Patent Office Trials Blog
    • 1/20/2015

      Following the decades-long debate about the proper standard of review for claim construction determinations, the Supreme Court this morning in Teva v. Sandoz upended long-standing rule of de novo review of claim construction by the Federal Circuit.

      In a 7-2 decision (Alito, Thomas dissenting), the Supreme Court held that when reviewing a district court's resolution of subsidiary factual matters made in the course of its construction of a patent claim, the Federal Circuit must apply a clear error standard of review, not a de novo standard of review.

      Recall that the present version of the de novo standard originated with the Cybor decision in 1997. In 2004, the Federal Circuit reheard en banc the Phillips case, and certified the question of whether or not Cybor should be reconsidered. After extensive briefing in Phillips, the Federal Circuit declined to revisit Cybor.

      Over the years, the Federal Circuit has repeatedly left Cybor alone :

      • 2006 – Amgen v. Hoechst (en banc review of Cybor denied)
      • 2011– Retractable Techs. v. Becton Dickinson (en banc review of Cybor denied)
      • 2014 - Lighting Ballast Control LLC v. Philips Electronics N.A. Corp. (en banc -Federal Circuit reconfirmed the longstanding rule that claim construction is an issue of law reviewed de novo on appeal.

      Legislative attempts to undo the de novo standard of review have also been unsuccessful

      • 2007 – S.1145 (Sen. Leahy (D.Vt.))
      • 2009 -- S.515, §8(b) 

      Today's decision represents a substantive change in our law.  To view a copy of the decision, please click here.


    • 1/1/2015
      Sughrue Mion, PLLC is pleased to announce the elevation to partnership of Ellen Resnick Smith, Azy S. Kokabi, Travis Ribar and Christopher J. Bezak. We congratulate each of them for their high level of client service, teamwork and commitment to the practice of intellectual property law.

      Ellen Resnick Smith is a 1997 graduate of the George Mason University School of Law. Ms. Smith provides extensive patent counseling for clients ranging from large multi-national corporations to small business ventures. Her counseling includes freedom-to-operate, infringement, and validity opinions. She has substantial experience providing her clients with
      strategic advice for developing and protecting their intellectual property portfolios, including developing strategies for establishing, protecting, preserving and enforcing those patent rights in the U.S. and abroad.

      Mrs. Smith’s practice encompasses the entire period of prosecution of a patent, from the initial drafting of the application to conducting oral hearings to the Board of Appeals. Her technical experience in the broad spectrum of mechanical arts ranges from fiber-optic connectors to athletic shoe designs to off-shore oil rigs. Examples of Ms. Smith's diverse technological prosecution experience includes medical devices, semiconductors, aircraft structure and operation, underground mining technologies, vehicle system management and devices, farm and construction equipment, cosmetic packaging, waste recycling management and oil/petroleum technologies.

      Azy Kokabi is a 2005 graduate of the George Mason University School of Law. Ms. Kokabi focuses her practice on patent infringement litigation in Federal Courts, with particular experience in Hatch-Waxman patent infringement litigations. She has also drafted and negotiated numerous licenses and settlement agreements involving universities, biotechnology and pharmaceutical companies. Ms. Kokabi, a registered patent attorney, has served as counsel in multiple interferences and inter partes review proceedings.

      Ms. Kokabi also prosecutes patent applications covering biotechnology and medical devices, and has been involved in a number of reexamination proceedings and reissue applications before the United States Patent and Trademark Office. Prior to joining Sughrue Mion, Ms. Kokabi worked at a boutique law firm, where she focused on interference practice. She also served at the USPTO as an Examiner, where she was responsible for examining patent applications related to medical devices and surgical bandages and interned for the Honorable Judge Rader at the Court of Appeals for the Federal Circuit.

      Travis Ribar is a 2006 graduate of the Georgetown University Law Center. Mr. Ribar practices in all areas of intellectual property law with a focus on rendering opinions on patentability, infringement, and validity, including due diligence and product clearance analysis, as well as on the litigation of intellectual property matters, including reexamination practice.

      A former Patent Examiner at the USPTO, he also counsels and assists clients in the procurement of both U.S. and foreign patents, which includes the preparation and prosecution of patent applications.
      Mr. Ribar specializes in the areas of photoresist formulations and applications, rubber compositions, plastics and adhesives, membranes, medical and drug delivery devices, display devices, semiconductor materials, food compositions, polymeric materials, and the chemical arts.

      Christopher Bezak is a 2007 graduate of Michigan State University College of Law. Mr. Bezak practices in the firm's Electrical and Internet E-Commerce & Software Practice Groups. He is involved in drafting and prosecuting patent applications involving software, computer hardware, telecommunications, Internet technologies, business methods, and electrical technologies.

      Mr. Bezak has significant IT industry experience for a software/IT/telecommunication company during which time he administered the design and maintenance of customer networks including data storage solutions, data backup solutions and data security.

    • 12/30/2014
      On December 16, 2014, the United States Patent and Trademark Office (USPTO) issued the much-anticipated “2014 Interim Guidance on Patent Subject Matter Eligibility,” superseding the previous USPTO Guidance of March 4, 2014.
    • 11/18/2014

      On November 14, 2014, the United States Court of Appeals for the Federal Circuit (CAFC) handed down its decision in Ultramercial Inc. v. Hulu LLC and WildTangent, Inc. regarding the question of whether the claims of U.S. Patent No. 7,346,545 are directed to patent-eligible subject matter under 35 U.S.C. 101.  The CAFC had previously held that the ‘545 patent does claim patent-eligible subject matter.  However, the case had been remanded to the CAFC for further consideration in light of the Supreme Court decision in Alice Corp. v. CLS Bank International, 134 S.Ct. 2347 (2014).  Now, the CAFC has held that the ‘545 patent does not claim patent-eligible subject matter. 

      Regarding the issue of whether a patent claim is directed to patent-ineligible subject matter, the CAFC sets forth a two-part test.  First, determine whether the claims at issue are directed to a patent-ineligible concept, i.e., laws of nature, natural phenomena, and abstract ideas.  Then, if the claims are directed to such a concept, determine whether the claims contain an element or combination of elements that is sufficient to ensure that the patent, in practice, amounts to significantly more than protection for the ineligible concept itself.  See Ultramercial at pp. 7-8. 

      In applying the first step, the CAFC refers to the district court finding “that the abstract idea at the heart of the ‘545 patent was ‘that one can use [an] advertisement as an exchange or currency,” and then indicates its agreement with this finding, concluding that “the concept . . . describes only the abstract idea of showing an advertisement before delivering free content.”   Id. at pp. 9-10.  

      In applying the second step, the CAFC refers to “examin[ing] the limitations of the claims to determine whether the claims contain an ‘inventive concept’ to ‘transform’ the claimed abstract idea into patent-eligible subject matter,” further stating that “[t]hose ‘additional features’ must be more than ‘well-understood, routine, conventional activity.”  Id. at p. 10.  The CAFC concludes that “the limitations of the ‘545 claims do not transform the abstract idea . . . into patent-eligible subject matter because the claims simply instruct the practitioner to implement the abstract idea with routine, conventional activity.”  Id. at p. 11.  In particular, the CAFC states that “[a]dding routine additional steps such as updating an activity log, requiring a request from the consumer to view the ad, restrictions on public access, and use of the Internet does not transform an otherwise abstract idea into patent-eligible subject matter.”  Id. 

      The CAFC is careful to indicate that “we do not purport to state that all claims in all software-based patents will necessarily be directed to an abstract idea.” Id. at p. 10.  However, the CAFC also reiterates that “adding a computer to otherwise conventional steps does not make an invention patent-eligible” because “[a]ny transformation from the use of computers or the transfer of content between computers is merely what computers do and does not change the analysis.”  Id. at p. 13.  Further, the CAFC states that “the Internet is not sufficient to save the patent under the machine prong of the machine-or-transformation test” because “[i]t is a ubiquitous information-transmitting medium, not a novel machine.”  Id. at pp. 12-13.

      This case represents a significant challenge in drafting software claims which will satisfy the test of patent eligibility under 35 U.S.C. 101. In particular, the requirement of a claim element that provides “significantly more” than the otherwise abstract idea appears to be similar to the requirements under 35 U.S.C. 102 and 103 of novelty and nonobviousness. For this reason, especially with respect to software-based claims that tend towards methods of doing business, patent applicants should emphasize a novel and nonobvious aspect with respect to how the data is being processed or manipulated, in order to have a colorable argument that these same features satisfy the requirement for “significantly more” than the underlying abstract idea. If possible, the data should be linked to a tangible representative feature, perhaps a lapsed playing or viewing time. Software-based claims that process data representative of a physical or tangible characteristic (such as in audio or video processing) should include that representative aspect within the claim language, as well as the specification.  

      For a link to CAFC's decision, click here. 

       

    More News
    • 12/29/2014
      For a patent to be valid in the United States, the claimed subject matter must be novel and unobvious in view of the requirements of 35 U.S.C. §102 and 35 U.S.C. §103. Moreover, the specification disclosure and the claims of the issued patent must meet the legal requirements set forth in 35 U.S.C. §101 and 35 U.S.C. §112, first and second paragraphs.
    • 12/5/2014

      Federal Circuit No. 2014-1693, December 5, 2014

      In this case Sandoz sought a declaratory judgment that U.S. Patents 8,063,182 (“the ’182 patent”) and 8,163,522 (“the ’522 patent”) (collectively “the patents in suit”), owned by Hoffman-LaRoche and exclusively licensed to Amgen, are invalid or not infringed by its proposed generic etanercept product.1 The patents in suit issued in late 2011 and early 2012, respectively.

      In 2004 Sandoz began developing its own etanercept product. In 2010, about a year before the patents issued, Congress enacted the Biologics Price Competition and Innovation Act (BPCIA).2 After consultation with the FDA, Sandoz announced its plan to conduct Phase III trials for its proposed etanercept product. On the same day it announced the Phase III trials, Sandoz filed a declaratory judgment action seeking judgment that its etanercept product would not infringe any valid claims of the ‘182 and ‘522 patents. Sandoz had not filed an application for FDA approval to market an etanercept product at the time of filing the declaratory judgment action. The district court dismissed Sandoz’s complaint because there was no case or controversy, concluding that Sandoz could not obtain a declaratory judgment before filing an FDA biosimilarity application. The district court also observed that both Sandoz and Amgen were precluded from filing a lawsuit unless they had engaged in the patent exchanges required by the BPCIA, which neither had done.

      The Federal Circuit affirmed the district court’s ruling, but made clear that its resolution of the case made it unnecessary to address the district court’s rationale under the BPCIA. Reviewing the district court’s decision de novo, The Federal Circuit held that in a declaratory judgment action the Court has subject matter jurisdiction only if there is sufficient “reality” and “immediacy.” The reality requirement is fulfilled when the number of contingencies that must be overcome for the DJ plaintiff to take an action exposing it to liability is sufficiently low. The immediacy requirement is fulfilled when the harm to the potential infringer at the time of the suit, in the absence of declaratory relief, is high and when the passage of time is not likely to change the nature of the suit or eliminate the controversy. The Federal Circuit agreed with Amgen that the existence of a future case or controversy on these facts is too speculative to fulfill the minimum requirements of Article III. The Court explained that it could not simply assume that the outcome of Sandoz’s Phase III trials would be favorable, that Sandoz’s proposed product would not change before the filing of an Application or before marketing, or that Sandoz would ever obtain approval for the product. Sandoz also had not shown that, in the absence of declaratory relief, it would suffer an immediate or substantial adverse impact because Sandoz could not market and sell the product at the time of the suit (June 24, 2013) anyway and the completion of Phase III trials was still two years away.

      Although the Federal Circuit refused to adopt a categorical rule, this case shows that there is a high bar for generic pharmaceutical companies contemplating declaratory judgment actions prior to filing an application for FDA approval. Additionally, the Federal Circuit specifically pointed out that it did “not decide whether, once an application is filed under the BPCIA, that statute forecloses a declaratory-judgment action concerning whether the ultimate marketing of the application-defined product would infringe under 35 U.S.C. § 271(a).”



      1Sandoz Inc. v. Amgen Inc., No. CV-13-2904 (N.D. Cal. June 24, 2013); Sandoz v. Amgen Inc., No. 2014-1693 (Fed. Cir. Dec. 5, 2014).
      242 U.S.C. § 262.

    • 12/4/2014
      Federal Circuit Nos. 2013-1625, -1631, -1632, -1633, December 4, 2014

      On December 4, 2014, in Ericsson, Inc. v. D-Link Systems, Inc., the U.S. Court of Appeals for the Federal Circuit (“Federal Circuit”) vacated the district court’s royalty awards, holding that the district court erred in including all 15 Georgia-Pacific factors in the jury instruction and in including an additional factor that made consideration of a RAND obligation optional.

      Ericsson sued D-Link and other defendants in the Eastern District of Texas for infringing 3 “standard-essential” patents (“SEP”) to the IEEE 802.11 Wi-Fi standard. The jury found that the claims were infringed by D-Link and awarded roughly $10 million in damages, approximately 15 cents per infringing device. At trial, the district court rejected D-Link’s request for a jury instruction addressing Ericsson’s obligation to license the patents on Reasonable and Non-Discriminatory (RAND) terms. That instruction addressed the dangers of “patent hold-up” (a SEP holder’s ability to insist on the additional “ex post” value flowing from the standardization) and “royalty stacking” (a situation in which a single product potentially infringes on numerous patents essential to the standard). Instead of adopting D-Link’s RAND instruction, the district court added a sixteenth factor to the 15 Georgia-Pacific factors, which stated that the jury “may consider Ericsson’s obligation to license its technology on RAND terms.” D-Link challenged on appeal the district court’s jury instructions on damages including its refusal to instruct the jury on patent hold-up and royalty stacking.

      The Federal Circuit first acknowledged that this issue was a matter of first impression. After reviewing three district court opinions thus far ruling on how to calculate F/RAND royalty rates, the Federal Circuit held that the district court erred in including all 15 Georgia-Pacific factors in the jury instruction. It reasoned that some of the factors are simply irrelevant in the context of a SEP holder’s obligation to license on “reasonable and non-discriminatory (RAND)” terms.

      The Federal Circuit also found that the district court erred in instructing the jury that it may consider Ericsson’s RAND obligation. Given Ericsson’s actual promise to license the patents at RAND rates, the Federal Circuit reasoned, the jury should have been instructed that it is obligated, not just option, to take RAND commitments into account when determining a RAND royalty rate. However, the Federal Circuit declined to endorse any methodology used in the three district court opinions or to create a bright-line rule for all RAND cases.

      The Federal Circuit further held that the royalty for SEPs should reflect the approximate value of the technological contribution, not the value of its widespread adoption due to standardization. Emphasizing that a SEP holder should only be compensated for the approximate “incremental value” that its invention adds to the product, the Federal Circuit mandated that the jury must be instructed to consider the difference between the added value of the technological invention and the added value of the invention’s standardization.

      However, the Federal Circuit affirmed the district court’s refusal to instruct the jury about patent hold-up and royalty stacking, noting that D-Link failed to produce “actual” evidence to show patent hold-up and royalty stacking. The Federal Circuit stated that “something more than a general argument that these phenomena are possibilities is necessary.”
    • 12/3/2014
      Federal Circuit No. 2014-1391, December 3, 2014

      Author: Yoonhee Kim

      On December 3, 2014, in Par Pharmaceutical, Inc. v. TWi Pharmaceuticals, Inc., the U.S. Court of Appeals for the Federal Circuit (“Federal Circuit”) vacated the district court’s judgment of invalidity, holding that the district erred in determining inherency in the context of obviousness.

      The primary issue on appeal was whether the district court erred in concluding that a certain “food effect” limitation would have been “inherent” in prior art. Par patented a method of using “nanosized” formulations of the known drug “megestrol” based on the reformulation of megestrol by reducing a particle size from micrometer range to nanometer range. The claim at issue requires in particular that there is “no substantial difference” in the absorption of megestrol between the fed and fasted states. Ruling for TWi, an ANDA filer in this case, the district court held the claim invalid as obvious, finding that all the substantive limitations in the claim were disclosed in the prior art and that the “food effect” limitation (“no substantial difference”) was “inherent” in the nanoparticulate formulation.

      The Federal Circuit vacated the district court’s inherency determination. After cautioning that the inherency analysis “must be carefully circumscribed in the context of obviousness,” the Federal Circuit set forth the rule that to be inherent, “the limitation at issue necessarily must be present, or the natural result of the combination of elements explicitly disclosed by the prior art.”

      The Federal Circuit found that the district court had not required TWi to present evidence sufficient to prove inherency under this standard. It reasoned that the district court ignored the “food effect” limitation of the claim, because there was simply no finding as to whether the claimed food effect limitation was necessarily present in the prior art combinations and because TWi failed to correlate the claimed food effect limitation as naturally resulting from the reduced particle size. The Federal Circuit then remanded the case for the district court to determine if TWi had shown that the food effect as claimed was necessarily present in the prior art combination.
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    • 1/29/2015
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      628 L Street
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      The agenda includes the topics set forth below. Additional topics may be added to take account of changes in practice and court decisions.

      Legislative Reforms
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      § 101 Patent-Eligibility, a Multi-Dimensional View
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    • 2/16-18/2015
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