Saturday, June 25, 2011

Email fails as evidence of conception in Creative Compounds v. Starmark

The patents in the case relate to creatine formulations that
increase the bioavailability of creatine. Starmark had the '373;
Creative the '273.

Of the "interference" angle in the case:

Creative argues that the district court applied the wrong
burden of proof for Creative to establish invalidity of
Starmark’s patent. Relying on Environ Products, Inc. v.
Furon Co., 215 F.3d 1261 (Fed. Cir. 2000) and Slip Track
Systems, Inc. v. Metal-Lite, Inc., 304 F.3d 1256 (Fed. Cir.
2002), Creative argues “[t]he correct standard of proof of
priority of invention, as between co-pending interfering
patents, is the preponderance of the evidence, the junior
party bearing the burden of pleading and proving prior-
ity.” Environ, 215 F.3d at 1266. Because the ’373 Patent
and ’273 Patent were co-pending and Creative alleges
that there is no patentable distinction between claim 1 of
the ’273 Patent and claim 3 of the ’373 Patent, Creative
claims it was entitled to a preponderance of the evidence
standard for proving invalidity of the ’373 Patent.

Starmark responds that the district court applied the
proper standard of clear and convincing evidence. Accord-
ing to Starmark, Environ and Slip Track are distinguish-
able from this case because both cases involved either an
action predicated upon 35 U.S.C. § 291 or a judicial de-
lineation of conflicting subject matter. See Eli Lilly & Co.
v. Aradigm Corp., 376 F.3d 1352, 1367 (Fed. Cir. 2004).
In this case, Starmark asserts that the parties never
stipulated to the common claimed subject matter, that
Creative did not present evidence of common claimed
subject matter, and that Creative did not plead a count
under § 291. Creative “must surmount the clear and
convincing burden of proof to demonstrate priority.” Id.
Finally, Starmark notes that the district court stated that
even if it erred in not applying the preponderance stan-
dard, “any error could not have ‘changed the result.’”
Order at 4, Creative Compounds, LLC v. Starmark Labs.,
Inc., No. 07-22814 (S.D. Fla. Aug. 31, 2010), ECF No. 187
(citing Environ, 215 F.3d at 1267).

This court agrees with Starmark.

Yes, there was reference to i4i:

This court has long
held that because “[u]nder 35 U.S.C. § 282, each claim of
a patent shall be presumed valid[,] an accused infringer
must prove invalidity by clear and convincing evidence.”
Tokai Corp. v. Easton Enters., 632 F.3d 1358, 1367 (Fed.
Cir. 2011) (citing Metabolite Labs., Inc. v. Lab. Corp. of
Am. Holdings, 370 F.3d 1354, 1365 (Fed. Cir. 2004)); see
also Microsoft Corp. v. i4i Ltd. P’Ship, 564 U.S. ___, slip
op. at 19 (June 9, 2011) (“For nearly 30 years, the Federal Circuit
has interpreted § 282 as we do today.”).


See Eli Lilly, 376 F.3d at 1367 (stating
“Environ Products prevents form from triumphing over
substance in priority contests embedded in infringement
proceedings, provided that the parties have stipulated to
a definition of the interfering subject matter.”). Creative
faces the same presumption of validity faced by all ac-
cused infringers and must prove invalidity by clear and
convincing evidence. The district court did not err in
holding Creative to the clear and convincing standard.
Having determined the proper standard, this court will now
address the merits of Creative’s invalidity allegation.

**Of 102(g)

Creative contends that the ’373 Patent is invalid un-
der § 102(g)(2) because of Creative’s prior invention.
Creative alleges that Cornelius, named inventor on the
’273 Patent, conceived the subject matter of the ’373
Patent prior to Boldt, named inventor of the ’373 Patent.
For support, Creative points to an email order for “di-
creatine malate” placed with Creative’s Chinese supplier
as evidence of prior conception. This email, which also
speculates that the method of making dicreatine malate
should be the same as the method of making creatine
citrate, predates the filing date of the provisional applica-
tion that led to the ’373 Patent. Creative further alleges
that Cornelius was diligent through his constructive
reduction to practice, when he and co-inventorfiled the application
leading to the ’273 Patent.

**Of conception

To establish prior invention, Creative was required to
prove prior conception. “Conception is the formation in
the mind of the inventor of a definite and permanent idea
of the complete and operative invention, as it is therefore
to be applied in practice.” Singh v. Brake, 317 F.3d 1334,
1340 (Fed. Cir. 2003). An idea is sufficiently definite for
conception “when the inventor has a specific, settled idea,
a particular solution to the problem at hand, not just a
general goal or research plan he hopes to pursue.”
Burroughs Wellcome Co. v. Barr Labs., 40 F.3d 1223, 1228
(Fed. Cir. 1994). “Conception requires (1) the idea of the
structure of the chemical compound, and (2) possession of
an operative method of making it.” Oka v. Youssefyeh,
849 F.2d 581, 583 (Fed. Cir. 1988). “When, as is often the
case, a method of making a compound with conventional
techniques is a matter of routine knowledge among those
skilled in the art, a compound has been deemed to have
been conceived when it was described, and the question of
whether the conceiver was in possession of a method of making it is simply not raised.” Id.

Here, Creative relied on the 2001 email order for “di-
creatine malate” and simply concluded that this suffi-
ciently demonstrated conception of that compound. In
this email, Cornelius speculates that the method of mak-
ing dicreatine malate “should” be like that of making
creatine citrate. The district court concluded, and this
court agrees, that this email is insufficient to establish
prior conception of the subject matter of the ’373 Patent.
Creative failed to submit testimony explaining the signifi-
cance of this email and whether this reference would
constitute conception of subject matter within the scope of
even a single claim in the ’373 Patent. Moreover, the
email fails to reveal knowledge of a process for making
dicreatine malate and, to the contrary, merely speculates
that the process “should” be like that for creatine citrate.
The email far from establishes that Cornelius actually
possessed an operative method of making dicreatine

Conclusory statements don't work:

Creative’s evidentiary shortcom-
ings are not overcome by its reliance on attorney argu-
ment. “It is well established that conclusory statements
of counsel or a witness that a patent is invalid do not
raise a genuine issue of material fact.” Biotec Biologische
Naturverpackungen GmBH v. Biocorp, Inc., 249 F.3d 1341, 1353 (Fed. Cir. 2001).

Of 102(f)

Creative next alleges that the ’373 Patent is invalid
under § 102(f) because Starmark derived the invention
from Cornelius. In order to establish derivation, Creative
was required to “prove both prior conception of the inven-
tion by another and communication of that conception to
the patentee.” Eaton Corp. v. Rockwell Int’l Corp., 323
F.3d 1332, 1334 (Fed. Cir. 2003). As stated above, Crea-
tive failed to raise a genuine issue of material fact con-
cerning Cornelius’s prior conception. Furthermore, as the
district court found, Creative failed to present any record
evidence supporting any communication or that the
alleged communicator actually knew of the claimed sub-
ject matter. Creative’s only evidence on this issue was the
uncorroborated deposition testimony of Cornelius himself.
“[T]he case law is unequivocal that an inventor’s testi-
mony respecting the facts surrounding a claim of deriva-
tion or priority of invention cannot, standing alone, rise to
the level of clear and convincing proof.” Price v. Symsek,
988 F.2d 1187, 1194 (Fed. Cir. 1993).

As to 102(e)

Again, Creative
failed to provide any testimony from one skilled in the art
identifying each claim element and explaining how each
claim element is disclosed in the prior art reference. See
Schumer, 308 F.3d at 1315. “It is not the trial judge’s
burden to search through lengthy technologic documents
for possible evidence.” Id. at 1353. Conclusory state-
ments simply mentioning the alleged prior art patent,
relying on the same prior art considered by the PTO, and
alleging invalidity fail to raise a genuine issue of material
fact. See id. at 1354 (finding that merely mentioning an
allegedly invalidating, yet otherwise unexplained, prior
art reference is insufficient to survive a summary judg-
ment of no invalidity); see also Tokai, 632 F.3d at 1367
(“[A]lthough the standard of proof does not depart from
that of clear and convincing evidence, a party challenging
validity shoulders an enhanced burden if the invalidity
argument relies on the same prior art considered during
examination by the [PTO]”).

A JPTOS article is cited on infringement:

Because the accused infringer is in a far better position to
determine the actual manufacturing process than the
patentee, fairness dictates that the accused, likely the
only party able to obtain this information, reveal this
process or face the presumption of infringement. Jeffrey
I.D. Lewis & Art C. Cody, Unscrambling the Egg: Pre-Suit
Infringement Investigations of Process and Method Pat-
ents, 84 J. Pat. & Trademark Off. Soc’y 5, 22-23 (2002).

Letters of counsel to the industry came up:

The district court denied Creative’s motion to dismiss
Starmark’s declaratory judgment counterclaim of invalid-
ity of the ’273 Patent for lack of subject matter jurisdic-
tion. The district court analyzed several letters sent by
Creative to the industry. See Lawrence v. Dunbar, 919
F.2d 1525, 1529 (11th Cir. 1990) (holding that, in address-
ing a factual attack to jurisdiction, the court may consider
evidence outside the pleadings and is “free to weigh the
evidence and satisfy itself as to the existence of its power
to hear the case”). These letters contained a separate
letter from Creative’s patent counsel opining that the ’373
Patent was invalid in light of the ’273 Patent and
Haynes’s prior work. The district court concluded that
“the dispute regarding . . . the competing ’273 and ’373
patents runs with the patents. As the ’373 Patent is now
held by Starmark, the dispute is between Creative and Starmark.”


In the absence of a substantial controversy between
the parties concerning an adverse legal interest, the
district court lacked declaratory judgment jurisdiction of
the ’273 Patent. Accordingly, the district court’s determi-
nation of jurisdiction is reversed, and its grant of sum-
mary judgment of invalidity of the ’273 Patent is vacated.


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