Finnegan, Henderson, Farabow, Garrett & Dunner, LLP Patents Case Law in the U.S. Anthony C Tridico, Ph.D. 18 November, 2015 1
1. Teva v. Sandoz Federal Circuit it must apply a clear error standard when reviewing district court claim construction, not de novo Patents at the U.S. Supreme Court 2. Commil v. Cisco Defendant s belief regarding patent validity is no defense to induced infringement 3. Kimble v. Marvel Enterprises Patentees still cannot charge royalties after a patent expires 2
Teva Pharms. USA, Inc. v. Sandoz Inc. (Jan. 20, 2015) What level of deference should be given to a district court s review of claim construction? Existing standard was that Federal Circuit reviewed all claim construction issues de novo Standard originally set forth by en banc Federal Circuit panels in Markman v. Westview Instrs. (Fed. Cir. 1995) and Cybor Corp. v. FAS Techs. (Fed. Cir. 1998) 3
Teva Pharms. USA, Inc. v. Sandoz Inc. During Hatch-Waxman litigation over Teva s Copaxone drug, Sandoz challenged that a Copaxone patent was invalid as indefinite. After taking evidence from experts, the district court disagreed and found the claims definite. The Federal Circuit reviewed de novo and reversed. At the Supreme Court, in a 7-2 decision, Justice Breyer wrote for the majority reversing the Federal Circuit. Fact finding by the District Court underlying claim construction (i.e., extrinsic evidence ) must be reviewed only for clear error. The district court is entitled to significant deference. Matters regarding intrinsic i i evidence (patent t and prosecution history) remain subject to de novo review since those are specialized to patent law. 4
Commil USA, LLC v. Cisco Sys., Inc. (May 26, 2015) In the district court, Cisco was found to have directly infringed and induced infringement of Commil s wifi patent. The Federal Circuit vacated the part of the decision i regarding inducement, holding that t the district court should have considered Cisco s s good-faith belief that Commil s patent was invalid. Can this good faith belief form the basis of a defense to induced infringement charges? 5
Commil v. Cisco In a 6-2 decision, Justice Kennedy wrote for the majority reversing the Federal Circuit standard. Justice Scalia dissented, joined by Chief Justice Roberts. Justice Breyer did not participate. A defendant s belief that a patent is invalid does not serve as a defense to charges of inducing infringement of the patent. In dissent, Justice Scalia says if knowledge of infringement is required, and one cannot infringe an invalid patent, it must logically follow that belief of invalidity should be a defense. Taking that defense away increases the in terrorem power of patent trolls. Court also reaffirms in dicta that a party is liable for inducement of infringement only if the defendant knew of the patent and that the induced acts constitute patent infringement. This is a high bar. 6
Kimble v. Marvel Entertainment LLC (Jun. 22, 2015) Inventor Stephen Kimble was issued a patent in 1990 for a toy allowing pressurized foam to shoot from the wrists like Spiderman s web blaster. Kimble demonstrated the toy to Marvel, owner of rights to Spiderman. Marvel declined, but soon marketed its own similar toy. Kimble sued in 1997. The matter settled, with Marvel purchasing Kimble s patent in exchange for a lump sum payment plus 3% royalties on sales of the toy. The settlement agreement did not set any end date for the royalty payments. 7
Kimble v. Marvel Entertainment Marvel eventually found the 1964 Supreme Court decision Brulotte v. Thys Co., holding that a licensing agreement is invalid if it provides royalties beyond expiration of the patent. Kimble argued Brulotte should be overruled, and the Supreme Court granted certiorari. In a 6-3 decision, Justice Kagan wrote for the Court, refusing to overturn Brulotte based on stare decisis and holding that Kimble s entitlement to royalty payments ended when his patent expired in 2010. In dissent, Justice Alito (joined by Justice Thomas and Chief Justice Roberts) stated that Brulotte was an obvious mistake and the Court should decide cases on the merits. 8
1. In re Cuozzo Speed Techs. LLC Court of Appeals for the Federal Circuit Review of first IPR final written decision 2. Ariosa Diagnostics, Inc. v. Sequenom, Inc. Methods utilizing natural products are unpatentable 3. Williamson v. Citrix Online, LLC (partial en banc) Broadened application of means-plus-function function analysis 4. Akamai Techs., Inc. v. Limelight Networks, Inc. (en banc) Divided infringement is the law 5. SCA Hygiene Prods. Aktiebolag v. First Quality Baby Prods., LLC (en banc) Patent laches remains a valid defense against infringement 9
In re Cuozzo Speed Techs. LLC, No. 2014-1301 (Fed. Cir. 2015) Cuozzo Speed Techs. owned a U.S. patent for a GPS-based speedometer display that continually indicated the speed limit with colorized numbers Garmin initiated iti t an IPR of fthe patent, and in the PTAB s first AIA final written decision, the patent claims were invalidated Cuozzo appealed on three grounds: institution of the IPR, the PTO s use of the broadest reasonable interpretation standard, and denial of its motion to amend its claims during the IPR. 10
In re Cuozzo The Federal Circuit issued an initial opinion on 4 February, 2015. In a 2-1 split decision (Judges Dyk and Clevenger forming the majority), the Court held: The Court has no jurisdiction to review IPR institution decisions The PTO acted within its statutory authority in prescribing the use of the BRI standard, and that Congress would have to change that, not the Federal Circuit The Board was correct in denying Cuozzo s motion to amend. Judge Newman dissented, saying the majority decision was contrary to the purposes of the AIA. Cuozzo petitioned for en banc re-hearing. On July 8, 2015, the Court issued a revised opinion (no real change from original) and also denied en banc 6-5. Cuozzo filed a petition for certiorari to the Supreme Court in October. 11
Ariosa Diagnostics, Inc. v. Sequenom, Inc., Nos. 2014-1139, -1144 (Fed. Cir. 2015) In 1996, researchers discovered that cell-free fetal DNA (cffdna) was present in pregnant mothers plasma and serum. Sequenom used these findings to create the MaterniT21 test, which detected and amplified the fraction of the cffdna inherited from the father. This permitted testing for gender and various prenatal conditions. Sequenom patented the technology, and sent cease and desist letters to other prenatal test makers. 12
Ariosa v. Sequenom Ariosa argued that under the test set forth in Prometheus v. Mayo,, Sequenom s claims were unpatentable under 101. In 2012, Sequenom undertook an interlocutory appeal in the case when a preliminary injunction was denied. The Federal Circuit vacated and remanded, but also told the district court to evaluate in light of Myriad, which had just issued. The district court granted Ariosa s motion for summary judgment, holding that Sequenom s patent was directed to the natural phenomenon of cffdna and that the claims did not add enough to be patent eligible under 101. Sequenom again appealed to the Federal Circuit. 13
Ariosa v. Sequenom In a unanimous decision, the Federal Circuit (Reyna, Linn, Wallach) affirmed the district court and held the claims unpatentable. Judge Reyna s opinion noted that [m]ethods are generally eligible subject matter but that under the Mayo framework, these claims were not. It was undisputed that the first step of the Mayo test was met that the claims were directed to a natural phenomenon (cffdna). The second step was not met there was no inventive concept transforming the natural phenomenon into something patentable. In a concurring opinion, Judge Linn stated the Court had no choice but to follow Mayo because Mayo was so overbroad. Sequenom has filed for en banc rehearing; a decision is pending. 14
Williamson v. Citrix Online, LLC, No. 2013-1130 (Fed. Cir. 2015) )(partial en banc) ) Williamson, a trustee for bankrupt ISP At Home Corp., asserted one of the company s patents directed to online collaboration software and virtual classrooms At issue: are the claims indefinite it due to means plus function claiming and dlack of corresponding structure 15
Williamson v. Citrix The Federal Circuit panel, comprised of Judges Moore, Reyna, and Linn, vacated and remanded the district court decision on issues not related to means-plus-function claiming. The Court sat en banc for a single subsection of the opinion, regarding application of the means-plus-function statutory section, 112(f) [formerly 112, 6th paragraph] Formerly, there was a strong presumption that claims not containing the word means were not subject to 112(f). The Williamson Court removed the strong portion of the presumption to combat the proliferation of functional claiming untethered to [ 112(f)]. Other required evidentiary showings were also eliminated. 16
Akamai Techs., Inc. v. Limelight Networks, Inc., Nos. 2009-1372, -1380, -1416, -1417 (Fed. Cir. 2015) (en banc) ) In a 2014 U.S. Supreme Court decision, Limelight Networks v. Akamai Techs., Inc., a unanimous Supreme Court held there can be no liability for induced infringement where there is no single direct infringer. The Federal Circuit opted to take the case on remand sitting en banc. 17
Akamai v. Limelight The en banc Court held unanimously that direct infringement of a patented process is determined based on whether all steps of a claimed method are performed by or attributable to a single entity. Acts are attributable to an entity (1) where that entity directs or controls others performance, and (2) where the actors form a joint enterprise. All earlier precedent limiting direct infringement under 271(a) further is overruled. Limelight was thus found liable for direct infringement under this new definition. Though not expressly stated, it appears inducement can apply in divided infringement situations as long as all steps of a method are performed by or attributable to one directly-infringing infringing party. Also, a party can induce its own infringement. 18
SCA Hygiene Prods. Aktiebolag v. First Quality Baby Prods., LLC, No. 2013-1564 (Fed. Cir. 2015) (en banc) ) After the U.S. Supreme Court eliminated laches as a defense for back damages in copyright infringement cases, the Federal Circuit sat en banc to determine whether laches should still be available as a defense in patent infringement cases. SCA sent a cease and desist letter to First Quality in 2003. First Quality responded d that t SCA s patent t was anticipated i t by another patent. SCA reexamined its patent in light of the prior art, and confirmed its patentability. In 2010, 3 years after reexam, SCA sued First Quality. First Quality asserted laches as a defense. 19
SCA Hygiene v. First Quality Baby Products SCA argued that in light of Petrella, laches was no longer available as a defense for infringement within the six-year limit of 35 U.S.C. 286. The en banc Court considered two questions: Can laches eliminate back-damages for infringement occurring within the six-year statutory period? Can laches limit ongoing relief, including permanent injunctive relief and ongoing royalties? The Court split 6-5 on the first question, with the majority finding that laches remains available as a defense in patent cases. The Court was a unanimous 11-0, on the second question, holding that laches remains available as a defense to ongoing damages. However, laches should only apply ppy in extraordinary circumstances. 20
Questions? Anthony C. Tridico, Ph.D. (anthony.tridico@finnegan.com/+44 (0)20 7864 2888) Managing Partner of the firm s European office in London Experience in all aspects of patent law including prosecution, opinion preparation, due diligence investigations, interferences and litigation Practice focuses on client counseling, IP portfolio management and patent prosecution (appeals, reissue, reexam) in the chemical (organic, polymer), pharmaceutical, and biotechnological arts Frequent lecturer on various aspects of on patent law issues affecting the chemical, pharmaceutical, and biotech industries 21
Disclaimer These materials have been prepared solely for educational and entertainment purposes to contribute to the understanding of U.S. and European intellectual property law. These materials reflect only the personal views of the authors and are not individualized legal advice. It is understood that each case is fact specific, and that the appropriate solution in any case will vary. Therefore, these materials may or may not be relevant to any particular situation. Thus, the authors, Finnegan, Henderson, Farabow, Garrett & Dunner, LLP (including Finnegan Europe LLP, and Fei Han Foreign Legal Affairs Law Firm) cannot be bound either philosophically ll or as representatives ti of their various present and future clients to the comments expressed in these materials. The presentation of these materials does not establish any form of attorney-client relationship with these authors. While every attempt was made to ensure that these materials are accurate, errors or omissions may be contained therein, for which any liability is disclaimed. 22