Friday, November 07, 2014

CAFC reverses ED Texas on claim construction in Azure v. CSR

In the case Gevo v. Butamax, there was a situation of stipulated infringement under a district court claim construction, followed by an appeal to the CAFC of the claim construction, wherein the district court was reversed.

In Azure v. CSR , we have:

The district court also construed the term “MAC ad-
dress” in the ’129 patent as “a device identifier generated
by the hub device” and not, as Azure and Tri-County
suggested, “an address that uniquely identifies a device or
group of devices on a shared communication medium.”
Azure stipulated to a judgment of noninfringement under
the district court’s construction of “MAC address.”
Because the district court improperly construed the term,
we vacate the judgment of noninfringement and remand.

Stipulating to a district court decision to make an appeal of claim construction is nothing new. This happened in a Gevo v. Butamax case, wherein Butamax stipulated to infringement and then one a reversal of the claim construction at the CAFC (related to an NADH / NADPH matter) But BiofuelsDigest likened this stipulation procedure to what happened in Teva v. Sandoz, wherein there was no stipulation for the purposes of seeking an appeal. From the BiofuelsDigest post
Back in My Arms Again: The Supremes take on patent law in the era of synthetic biology:

The Teva and the Gevo cases — perhaps we should just call it the Geva case, or Tevo — concern patent infringement. In each case, after laborious argument, a District Court makes what is known as a “claim construction” to construe a patent. Then it rules, based on that construction, as to whether infringement has occurred.

In both the Gevo and Teva cases, however, something unexpected happened. After getting a favorable ruling on claim construction and winning at the first level, both companies saw their victories overturned in the Court of Appeals.

Now, what’s unusual about that?

In both the Gevo and Teva cases, the Courts of Appeal employed a controversial practice — what is known as a “de novo” review of the claim construction, and reversed the claim construction on appeal.

Also related to BiofuelsDigest, the Digest (editor and publisher Jim Lane) had made an argument to the effect that, if two companies were fighting over some intellectual property, the fight itself proved the value of the intellectual property:

No one is suing anyone over, say, Cello’s technology, or to gain control of the Range Fuels process. At least not a positive suit aimed at gaining freedom to operate.

For the same reason, you never see a Western where two old prospectors duel it out over a worthless piece of land. In films like Treasure of the Sierra Madre, the fight is invariably over the gold, the map that marks the gold, or the entrance to the mine that guards the gold.

The mounting mountains of paper should be properly seen as a leading indicator of just how valuable a bio-based process to generate low-cost isobutanol from biomass can be, especially if you have figured out the engineering of separating the alcohol from the broth before it kills the microorganism.

IPBiz had noted in 2012:

As a double-layered counter-example, contemplate the fight over COX-2 inhibitors brought by the University of Rochester against (initially) Searle. The suit was brought the day URochester's patent issued, and ended with the URochester patent being found invalid, on summary judgment. Rumor has it UR spent over $10 million. Big dollars, yes; valuable to URochester, no! But, that's not all folks, this area is COX-2 inhibitors, which turned out to be rather bad for some people taking them, and thus not a big pharma gold mine. Ask Merck about that. Nobody mistakes this story for the Treasure of the Sierra Madre. [And, remember, in the movie, the gold blew away.] In summary, in COX-2, there was no gold, and we had two old prospectors dueling it out over a worthless piece of land. For another saga, think also about the "Dolly the Sheep" patent estate.

Biofuels Digest on the Gevo / Butamax patent war on bio-isobutanol

Of relevance to the 2012 IPBiz post is news on Nov. 6, 2014 about the stroke risk associated with COX-2 inhibitors, reported in the story COX-2 inhibitors linked to increased risk of stroke death , wherein a paper in the journal Neurology found

The study shows that people who were current users of COX-2 inhibitors were 19% more likely to die after a stroke than people who did not use COX-2 inhibitors. New users were found to be 42% more likely to die from stroke, compared with non-users.

Although this study about the bad effects of COX-2 inhibitors is reported in 2014, a study available at the time of release of the Merck/Searle products also implicated stroke risks.

And, as to an investment by a big company proving value, ask Exxon about the 1 billion dollars invested in Reliance.

**Returning to the Azure case, there were other legal issues.

“To determine whether an exclusive license is tanta-
mount to an assignment, we ‘must ascertain the intention
of the parties [to the license agreement] and examine the
substance of what was granted.’”
Mann, 604 F.3d at 1359(quoting
Mentor H/S, Inc. v. Med. Device Alliance, Inc.,
240 F.3d 1016, 1017 (Fed. Cir. 2001))
It is not uncommon for
a licensor to transfer to its li-
censee the exclusive right to enforce the patent. But
significant to this case, Tri-County
reserved no right to have control over, to veto, or to
be notified of any of Az-
ure’s licensing or litigation activities .

As to claim interpretation

Departure from the ordinary and customary meaning is permissible only when the
patentee has acted as his own lexicographer or disavowed
claim scope in the specification or during the prosecution
history. Phillips v. AWH Corp. , 415 F.3d 1303, 1316 (Fed.
Cir. 2005) (en banc). (...)

The specification refers to the phrase
“Media Access (MAC) address,” and not “Media Access
Control (MAC) address.”
Based on this single reference, the
district court concluded that the patent
ee “coin[ed] a new term” distinct from a standard MAC address,
which in turn was limited to hub - generated addresses.
Azure , 2013 WL 173788, at *4.
We disagree. For a patentee to act as
his own lexicographer and give a term something other
than its well-established
meaning, he must “clearly set
forth a definition of the disputed term
.” CCS Fitness, Inc.
v. Brunswick Corp., 288 F.3d 1359, 1366 (Fed.
The lexicography must appear with “reasonable clarity,
deliberateness, and precision sufficient to narrow the
definition of the claim term in the manner urged.”
AbbottLabs. v. Syntron Bioresearch, Inc.
, 334 F.3d 1343, 1355(Fed. Cir. 2003).

Judge Mayer dissented on the claim interpretation portion of the opinion.


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