Tuesday, November 21, 2017

Mixed result in CAFC decision in Presidio case

The outcome

Presidio filed suit against American Technical Ceramics
Corp. (“ATC”) for patent infringement in the District
Court for the Southern District of California. After separate
jury and bench trials, the district court held the
asserted claims were infringed and not invalid, and
granted a permanent injunction. The district court limited
damages due to intervening rights.

We affirm the district court’s holdings that the claims
are not indefinite and that ATC is entitled to absolute
intervening rights because a substantive amendment was
made during reexamination. We conclude that the evidence
does not support an award of lost profits and,
therefore, reverse the award of lost profits and remand for
determination of a reasonable royalty. We conclude that
the district court did not abuse its discretion in declining
to award enhanced damages. We vacate the permanent
injunction, and remand for further proceedings with
respect to the injunction.

The technology:

Presidio’s suit against ATC, filed on September 2,
2014, alleged infringement of U.S. Patent No. 6,816,356
(“the ’356 patent”). The ’356 patent claims a multilayer
capacitor design and teaches a multilayer integrated
network of capacitors electrically connected in series and
in parallel.

As to indefiniteness:

Here, the patent discloses a method of measuring capacitance
called insertion loss testing.
While it was established that insertion loss testing
could be used to measure overall performance of capacitors,
it was not well known as a method to measure the
comparative contributions from different capacitances
within the multilayer capacitor
Under our post-Nautilus cases, a claim is not indefinite
if a person of skill in the art would know how to
utilize a standard measurement method, such as insertion
loss, to make the necessary measurement. A patent need
not explicitly include information that is already well
known in the art. Nautilus, 134 S. Ct. at 2127; see also
Dow Chem. Co. v. Nova Chem. Corp., 809 F.3d 1223, 1225
(Fed. Cir. 2015) (Moore, J., concurring in the denial of the
petition for rehearing en banc) (citing Wellman, Inc. v.
Eastman Chem. Co., 642 F.3d 1355, 1367 (Fed. Cir.
2011)). “[I]f a skilled person would choose an established
method of measurement, that may be sufficient to defeat
a claim of indefiniteness, even if that method is not set
forth in haec verba in the patent itself.” Dow, 809 F.3d at
1224 (Prost, C.J., Dyk & Wallach, JJ., concurring in the
denial of the petition for rehearing en banc). For example,
in Ethicon Endo-Surgery, Inc. v. Covidien, Inc., 796 F.3d
1312, 1316 (Fed. Cir. 2015), claims covered surgical
shears for cutting and sealing blood vessels that required
a clamping pressure within a specified range.
Even assuming that ATC is correct that an entirely
new method could in some circumstances render the
claims indefinite, this is not such a situation. Here, as we
earlier noted, the insertion loss testing method was well
established and referenced in the patent. Although the
specific steps performed by Dr. Huebner had not been
published in any industry publications or peer-reviewed
articles, the general approach of making modifications to
a capacitor to isolate the impact of discrete capacitances
was within the knowledge of someone skilled in the art.
Based on this record, the district court could properly
conclude that such measurement was within the skill of a
skilled artisan based on an established method.

As to lost profits:

The third issue is whether the district court correctly
awarded lost profits. The district court held that the jury
verdict awarding lost profits was supported by substantial
evidence and denied judgment as a matter of law. The
question is whether Presidio established its right to
recover lost profits for its sales of the BB capacitors,
which Presidio claimed were adversely affected by the
sale of ATC’s infringing 550 line of capacitors.
To recover lost profits, the patentee bears the burden
of proof to show a “reasonable probability that, ‘but for’
infringement, it would have made the sales that were
made by the infringer.” Crystal Seminconductor Corp. v.
TriTech Microelecs. Int’l, Inc., 246 F.3d 1336, 1353 (Fed.
Cir. 2001); BIC Leisure Prods, Inc. v. Windsurfing, Int’l,
Inc., 1 F.3d 1214, 1218 (Fed. Cir. 1993). “But-for” causation
can be proven using the test given in Panduit Corp. v.
Stahlin Bros. Fibre Works, Inc., 575 F.2d 1156 (6th Cir.
1978). See Versata Software, Inc. v. SAP Am., Inc., 717
F.3d 1255, 1264 (Fed. Cir. 2013). The four-factor Panduit
test requires the patentee to show: (1) demand for the
patented product; (2) an absence of acceptable, noninfringing
substitutes; (3) manufacturing and marketing
capability to exploit the demand; and (4) the amount of
profit that would have been made. Panduit, 575 F.2d at
The district court’s analysis and Presidio’s argument
were flawed. The correct inquiry under Panduit is whether
a non-infringing alternative would be acceptable compared
to the patent owner’s product, not whether it is a
substitute for the infringing product. “The ‘but for’ inquiry
therefore requires a reconstruction of the market, as it
would have developed absent the infringing product, to
determine what [sales] the patentee ‘would . . . have
made.’” Grain Processing, 185 F.3d at 1350. The district
court erred by relying on evidence about sales of the 560L
capacitor in competition with the currently infringing
product, rather than comparing the 560L capacitor to
Presidio’s BB capacitor in a hypothetical market without
the infringing 550 capacitor. There was not substantial
evidence in the record upon which a jury could conclude
that the 560L was not an acceptable, noninfringing alternative
for Presidio’s BB capacitors. Undisputed evidence
showed that the 560L capacitor was less expensive than
Presidio’s BB capacitor and also had lower insertion loss
for at least some frequencies, which indicates better

On the matter of the injunction:

A district court abuses its discretion
when it makes “a clear error of judgment in weighing
relevant factors or exercise[s] its discretion based upon an
error of law or clearly erroneous factual findings.” Innogenetics,
N.V. v. Abbott Labs., 512 F.3d 1363, 1379
(Fed. Cir. 2008).
The district court
then based its conclusion as to irreparable injury on the
jury’s lost profits award. The district court reasoned that
“[t]he jury’s lost profits award also supports a finding of
irreparable injury” because “the jury necessarily found
ATC’s [550] capacitor sales caused Presidio to lose BB
capacitor sales.” J.A. 87. In light of our reversal of the lost
profits award for lack of proof of past lost sales, we must
vacate the injunction.

CBS "Sunday Morning" food episode on 19 Nov 2017 had some IP themes

As to patents

The Naxon bean cooker was the predecessor to the “crock pot.” “Sunday Morning” noted:

Irving Naxon's electric bean cooker, the Beanery, was inspired by his Lithuanian Jewish mother's stories of her childhood. "On Friday afternoons, as the ovens were being turned off for the Sabbath, they would put the crock in the ovens," recalled Irving Naxon's daughter, Lenore. "And then, when shabbat was over Saturday night, they would have their Saturday evening dinner."
The Beanery was one of over 200 inventions Naxon patented before eventually selling his company to Rival.
The topic of patents also arose in the story of catsup: “The 4707 has actually been patented by Heinz, the result of years of research and development. “

In the “Today’s Special” component, Susan Spencer talked about pumpkin pie spice, an invention of sorts:
Pumpkin Pie Spice is a blend of four spices: cinnamon, allspice, ginger, and nutmeg.
McCormick started the magic back in 1934. Jill Pratt, VP of marketing at McCormick: "Pumpkin pie spice was originally created to make great-tasting pumpkin pies."
The shift to “wisdom of the crowd” was seen in the story on the Black Swan restaurant, owing its fame to ranking on Trip Advisor. The Black Swan was named the Best Restaurant in the World by Trip Advisor.
The impact of the Trip Advisor credential was noticeable:
"In terms of business, it's just a game-changer," chef Tommy Banks said. "We're fully booked. We release bookings three months in advance. And people sit online at midnight and snap them bookings up. So it's amazing. You don't even have to answer the phone. Because by the time you wake up in the morning, all the bookings have gone!"

The word “innovation” arose:
What's the attraction? Innovative cooking using local products. Really innovative.
The Black Swan's signature dish, based on the previously humble beet root, treated more like a steak, with exotic toppings.
"Kind of a braised meat," Banks said, "on top of it you got horseradish and the goat's curd. And beef and horseradish is, like, the most classic English [dish]."
"So, where did that idea come from? How did you decide, 'Hmm, beet root'?"
"Well, when you got about 10,000 beet root in a field, you have to come up with a pretty original idea of something to do with it!"
Martha Stewart came up with a few trademark-worthy remarks:

I understand how oprah feels

Good for the brand

As to the topic of “multicookers,” see

Monday, November 20, 2017

BASF wins appeal at CAFC; decision of Judge Sue L. Robinson reversed

BASF Corporation owns U.S. Patent No. 8,524,185,
which describes and claims systems for performing catalytic
conversion of nitrogen oxides (NOx) in an exhaust gas
stream. As relevant here, the patent claims a partly-duallayer
arrangement of coatings on a substrate over which
exhaust gas passes—a coat along the full length of the
substrate containing “a material composition B effective
to catalyze selective catalytic reduction (SCR) of NOx”;
and beneath part of that coat, on the outlet end of the gas
passage, a partial-substrate undercoat containing “a
material composition A effective for catalyzing NH3
oxidation” (ammonia oxidation, or AMOx). ’185 patent,
col. 19, lines 40–55 (claim 1); see also id., col. 20, lines 3–5
(dependent claim 5, similar); id., col. 20, lines 42–62
(independent claim 17, similar, but adding restrictions
concerning precious metals). In 2014, BASF sued its
competitor, Johnson Matthey Inc., for infringement of the
’185 patent. The district court held that the “effective for
catalyzing”/“effective to catalyze” language is indefinite
and entered judgment of invalidity of all claims on that

BASF appeals. We have jurisdiction under 28 U.S.C.
§ 1295(a)(1). We reverse the judgment of invalidity for
indefiniteness. We remand for further proceedings in
accordance with this opinion.

Of the law:

We review a determination of indefiniteness de novo.
Id. Determinations about governing legal standards and
about intrinsic evidence are reviewed de novo, and any
factual findings about extrinsic evidence relevant to the
question, such as evidence about knowledge of those
skilled in the art, are reviewed for clear error. Id. at
1377–78, 1382; see Teva Pharm. USA, Inc. v. Sandoz, Inc.,
135 S. Ct. 831, 841–42 (2015); UltimatePointer, L.L.C. v.
Nintendo Co., Ltd., 816 F.3d 816, 826 (Fed. Cir. 2016);
Teva Pharms. USA, Inc. v. Sandoz, Inc., 789 F.3d 1335,
1342 (Fed. Cir. 2015).

The CAFC found no reasoning in the district court opinion

Under Nautilus, the question presented here is this:
would the “composition . . . effective to catalyze” language,
understood in light of the rest of the patent and the
knowledge of the ordinary skilled artisan, have given a
person of ordinary skill in the art a reasonably certain
understanding of what compositions are covered? The
district court’s reasoning supplies no basis to answer that
question in Johnson’s favor.


Indeed, the district court did not treat the mere observation
about information not “recited” as itself answering
the question. The court immediately went on to
declare that “[w]ithout such information, a person of
ordinary skill in the art could not determine which materials
are within the ‘material composition A’ or ‘material
composition B’ limitation, and which are not.” J.A. 5.
That sentence is the crucial sentence in the district court’s
The problem with that sentence, however, is that it is
entirely unsupported, whether by reference to the specification
or other intrinsic evidence or by reference to extrinsic
evidence. Such support was central to our
determination that indefiniteness of certain physicalproperty
claims was proved in cases such as Dow Chemical
Co. v. Nova Chemicals Corp. (Canada), 803 F.3d 620,
633–35 (Fed. Cir.), rehr’g denied, 809 F.3d 1223 (Fed. Cir.
2015); Teva, 789 F.3d at 1342–45; Halliburton Energy
Services, Inc. v. M-I LLC, 514 F.3d 1244, 1252–54 (Fed.
Cir. 2008); and Honeywell International, Inc. v. International
Trade Commission, 341 F.3d 1332, 1340–42 (Fed.
Cir. 2003). The district court’s analysis in the present
case lacks such support for its conclusion about what a
relevant skilled artisan could determine without more
information than the patent here provides.
The district court’s analysis does not consider that the
specification makes clear that it is the arrangement of the
SCR and AMOx catalysts, rather than the selection of
particular catalysts, that purportedly renders the inventions
claimed in the ’185 patent a patentable advance over
the prior art. As a result, the claims and specification let
the public know that any known SCR and AMOx catalysts
can be used as long as they play their claimed role in the
claimed architecture. The district court’s analysis also
does not address the significance of the facts that both the
claims and specification provide exemplary material
compositions that are “effective” to catalyze the SCR of
NOx and the oxidation of ammonia, disclose the chemical
reactions that define the “SCR function” and “NH3 oxidation
function,” ’185 patent, col. 5, lines 33–49, and illustrate
through figures, tables, and accompanying
descriptions how the purportedly novel arrangement of
the catalysts results in improved percent conversion of
ammonia and improved nitrogen selectivity, see id., cols.


Dr. Epling’s declaration describes his own work with
“SCR catalysts,” speaks of “ammonia oxidation catalysts,”
gives examples of materials that can catalyze under
which conditions, and identifies materials that would “to
some measurable extent[] catalyze the oxidation of ammonia
if used to treat diesel engine emissions.” J.A. 951,
953. In those ways, Dr. Epling’s declaration implicitly
confirms that the terms at issue are ones whose scope is
understood with reasonable certainty by relevant skilled
artisans. Dr. Epling’s declaration also states: “In my
experience, scientists and engineers in th[e] field do not
consider materials that display only a minimal level of
SCR or ammonia oxidation function to be a material
effective to reduce NOx or to oxidize ammonia.” J.A.
1410. That assertion does not contradict the position of
BASF and its expert, which was that relevant skilled
artisans would reasonably understand what level (under
what conditions) qualify a composition as a claimed
catalyst. In fact, Dr. Epling’s assertion tends to confirm
the existence of just that understanding.

This record, we conclude, does not contain intrinsic or
extrinsic evidence that would support a judgment of

Friday, November 17, 2017

On comments within Facebook groups comprising possibly defamatory social media statements

From Cory Batza, 44 Pepp. L. Rev. 429 (2017)

In another case dealing with an allegedly defamatory tweet, Feld v. [page 456] Conway, n182 the court considered whether a tweet was defamatory in the context of the entire conversation. n183 Feld, the plaintiff, arranged to have a horse breeder ship her horse to a farm to become a companion horse, but the horse was instead shipped to Canada and potentially slaughtered. n184 The mishap became the topic of an ongoing online debate. n185 Conway, the defendant, entered into the debate and posted the allegedly defamatory tweet. n186 Feld's professional success was dependent upon "public review and endorsement of her publications," and interested parties often searched her name on the Internet. n187 The allegedly defamatory tweet appeared in the search results on Internet search engines when users entered Feld's name, causing extensive harm to Feld's reputation. n188 In her defense, the defendant asserted that the statement was a constitutionally protected opinion. n189 The court ultimately found that the statement was protected because the tweet was a part of a heated Internet debate about the plaintiff's responsibility for the disappearance of her horse. n190

Similarly, in Finkel v. Dauber, n191 a court again analyzed allegedly defamatory social media statements by looking at the conversation's context. n192 In Finkel, a social media user sued a group of adolescents when they posted comments about her on a secret Facebook page that stated she "was seen having sexual relations with a horse, contracted HIV from sharing needles with heroin addicts, contracted AIDS from a male prostitute, and [page 457] transformed into the devil." n193 The adolescents were officers of a secret Facebook group n194 called "Ninety Cents Short of a Dollar" that did not have public content or appear on any Facebook member's profile. n195 In considering whether the plaintiff was defamed, the court took special note of the fact that the plaintiff never alleged that the secret group's posts were "accessible to anyone outside the group" and that her name was never actually used in the posts. n196 Taken together, the court stated that: "The entire context and tone of the posts constitute evidence of adolescent insecurities and indulgences, and a vulgar attempt at humor. What they do not contain are statements of fact." n197

Courts should follow the Finkel court's approach to ensure that tweets that are no more than "rhetorical hyperbole" are not held to be [page 458] defamatory. n198 Conversely, courts should not be too quick to decide that any hastily constructed and posted tweet is necessarily an opinion and not a false statement of fact. n199 For social media backlash, the context is typically the same: an individual with an average social media presence posts some type of statement or photo onto his or her social media page, and the social media community responds by condemning the user and flooding the Internet with a false perspective of that individual's identity. n200 As was the case in Feld v. Conway, n201 these defamatory tweets or Facebook posts are typically searchable and available to the public through search engines. n202 Therefore, social media backlash implicates more reputational issues because the wider online community thinks less of the plaintiff rather than simply a small group of people. n203 It is easy to say that these types of statements are not "vulgar attempt[s] at humor" n204 because they are real responses to some distinct post. n205 The issue would be whether, in the context of strangers commenting about a social media user they have never met, the allegedly defamatory statements could be construed by a reasonable observer as conveying facts. n206
The court's view of Twitter or Facebook will likely determine if the court will hold that a reasonable factfinder could conclude that the tweet or Facebook comment is a provable false statement of fact. n207 If the court believes social media sites are simply platforms for users to instantaneously vent and the reasonable viewer does not actually take these comments seriously, then it will likely rule that the allegedly defamatory tweet or Facebook comment is not based in fact. n208 However, if the court sees social [*459] media sites as valuable mediums for discourse, n209 it will be more likely to conclude that a defamatory comment would be taken seriously and therefore not be protected by the First Amendment. n210

See also Cohen v. Google, Inc., 887 N.Y.S.2d 424 (N.Y. Sup. Ct. 2009)

See also Parker v. Google, Inc., 422 F. Supp. 2d 492, 500 (E.D. Pa. 2006). Roy Parker was an author who claimed that Google should be held liable for defamation and invasion of privacy because it archived false statements about him posted by Google group users, provided a search function that returned a list of websites containing his name, and continued to cache such websites after being notified that they were defamatory. Id. [ from 44 Val. U.L. Rev. 329 ]

See also 15 N.C. J.L. & Tech. 463: Google describes some specific requests related to YouTube and Google Groups.

Thursday, November 16, 2017

On the website Ripoff Report, a forum for complaints

Small Justice v. XCentric, 873 F.3d 313 (CA1 2017) explores an interesting attempted use of copyright law.

The beginning of the decision describes the features of "Ripoff Report."

Xcentric operates a website called the Ripoff Report. The website's purpose is to permit consumers "to post free complaints, called 'reports,' about companies and individuals whom [sic] they feel have wronged them in some manner." The website works as follows for one who wishes to post a report on it.

Before submitting a report to be posted on the website, the would-be poster must click through a series of screens. Those screens ask the user to describe and to categorize the nature of the complaint that the user wishes to post as a report.

Ultimately, a user attempting to post a report encounters a final screen that is captioned, "Submit your Report." Below that caption is a text box. That text box is separately captioned, "Terms and Conditions," and contains a vertical scroll bar on the right side. Without employing the vertical scroll bar, a user who encounters this screen can see the very beginning -- but only the very beginning -- of what is a longer list of terms and conditions.

One of the "Terms and Conditions" -- which, according to the District Court, is "not visible unless a user employs the scroll bar" -- provides: "[b]y posting information or content [*4] to any public area of [the Ripoff Report], you automatically grant, and you represent and warrant that you have the right to grant, to Xcentric an irrevocable, perpetual, fully-paid, worldwide exclusive license to use, copy, perform, display and distribute such information and content . . . ." As the District Court noted, in order to post a report, a user is not required to click on a box indicating that the user has read and agreed to the text set forth in the text box captioned, "Terms and Conditions."

Underneath the text box captioned "Terms and Conditions," there is additional text that appears without any caption above it. As is relevant here, at the time in question, that text stated:

By posting this report/rebuttal, I attest this report is valid. I am giving Rip-off Report irrevocable rights to post it on the website. I acknowledge that once I post my report, it will not be removed, even at my request. Of course, I can always update my report to reflect new developments by clicking on UPDATE.
Adjacent to this text is a check box. The parties agree that, to submit a report to be posted on the website, a user of the Ripoff Report must click on this check box. The user must then click [*5] on the "continue" button at the bottom of the same screen.

And, as to the parties:

Several years ago, Goren was the subject of two negative reports that had been posted on the Ripoff Report. The person who posted the two reports, DuPont, had been the defendant in a lawsuit in which Goren was representing a party suing DuPont. In the two postings, DuPont leveled a number of criticisms regarding Goren's character and conduct.

In response, Goren filed suit in Massachusetts state court, under Massachusetts state law, for libel and intentional interference with prospective contractual relations. Goren sought both money damages and injunctive relief in the form of an order "enjoining [DuPont] from continuing to publish" the reports that DuPont had posted.

DuPont did not defend the lawsuit, and Goren, after first voluntarily dismissing those counts of the state court complaint that sought money damages, successfully obtained a default judgment. The state court granted Goren certain equitable relief in connection with that [**1309] default judgment. Specifically, the state court enjoined DuPont from "continuing to publish or republish" the two reports that DuPont had posted. The state court also transferred to Goren "all rights [*6] in and to ownership of the copyright" for each of the two reports that DuPont had posted. Finally, the state court appointed Goren as DuPont's attorney-in-fact in order to "execute and deliver a conveyance, transfer, and assignment of all rights in and to ownership" of DuPont's copyright in each posting to Goren. Thereafter, Goren assigned to himself the copyright in the reports that DuPont had posted, which Goren then assigned to Small Justice.


The plaintiffs next proceeded to file this lawsuit in federal court in Massachusetts against Xcentric, the owner of the Ripoff Report. As amended, the plaintiffs' complaint claimed, with respect to copyright law, a right to a declaration of Small Justice's ownership of the copyright to the two reports that DuPont had posted, and copyright infringement. The amended complaint also made claims under Massachusetts state law for libel, intentional interference with prospective contractual relations, and violations of chapter 93A.

As a first point:

The plaintiffs appear to concede that the Ripoff Report qualifies as an ICS under § 230 and, thus, that Xcentric enjoys immunity under that section from claims that would treat it "as the publisher [*17] or speaker of any information provided by another [ICP]," 47 U.S.C. § 230(c)(1). See Klayman v. Zuckerberg, 753 F.3d 1354, 1358, 410 U.S. App. D.C. 187 (D.C. Cir. 2014) "[A] website does not create or develop content when it merely provides a neutral means by which third parties can post information of their own independent choosing online."). However, the plaintiffs contend that Xcentric may not claim CDA immunity under § 230 because the plaintiffs contend that those postings do not constitute "information provided by another [ICP]." 47 U.S.C. § 230(c)(1).


As we explained in Lycos, immunity [*18] under § 230 should be "broadly construed." 478 F.3d at 418-19. In fact, we noted there that Congress has expressed a "policy choice . . . not to deter harmful online speech through the . . . route of imposing tort liability on companies that serve as intermediaries for other parties' potentially injurious messages." Id. at 418(quoting Zeran v. Am. Online, Inc., 129 F.3d 327, 330-31 (4th Cir. 1997))(omissions in original). Given that legislative policy choice, we do not see how we can construe the CDA's definition of an ICP -- which provides that an ICP is a "person or entity that is responsible . . . for the creation or development of information[,]" 47 U.S.C. § 230(f)(3) -- to encompass Xcentric in this case.

Such a construction of this statutory definition of an ICP would flout Congress's intent by wrongly preventing an ICS like Xcentric from claiming immunity. Lycos, 478 F.3d at 418. As the plaintiffs recognize, Xcentric did not alter the content of the information DuPont posted such that Xcentric could be said to have been "responsible for . . . creat[ing] or develop[ing]" that content by reason of having actually authored it, whether in whole or in part. In addition, as the District Court found, nothing in the amended complaint indicates that Xcentric, simply by holding itself out as the copyright holder of the postings or by directing [*19] search engines to cache DuPont's postings on their websites, "specifically encourage[d]" the content set forth in DuPont's postings.

In fact, a sister circuit has rejected the view that an ICS, by merely providing such direction to search engines with respect to information the ICS has not altered, becomes an ICP of that information. See Kimzey v. Yelp! Inc., 836 F.3d 1263, 1270-71 (9th Cir. 2016) ("Yelp is not liable for disseminating . . . [user-generated] content in essentially the same format to a search engine, as this action does not change the origin of the third-party content." (citing Ascentive, LLC v. Op. Corp., 842 F. Supp. 2d 450, 476 (E.D.N.Y. 2011))); see also Ayyadurai v. Floor64, Inc., No. 17-10011-FDS, 2017 U.S. Dist. LEXIS 144030, 2017 WL 3896668, *17 (D. Mass. Sept. 6, 2017) (analyzing cases from other circuits which determined that "republishing and commenting upon user generated content, does not constitute 'creation or development.'" (citation omitted)). And we do not see why that conclusion should differ if the ICS also represents that it holds the copyright. Nor are we aware of any precedent that requires a contrary conclusion. Accordingly, we affirm the District Court's ruling on the motion to dismiss.

As to copyright issues:

The District Court concluded that "DuPont conveyed a nonexclusive, irrevocable license to Xcentric to display the [two postings]" when DuPont clicked the check box next to the accompanying text stating that a user who posts on the Ripoff Report agrees to give an "irrevocable right[]" to Xcentric to display his postings on the Ripoff Report website. As a result, the District Court held, even if Xcentric was not "the owner of the copyright to [DuPont's postings]," Xcentric could nevertheless "display them in perpetuity" without infringing DuPont's copyright.

In arguing otherwise, the plaintiffs do not dispute that in the case. "[u]ses of the copyrighted work that stay within the scope of a nonexclusive license are [*21] immunized from infringement suits." John G. Danielson, Inc. v. Winchester-Conant Props., Inc., 322 F.3d 26, 40 (1st Cir. 2003) (citing Graham v. James, 144 F.3d 229, 236 (2d Cir. 1998)). The plaintiffs also do not contend, at least in their opening brief, that Xcentric exceeded the scope of the nonexclusive license, insofar as Xcentric had that license.11 Instead, the plaintiffs contend that Xcentric did not obtain a valid nonexclusive license to display DuPont's postings for two reasons.

Footnote 11

11 In their reply brief, for the first time, the plaintiffs argue the scope of the nonexclusive license was only "to post [the defamatory report] on the website" and that Xcentric exceeded that scope of the license by "add[ing] its notice of copyright ownership to each report, tag[ging] the report with codes and instructions to allow Google and other third-party search engines to index and also to display copies of it extrinsic to the website." But, .arguments developed for the first time in a reply brief are waived. See Braintree Labs., Inc. v. Citigroup Glob. Markets Inc., 622 F.3d 36, 44 (1st Cir. 2010) (finding waived an argument cursorily mentioned in appellant's opening brief, as even "[t]he slight development in the reply brief does nothing to help matters, as arguments raised there for the first time come too late to be preserved on appeal").

End Footnote 11

First, the plaintiffs argue that Xcentric offered no consideration for the irrevocable nonexclusive license that the District Court ruled Xcentric had been given by DuPont. The plaintiffs thus argue that, in consequence, no valid contract existed that could have conveyed the license to Xcentric. In support of this contention, the plaintiffs point to the website's terms and conditions, which the plaintiffs contend were "subject to change by Xcentric, at any time" and without notice to DuPont, and that "it is undisputed that Xcentric [has redacted information] from posted reports and has removed reports upon the request of the author." The plaintiffs thus argue that the only possible promises that Xcentric made to give something in consideration for the license were "illusory" and, thus, in fact "Xcentric promised nothing" [*22] and, therefore, "gave no consideration."

The problem with this argument, however, is that, even if consideration is necessary in order for a party to grant an irrevocable nonexclusive license, see 3 Nimmer on Copyright § 10.03 (Rev. ed. 2017)(explaining that "consideration is necessary to render a nonexclusive license irrevocable"), performance can itself constitute consideration sufficient to establish a binding contract. And, in this case, the plaintiffs concede that Xcentric did actually post the reports at issue. Thus, given that performance, the plaintiffs offer no authority or persuasive argument as to why there is insufficient consideration for the conveyance of the irrevocable nonexclusive license in this case. See 3 Williston on Contracts § 7:15 (4th ed. 2008) ("[T]hat the purported consideration is invalid will not cause a subsequent performance to be likewise invalid . . . . [A] performance which has been rendered needs no consideration though the promise to give it originally did. Since the performance has been rendered . . . and . . . received as the consideration for the promise, the promise thereby becomes binding.").

Second, the plaintiffs contend that the irrevocable nonexclusive license is unenforceable on public policy grounds. The plaintiffs' argument here is that Xcentric's promise not to remove any postings -- even if the postings are libelous -- is contrary to the public policy "against per se libel." But, while the plaintiffs contend that there is a "strong public policy against per se libel[,]" the plaintiffs offer no basis for concluding that this public policy provides a reason to hold the nonexclusive license itself invalid. The fact that one holds such a license does not in and of itself protect one from liability for libeling another. Furthermore, even assuming that DuPont's postings were per se libelous, no aspect of copyright law protects the holder of such a license from liability for libel, and nothing in the District Court's opinion suggests otherwise. Thus, the plaintiffs' assertion that there is a public policy against per se libel fails to show that this nonexclusive license may not be enforced.

There remains only the other copyright claim to address: the declaratory judgment claim in which the plaintiffs argue the copyright to DuPont's two postings belongs to Small Justice and not to Xcentric. The plaintiffs contend that the District Court erred insofar as it granted summary judgment to Xcentric on the ground that Xcentric had acquired the copyright to each of DuPont's postings.12 But the plaintiffs advance this argument only in connection with their claim that there was no agreement that ever effected a valid transfer of copyright and, thus, that DuPont and not Xcentric "retained ownership of the exclusive rights of copyright to the defamatory postings".13 We thus deemed waived any independent contention that the District Court erred in not issuing a ruling as to whether Small Justice validly holds copyright to DuPont's postings. See United States v. Zannino, 895 F.2d 1, 17 (1st Cir. 1990). And, therefore, we need not consider this issue further.14

Footnotes 12-14

12 In light of the District Court's subsequently appended footnote, it is not clear that the District Court actually issued a ruling as to whether Small Justice, in fact, holds the copyright to DuPont's postings. Rather, the District Court appears to have concluded only that Xcentric is not the copyright holder.

13 The plaintiffs' only request for a declaration of ownership in their amended complaint was a request for a declaration confirming Small Justice's ownership of the copyright to each of the two posts at issue. After the District Court's summary judgment ruling and appended footnote issued, DuPont moved to further amend the complaint to include a request for a declaration that DuPont owned the copyright for each of the postings or, alternatively, a declaration that the nonexclusive license DuPont allegedly granted Xcentric was unenforceable as contrary to public policy. The District Court denied DuPont's motion, as judgment had already entered and DuPont failed to provide an adequate reason for his delay in seeking the amendment, which was prejudicial to Xcentric, "given that the Plaintiffs were aware of the facts underlying their claim when they filed their first two complaints." The plaintiffs did not appeal the denial of the motion to amend.

14 We thus need not address the question of whether the Massachusetts state court decision violated Rule 54(c) of the Massachusetts Rules of Civil Procedure, which requires that "[a] judgment by default shall not be different in kind from . . . that prayed from in the demand for judgment," nor whether that court's judgment transferring DuPont's copyright to Goren pursuant to a default judgment is a valid transfer of copyright under 17 U.S.C. § 201(e). We likewise need not address whether a browsewrap agreement may satisfy the writing requirement in 17 U.S.C. § 204.

Standards of review

In 76 Minn. L. Rev. 507 (1992), Myrna S. Raeder wrote "we should not be surprised that courts often do not distinguish the nature of review for Confrontation Clause challenges or evidentiary issues which raise questions of law from that of discretionary evidentiary rulings."

De novo review of legal issues requires an independent analysis.

Debra Lyn Bassett wrote in38 Hous. L. Rev. 1129 (2001) :

De novo review involves an independent evaluation by the appellate court, according no deference to the lower court's determination. n126 Issues of law are the classic example of matters subject to de novo review. n127 When applying de novo review, "if [p. 1152] the [appellate] court agrees with the trial court decision, it is sustained; otherwise, the lower court decision is reversed." n128

Abuse of discretion review accords significant weight to a trial court's conclusion, without independently ratifying the reasoning. From Nathan R. Christensen, 74 U. Chi. L. Rev. 1309 (2007)

Unlike a de novo standard, abuse of discretion gives significant deference to the trial court's ultimate determination

Bassett had written

Thus, the abuse of discretion standard of review, which accords considerable deference to the decision made at the trial level, leaves the primary responsibility for resolving that matter to the trial court. n134 In contrast, the de novo standard of review, which accords non-deferential, independent review by the appellate court, places primary decision-making authority in the appellate court.

Martha Davis wrote in

applying pure de novo review as a function of the appellate court seems certain to have different results than holding that the legal interpretation by the court below is so egregiously erroneous as to constitute abuse. Obviously, pure de novo review will be the more rigorous and intrusive.

See also Judge Cabranes text in ZERVOS, 252 F.3d 163; 2001 U.S. App. LEXIS 11732.

Wednesday, November 15, 2017

CAFC states TC Heartland changed the law so venue waiver under FRCP 12(g)(2)/12(h)(1)(A) not applicable to "in between" cases; but there is a remand...

Micron won on the 12(g)(2) issue, which gives some guidance to district courts,
BUT the venue matter is not over, so there is still uncertainty in this area:

But that waiver rule [12(g)(2)], we also conclude, is not the only basis on
which a district court might reject a venue defense for
non-merits reasons, such as by determining that the
defense was not timely presented. A less bright-line,
more discretionary framework applies even when Rule
12(g)(2) and hence Rule 12(h)(1)(A) does not. We grant
the petition, vacate the order, and remand for consideration
of forfeiture under that framework.

The CAFC in Micron stated as to FRCP 12(g)(2):

We find this case to present special circumstances justifying
mandamus review of certain basic, unsettled,
recurring legal issues over which there is considerable
litigation producing disparate results. After the Supreme
Court decided TC Heartland, corporate defendants in
many pending patent cases newly presented venue objections
under 28 U.S.C. § 1400(b), asserting lack of residence
in the judicial district where the case was filed. In
many of those cases, the timing of the venue objection
presented a question about waiver under Rule 12(g)(2)
and (h)(1)(A)—in particular, whether TC Heartland
effected a change of controlling law such that the Rule
12(h)(1)(A) waiver rule was inapplicable. The district
courts have deeply split on the answer. All of that is
made clear in the district court’s decision in this case, so
we need not multiply citations. Harvard, 2017 WL
3749419, at *3–4.
Answering the fundamental change-of-law question
regarding the applicability of Rule 12(g)(2) and (h)(1)(A)—
as well as the equally fundamental question whether
those provisions provide the only basis for finding that a
defendant can no longer make a venue objection—is
important to proper judicial administration. Doing so
would reduce the widespread disparities in rulings on the
fundamental legal standards, while leaving the exercise of
such discretion as is available in applying those standards
subject to case-by-case review. In these circumstances,
we think that mandamus is a proper vehicle for considering
the fundamental legal issues presented in this case
and many others.

The meaning of the word "available" arises:

Accordingly, the Rule 12 waiver question presented
here is whether the venue defense was “available” to
Micron in August 2016. We conclude as a matter of law
that it was not. The venue objection was not available
until the Supreme Court decided TC Heartland because,
before then, it would have been improper, given controlling
precedent, for the district court to dismiss or to
transfer for lack of venue.
This is a common-sense interpretation of Rule
12(g)(2). Where controlling law precluded the district
court, at the time of the motion, from adopting a defense
or objection and on that basis granting the motion, it is
natural to say, in this context, that the defense or objection
was not “available” to the movant. The law of precedent
is part of what determines what law controls. The
language “was available” focuses on the time of the motion
in the district court, not some future possibility of
relief on appeal, thus pointing toward how the district
court may permissibly act on the motion at the time—i.e.,
where the motion is for dismissal, whether it can dismiss
the case and thereby avoid wasting resources on continued
litigation. Because what Rule 12(g)(2) addresses is
the omission of a defense or objection from an initial
motion for one of the forms of relief specified in the Rule,
subsection (g)(2) is naturally understood to require the
availability of that relief at the time of the initial motion
(here, dismissal based on improper venue). That understanding
is supported by the purpose of Rule 12(g)(2),
which is to consolidate defenses and to promote early
resolution of such issues. See Fed. R. Civ. P. 12 advisory
committee notes (1966) (“[Rule 12(g)’s] required consolidation
of defenses and objections in a Rule 12 motion is
salutary in that it works against piecemeal consideration
of a case.”); see also id. (“Amended subdivision (h)(1)(A)”
specifies waiver of available defenses not raised in a preanswer
Rule 12 motion because “[a] party who by motion
invites the court to pass upon a threshold defense should
bring forward all the specified defenses he then has and
thus allow the court to do a reasonably complete job.”).


This reading is also supported
by the instruction stated in Federal Rule of Civil Procedure
1—that the Rules “should be construed, administered,
and employed by the court and the parties to secure
the just, speedy, and inexpensive determination of every
action and proceeding.”


No decision of the Supreme Court or a circuit court to
which we have been pointed runs counter to this commonsense
interpretation.3 The rationale for this interpretation,
moreover, is consistent with the general approach,
which is neither rigid nor context-independent, that is
reflected in opinions from the Supreme Court and the
circuit courts in various settings—i.e., a sufficiently sharp
change of law sometimes is a ground for permitting a
party to advance a position that it did not advance earlier
in the proceeding when the law at the time was strongly
enough against that position. See, e.g., Blonder-Tongue
Labs., Inc. v. Univ. of Ill. Found., 402 U.S. 313, 350 (1971)

Of "V.E. Holding":

On the
patent-specific issue of the proper interpretation of 28
U.S.C. § 1400(b), the district court was bound by this
court’s precedent. See In re Cray, 871 F.3d at 1360 (“Federal
Circuit law, rather than regional circuit law, governs
[the] analysis of what § 1400(b) requires.”); see also Foster
v. Hallco Mfg. Co., Inc., 947 F.2d 469, 475 (Fed. Cir.
1991); Panduit Corp. v. All States Plastic Mfg. Co., Inc.,
744 F.2d 1564, 1573 (Fed. Cir. 1984). Circuit-court precedent
is binding on district courts notwithstanding the
mere possibility that the Supreme Court might come to
disapprove that precedent. See Eulitt ex rel. Eulitt v.
Maine, Dep’t of Educ., 386 F.3d 344, 349 (1st Cir. 2004).
It does not appear, indeed, that Harvard disputes those
This court held in V.E. Holding Corp. v. Johnson Gas
Appliance Co., 917 F.2d 1574, 1575 (Fed. Cir. 1990), that
the 1988 amendments to 28 U.S.C. § 1391(c) furnished a
definition of “resides” that applied to § 1400(b). In so
ruling, this court recognized that the Supreme Court had
held in Fourco Glass Co. v. Transmirra Products Corp.,
353 U.S. 222, 229 (1957), that the then-current version of
§ 1391(c) did not apply to § 1400(b); but this court concluded
that the 1988 amendments to § 1391(c)—which of
course were not before the Court in Fourco—produced a
different statutory prescription. V.E. Holding, 917 F.2d
at 1579–80. Under the 1988 version of § 1391(c), a corporate
defendant was “‘deemed to reside in any judicial
district in which it [wa]s subject to personal jurisdiction
at the time the action [wa]s commenced.’” Id. at 1578
(quoting statute). It is undisputed that Micron comes
within that broad definition.


The crucial holding of V.E. Holding was that
§ 1391(c)’s definition of “resides,” after the 1988 amendments,
applied to § 1400(b). On that crucial point, there
is no substantial argument for distinguishing the 2011
amendments to § 1391(c) from the 1988 amendments that
V.E. Holding addressed. Indeed, we so held in In re TC
Heartland LLC, 821 F.3d 1338, 1341–43 (Fed. Cir. 2016),
rev’d on other ground, 137 S. Ct. 1514 (2017), and the
Supreme Court in TC Heartland did not disturb that
Thus, if V.E. Holding is taken as a binding precedent,
§ 1391(c)’s current definition of “resides” applies to
§ 1400(b). It follows that controlling precedent, which the
district court here was bound to follow, would plainly
have barred the district court from adopting a venue
objection had Micron made one before the Supreme Court
decided TC Heartland.


In this case, the district court considered whether to
excuse what it found to be a Rule 12(h)(1)(A) waiver but
did not consider whether Micron lost its right to assert
the absence of venue on grounds separate from Rule
12(h)(1)(A). We remand for the court to consider any such
properly raised non-Rule 12(h)(1)(A) arguments that
Micron has forfeited its venue defense and, if there are no
such sound arguments, to consider the merits of venue
under § 1400(b).

FOOTNOTE: Dennis Crouch at PatentlyO has an interesting take on
"controlling" law:

Although the court [CAFC] is absolutely correct that its approach is the common-sense approach since we have been operating under the old rule for decades. However, the major analytical problem with the court’s decision here is its notion that its misinterpretation of Supreme Court law is somehow “controlling” law. Rather the Supreme Court decided the identical issue in Fourco (1957) and then in TC Heartland (2017) held the minor amendments made to the guiding statutes did not alter the holding of Fourco. In other words, the “controlling law” this entire time has been the Supreme Court precedent. Supreme Court writes:

The issue in this case is whether [the amendment to the statutes] supplants the definition announced in Fourco and allows a plaintiff to bring a patent infringement lawsuit against a corporation in any district in which the corporation is subject to personal jurisdiction. We conclude that the amendments to §1391 did not modify the meaning of §1400(b) as interpreted by Fourco.

Regardless of this technicality, the rule appears now that district courts should be considering and granting improper venue decisions moving forward.

link: https://patentlyo.com/patent/2017/11/heartland-challenges-nullified.html

In passing, the IPBiz post


is related to what Dennis is saying.

Is a district court free to interpret Supreme Court precedent in a way that is completely negated by a holding of the regional circuit?

UPDATE, from DocketReport on 17 Nov 2017:

Omission of Venue Challenge From First Rule 12(b) Motion Precludes Defendant From Invoking Intervening Change of Law to Excuse Waiver
The court denied defendant's motion to dismiss or transfer plaintiff's consolidated patent infringement actions for improper venue because defendant waived its venue defense. "It is well settled that an improper venue defense is waived if it is not included in 'a responsive pleading or in an amendment allowed by Rule 15(a)(1) as a matter of course.' [Defendant's] Motion to Dismiss the Complaint in [the first action] did not raise a defense of improper venue. The defense was therefore waived. . . . Even if the TC Heartland decision was an intervening change in law, the 'omission of improper venue from [a party]⁠'s first 12(b) motion constitutes a "procedural misstep,"' which precludes a party from '"invok[ing] intervening Supreme Court case law" in order to "correct" it.'. . . As to [defendant's] venue challenge in [the second action], [defendant] has already admitted that venue is proper. It may not now 'take back' this admission or otherwise seek to avoid its effects."
Nichia Corporation v. VIZIO, Inc., 2-16-cv-01453 (TXED November 15, 2017, Order) (Gilstrap, USDJ)

link" http://docketreport.blogspot.com/2017/11/omission-of-venue-challenge-from-first.html


Tuesday, November 14, 2017

New York Times mentions "pop-culture plagiarism"

From the New York Times:

“Future Man,” a softhearted, foul-mouthed, highly self-aware science-fiction spoof that glories in pop-culture plagiarism. When the unlikely hero is apprised of the show’s premise, he rolls his eyes and says: “That’s ‘The Last Starfighter.’ It’s the exact same plot as the movie.” Further resonances, in the seven episodes available for review, include “Minority Report,” “Animal House,” “War Games” and a lot of “Terminator.” (Also “Top Chef.”)

In case your memory doesn’t stretch back to the 1984 “Last Starfighter,” “Future Man” stars Josh Hutcherson (himself a reference to “The Hunger Games”) as a janitor named Josh who lives with his parents and distracts himself from his millennial malaise by obsessively playing a violent, futuristic video game. When he finally unlocks the last level, two of the game’s characters, Tiger and Wolf (Eliza Coupe and Derek Wilson), appear in his bedroom and tell him that the game was a test sent back from the post-apocalyptic future to find humanity’s savior.


But the central joke — that the initially hapless Josh is not at all what the future was hoping to find — is a good one, and it keeps paying off. “Aren’t people playing video games supposed to embody the skills of their online personas?” an exasperated Tiger asks. “No,” Josh replies. “it’s the complete opposite.”

link: https://www.nytimes.com/2017/11/14/arts/television/future-man-hulu-review.html

**Separately, an interesting spin on copying without attribution from the legal sector

Case A, discussing standards of review, makes an inaccurate analysis of text in a
US Supreme Court case

Case B identically copies the paragraph from Case A, but does not cite case A, making it look
like the court originated the thought

The court of Case B later cites case A in case C but makes no mention of the Supreme Court case

Apotex wins at CAFC in case related to pegfilgrastim (Neulasta®) and filgrastim (Neupogen®).

The two suits were consolidated. The district court
held a bench trial in July 2016, and it issued findings of
fact and conclusions of law on September 6, 2016. The
court found that Amgen had failed to prove that Apotex’s
proposed commercial marketing of the two products,
pursuant to Apotex’s applications, would infringe the ’138
patent, either literally or under the doctrine of equivalents.

Amgen appeals. We have jurisdiction under 28 U.S.C.
§ 1295(a)(1). We affirm.

Of evidentiary issues:

We do not question the general legal principle that
Amgen asserts: we agree that a district court cannot
ignore letters sent during the BPCIA’s information exchange
if properly offered into evidence. Indeed, the prelitigation
information exchange is part of the BPCIA’s
“carefully calibrated scheme for preparing to adjudicate,
and then adjudicating, claims of infringement.” Sandoz
Inc. v. Amgen Inc., 137 S. Ct. 1664, 1670 (2017). The
purpose of the exchange is “to identify relevant patents
and to flesh out the legal arguments that the[] [parties]
might raise in future litigation.” Id. at 1671. Through
the information exchange, the BPCIA seeks to facilitate
the efficient resolution of patent disputes. The statements
in the pre-litigation letters are party admissions
and therefore have some probative weight. The district
court’s statement that the letters “are not probative on
the issue of protein concentration,” J.A. 24 ¶ 39, is therefore
an overstatement to the extent it suggests that the
letters lack probative value as a matter of law.
We read the district court’s statement in context,
however, to mean only that the letters are not sufficiently
probative to outweigh other evidence presented at trial
indicating that the information in the letters was inaccurate.
Indeed, the district court did not ignore the prelitigation
letters. Rather, it first concluded that the
letters were not binding on Apotex, a conclusion that
Amgen does not dispute, and it then found that the letters
lacked probative value in light of the other evidence
presented at trial. Thus, the court gave the letters their
evidentiary due. We do not believe that the court’s phrasing
reflects an error in the approach it actually took to
reach its findings or calls the court’s ultimate conclusion
into question.
The letters do not render the finding of fact regarding
the protein concentration clearly erroneous. The district
court found that the letters were “not probative on the
issue of protein concentration” because they were “factually
incorrect,” J.A. 24, and it had a sufficient basis in the
evidence to make that finding.

The Sunovion case is discussed:

Amgen argues that the district court’s noninfringement
finding rests on too restrictive a view of
Apotex’s FDA applications. It challenges that view as
contrary to this court’s decision in a Hatch-Waxman Act
case, Sunovion Pharm., Inc. v. Teva Pharm. USA, Inc.,
731 F.3d 1271 (Fed. Cir. 2013), under which, Amgen
argues, the district court here was required to assess
infringement based on the full range of processes that
would be consistent with Apotex’s applications. Apotex
does not challenge the importation of Sunovion’s analysis
into the BPCIA context, but it does dispute Sunovion’s
applicability to the facts of this case. We agree with
Sunovion involved an abbreviated new drug application
that, on its face, authorized the applicant to engage
in actions that would, in fact, infringe the patent in
question. Sunovion, 731 F.3d at 1274–75. The district
court had granted summary judgment of noninfringement
because the defendant had “certified” that it
did not actually intend to run its process in an infringing
manner and presented evidence of internal manufacturing
guidelines showing non-infringement. Id. This court
reversed, reasoning that internal guidelines and a certification
were insufficient to avoid a finding of infringement
when the application itself authorized the activity that
would infringe. Id. at 1280.

Here, in contrast, the district court had a sufficient
basis for reading Apotex’s applications as not authorizing
processes that infringe, indeed, as constraining the processes
to non-infringing levels. The district court credited
the testimony of Dr. Dowd, based on the numbers in the
applications, that the maximum protein concentration
possible in the refold mixtures of Apotex’s applications is
0.708 g/L. J.A. 3618–20. Dr. Dowd arrived at this calculation
using the high-end of the “key process parameter”
range for solubilized inclusion bodies, 11.8 mg/mL, and
the minimum 75 percent purity of the target protein (i.e.,
filgrastim or pegfilgrastim) specified by the applications.
Amgen argues that the key process parameters do not
prevent Apotex from infringing the ’138 patent because
they are not absolute limits. But the applications indicate
that close adherence to the key process parameters is
critical to the function of the process. J.A. 6725 (noting
that key process parameters must be “carefully controlled
within a narrow range and are essential for process
performance”); J.A. 6728 (identifying the 11.8 mg/ml
figure as a “qualified upper limit”). Consistent with this
description, Dr. Dowd testified at trial that Apotex needs
to maintain its process within the key process parameters
in order “for the batch to be acceptable,” and that, if those
ranges are exceeded, “the batch would be thrown out.”
J.A. 3622–23. The district court found this testimony
credible. J.A. 26. In light of the evidence, we see no basis
for deeming the district court’s finding as to the constraints
in Apotex’s applications to be clearly erroneous.

Saturday, November 11, 2017

CAFC affirms D. Del. in Sanofi v. Watson related to generic Multaq®

The outcome in Sanofi v. Watson:

After a three-day bench trial, the district court ruled
in crucial respects for Sanofi. Sanofi v. Glenmark Pharm.
Inc., USA, 204 F. Supp. 3d 665, 704–705 (D. Del. 2016).
As to the ’167 patent, the court made the following rulings
of relevance here: Sanofi proved that Watson’s and
Sandoz’s sale of their proposed generic drugs, with their
proposed labels, would induce physicians to infringe all
but one of the asserted claims, id. at 673–84; and Watson
and Sandoz did not prove that any of the asserted claims
were invalid for obviousness, id. at 685–96. As to the ’800
patent, the district court, rejecting the non-infringement
argument made by Watson and Sandoz, concluded that
the asserted claims do not exclude compositions contain-
ing polysorbate surfactants. Id. at 699–704. The district
court then entered a final judgment rejecting the obvious-
ness challenge to claims 1–6, 8–13, and 16 of the ’167
patent; finding inducement of infringement, by both
defendants, of all of those claims except claim 5; and
finding infringement by both defendants of claims 1–3, 5-
9, and 12–15 of the ’800 patent and by Watson of claims
10 and 11 as well.

Watson and Sandoz appeal. We have jurisdiction un-
der 28 U.S.C. § 1295(a)(1). We affirm.

The issues presented to the CAFC:

Watson and Sandoz challenge the district court’s in-
ducement finding as to the ’167 patent, the district court’s
rejection of their obviousness challenge to that patent,
and the district court’s rejection of their prosecution-
disclaimer argument for limiting the scope of the ’800
patent claims.

As to inducement:

The dispute in this case involves an aspect of the con-
nection between the marketing and the medical providers’
infringement that is different from the two knowledge
requirements and is inherent in the word “induce” as it
has been understood in this area. The Supreme Court
stated the following in Global-Tech:
The term “induce” means “[t]o lead on; to influ-
ence; to prevail on; to move by persuasion or in-
fluence.” Webster’s New International Dictionary
1269 (2d ed. 1945). The addition of the adverb ‘ac-
tively’ suggests that the inducement must involve
the taking of affirmative steps to bring about the
desired result, see id., at 27.
563 U.S. at 760 (brackets in original). The purposeful-
causation connotation of that language is reinforced by
the Court’s statement: “When a person actively induces
another to take some action, the inducer obviously knows
the action that he or she wishes to bring about.” Id.


When proof of intent to encourage de-
pends on the label accompanying the marketing of a drug,
“[t]he label must encourage, recommend, or promote
infringement.” Takeda Pharm. USA, Inc. v. West-Ward
Pharm. Corp., 785 F.3d 625, 631 (Fed. Cir. 2015) (cita-
tions omitted).


We review the district court’s finding of inducement
based on encouragement and inferred intent for clear
error. See AstraZeneca LP v. Apotex, Inc., 633 F.3d 1042,
1056 (Fed. Cir. 2010). We find no such error. The label
itself has a short “Indications and Usage” section, one
sentence long. It states what dronedarone is indicated
for: it “is indicated to reduce the risk of hospitalization for
atrial fibrillation.” J.A. 7609; see J.A. 7784.


Watson and Sandoz contend that, because Multaq®
has substantial noninfringing uses not forbidden by the
proposed labels, Sanofi, 204 F. Supp. 3d at 684, the dis-
trict court could not permissibly find intent to encourage
an infringing use. But there is no legal or logical basis for
the suggested limitation on inducement. Section 271(b),
on inducement, does not contain the “substantial nonin-
fringing use” restriction of section 271(c), on contributory
infringement. And the core holding of Grokster, a copy-
right decision that drew expressly on patent and other
inducement law, is precisely that a person can be liable
for inducing an infringing use of a product even if the
product has substantial noninfringing uses (like the peer-
to-peer software product at issue there, which was capa-
ble of infringing and non-infringing uses). 545 U.S. at
934–37. There is no basis for a different inducement rule
for drug labels.

As to obviousness:

Watson and Sandoz accept the legal framework under
which they had to establish that, as of February 2008, a
person of ordinary skill in the art would have had a
reasonable expectation that the processes claimed would
succeed in their (claimed) aims, a factual issue. Cumber-
land Pharm. Inc. v. Mylan Institutional LLC, 846 F.3d
1213, 1221–23 (Fed. Cir. 2017); PharmaStem Therapeu-
tics, Inc. v. ViaCell, Inc., 491 F.3d 1342, 1360 (Fed. Cir.
2007). On appeal, Watson and Sandoz make no argument
as to obviousness independent of their challenge to the
district court’s finding of no such expectation. We reject
the contention that the district court adopted an incorrect
legal standard on the issue, and we are unpersuaded that
the district court was clearly erroneous in determining
that Watson and Sandoz failed to prove the required
reasonable expectation. Based on those conclusions, we
affirm the nonobviousness judgment.


Watson and Sandoz’s appeal on obviousness thus ul-
timately rests on the contention that the district court’s
finding under the standard was clearly erroneous. We
conclude that it was not. Although the evidence might
well have supported the opposite finding, we cannot
conclude that the district court clearly erred in its finding
that Watson and Sandoz did not carry their burden of
showing that a person of ordinary skill in the art in
February 2008 would have had a reasonable expectation
that dronedarone would succeed in reducing cardiovascu-
lar hospitalization in the ATHENA patient population.


district court credited Dr. Reiffel’s testimony, explaining
why. Sanofi, 204 F. Supp. 3d at 692–95. We have been
furnished no basis on which to say, in light of the other
evidence in the case, that the district court clearly erred
in doing so. See Senju Pharm. Co. v. Lupin Ltd., 780 F.3d
1337, 1351 (Fed. Cir. 2015) (stressing need for exceptional
evidentiary reasons for appellate court not to defer to trial
court’s determination to credit expert testimony about
what prior art taught). This is not a case like Phar-
maStem, in which the expert testimony about prior-art
references was rejected because the testimony could not
“be reconciled with statements made by the inventors in
the [patent] specification and with the prior art references
491 F.3d at 1361; id. at 1361–63.