‎same ‎evidence. That position comports with the 2016 case of ‎Cuozzo Speed ‎Techs v. Lee, in which the Supreme Court ‎held that a district court may find a ‎patent claim to be valid, ‎and the PTO may later cancel that claim in its own ‎review. ‎The opinion concludes its analysis by finding that ‎substantial evidence supports ‎the Board’s determination of ‎the teachings of the prior art and a motivation ‎to ‎combine.‎ Novartis asks the panel to reweigh the evidence ‎and give greater weight to its expert ‎testimony, but the Circuit ‎refuses to reweigh evidence presented to the PTO. ‎


Comment: Note that the panel did not get into a discussion ‎as to the finality of the ‎district court decision as it did in ‎Fresenius USA, Inc. v. Baxter Int'l, Inc., 721 f . 3d 1330 ‎‎(Fed. ‎Cir. 2013) and ePlus, Inc.v. Lawson Software, 760 f . 3d 1350 ‎‎(Fed. Cir. 2014). The ‎panel must have felt that the ‎intervening Cuozzo decision rendered that ‎discussion ‎unnecessary.‎

Read the full opinion


The Medicines Company v. Mylan, Fed. Cir. Case 2015-‎‎1113, -1151, and -‎‎1181 (April 6, 2017)‎

The panel reverses a ruling that two Medicines patents ‎directed to its ANGIOMAX® ‎anti-clotting drug were infringed ‎by a product proposed in Mylan’s ANDA filing.‎

Medicines sued Mylan for patent infringement based on ‎Mylan’s seeking to market a ‎generic version of ANGIOMAX. ‎After construing the claims, the district court held ‎on ‎summary judgment that Mylan did not infringe the ’343 ‎patent because Mylan’s ‎process is more inefficient than the ‎‎“inefficient mixing process” of Example 4. With ‎respect to the ‎‎’727 patent, however, the court held that “efficiently mixing” ‎was not a ‎claim limitation, so this precluded summary ‎judgment. After a bench trial, the court held ‎that Mylan’s ‎ANDA filing infringed the ’727 patent. ‎

On appeal, the panel agrees with Mylan that “efficient ‎mixing” is required by the ‎‎“batches” limitation and is ‎therefore a limitation of both the ’727 and ’343 ‎patents. ‎Adopting Medicines’ interpretation of the “batches” ‎limitation would yield an ‎unworkable claim construction. ‎Under Medicines’ interpretation, proof of infringement ‎would ‎necessitate forward-looking assessments of whether an ‎accused infringer’s ‎production of future or “potential” ‎batches would meet the claimed purity levels. If a ‎defendant ‎using the same process produced fifty batches, each ‎reaching that purity ‎level, each of those fifty batches would ‎infringe. But the defendant would not know ‎whether any of ‎the batches infringed until all fifty batches had been ‎produced. For an ‎ongoing commercial compounding ‎process, under Nautilus, this approach cannot ‎provide ‎‎“reasonable certainty” regarding the scope of the asserted ‎claims. ‎

As to the construction of “efficient mixing,” Medicines ‎extracts a verbatim statement ‎from the specification that ‎purports to define the term. However, according to the ‎panel, ‎this statement is not “definitional” because it does not ‎accord with the linguistic formula ‎used by the patentee to ‎signal the designation of other defined terms. In ‎defining ‎terms, the patentee always used a similar format: ‎the defined term in quotation marks, ‎followed by the terms ‎‎“refers to” or “as defined herein.” Because the quoted ‎language ‎departs from this format, the statement Medicines ‎relies on lacks the clear expression ‎of intent necessary for a ‎patentee to act as its own lexicographer. ‎

Moreover, Medicines’ construction of “efficient mixing” ‎attempts to cover all methods of ‎meeting this purity level, ‎without describing the entire range of processes. The ‎panel ‎rejects this argument, noting that the compounding ‎must be defined in terms of the ‎particular processes ‎identified in the specification, so Medicines’ construction is ‎not ‎correct.‎

In the panel’s view, Examples 4 and 5 in the specification ‎clearly state what efficient ‎mixing is and is not. Based on ‎this, the panel construes the “efficient mixing” required ‎by ‎the patents in suit to require using the efficient mixing ‎conditions of Example 5. ‎Under this claim construction, ‎Mylan’s ANDA does not infringe the asserted claims ‎since ‎Mylan does not use the process required by Example 5. ‎

Comment: Readers may recall that in an earlier appeal, a ‎panel of the Circuit found ‎these patents invalid because of a ‎sale to Medicines from its supplier Ben Venue. An ‎en banc ‎Circuit disagreed, holding that Medicines’ relationship with ‎Ben Venue was ‎such that Medicines was only purchasing ‎services, and since title to the product never ‎passed between ‎the two entities, this was not a barring “sale.” See Medicines ‎v. ‎Hospira,‎ 827 f . 3d 1363 (Fed. Cir. 2016).

Read the full opinion

This article was originally published on Schwabe, Williamson & Wyatt's Ideas Fuel Industries Section