Friday, July 28, 2017

Earnhardt trademark case

In the outcome, the CAFC vacated a decision of the Trademark Board:

This case arises from Kerry Earnhardt, Inc.’s (KEI)
trademark application with the U.S. Patent and Trademark
Office (PTO) to register the mark EARNHARDT
COLLECTION for “furniture” in class 20 and “custom
construction of homes” in class 37. Teresa Earnhardt
opposed registration based on an asserted likelihood of
confusion with her registered marks in DALE
EARNHARDT for goods and services in various classes
and her common law rights in EARNHARDT and DALE
EARNHARDT acquired by use with various goods and
services. She also opposed registration because in her
view EARNHARDT COLLECTION is “primarily merely a
surname” under Section 2(e)(4) of the Lanham Act. 15
U.S.C. § 1052(e)(4) (2012). The Trademark Trial and
Appeal Board (Board) dismissed Teresa Earnhardt’s
opposition because it found that there was no likelihood of
confusion between EARNHARDT COLLECTION and
Teresa Earnhardt’s marks, and it found that
EARNHARDT COLLECTION is not primarily merely a
surname. J.A. 38. Teresa Earnhardt appeals the Board’s
finding that EARNHARDT COLLECTION is not primarily
merely a surname. Because it is unclear whether the
Board’s analysis properly applied our decision in In re
Hutchinson Technology Inc., 852 F.2d 552, 554 (Fed. Cir.
1988), we vacate and remand for reconsideration.

An issue

A mark is primarily merely a surname if the surname
“is the primary significance of the mark as a whole to the
purchasing public.” Hutchinson, 852 F.2d at 554. Because
EARNHARDT COLLECTION is a combination of
two terms, the PTO must consider the mark “in its entirety”
rather than merely “consider[ing] the mark as two
separate parts.” Id. Thus, to evaluate whether the commercial
impression of a mark that combines a surname
with a second term is still primarily merely the surname,
the PTO must determine whether the primary significance
of the mark as a whole in connection with the
recited goods and services is that of the surname. Id. A
key element in such an inquiry is determining the relative
distinctiveness of the second term in the mark. Id. at

“Marks are often classified in categories of generally
increasing distinctiveness . . . they may be (1) generic;
(2) descriptive; (3) suggestive; (4) arbitrary; or
(5) fanciful.” Two Pesos, 505 U.S. at 768. “The latter
three categories of marks, because their intrinsic nature
serves to identify a particular source of a product, are
deemed inherently distinctive and are entitled to protection.”


Here, we agree with the parties that the Board had to
determine whether the addition of the term “collection” to
the mark EARNHARDT COLLECTION altered the
primary significance of the mark as a whole to the purchasing
public, and that, in view of Hutchinson, part of
this inquiry includes determining whether “collection” is
merely descriptive of KEI’s goods and services. But we
cannot address the parties’ arguments as to whether
“collection” is merely descriptive of KEI’s goods and
services because the Board’s opinion leaves us uncertain
as to its findings on this issue. See, e.g., Pers. Web Techs.,
LLC v. Apple, Inc., 848 F.3d 987, 992 (Fed. Cir. 2017)
(describing the “basic principles of administrative law”
governing the PTAB’s obligation to explain itself).

Thursday, July 27, 2017

Regeneron loses at CAFC on inequitable conduct

The CAFC affirmed inequitable conduct in Regeneron v. Merus,
2017 U.S. App. LEXIS 13578:

Regeneron Pharmaceuticals, Inc. (“Regeneron”) appeals from a final judgment of the district court holding U.S. Patent No. 8,502,018 (“’018 patent”) unenforceable because of Regeneron’s inequitable conduct during prosecution. Regeneron also appeals the district court’s construction of several claim terms and determination of indefiniteness. Because we conclude that Regeneron engaged in inequitable conduct during prosecution of the ’018 patent, we affirm.

The subject was antibodies:

Antibodies are proteins that the body uses to counteract specific pathogens such as bacteria, viruses, and other foreign substances in the blood. Antibodies are typically represented by a “Y” shape consisting of four chains of amino acids: two longer “heavy” chains, and two shorter “light” chains. Each of the chains, in turn, consists of two regions: a “variable” region toward the top of the “Y,” and a “constant” region toward the bottom.


Mouse DNA coding for antibodies can be modified using human DNA in various different ways. For example, mouse DNA can be manipulated to create chimeric antibodies that have mouse variable region DNA and human constant region DNA. Similarly, mice can be used to create humanized antibodies that have some mouse variable region DNA, some human variable region DNA, and human constant region DNA.

Of some of the "bad" acts:

Drs. Jones and Smeland together planned an in-person meeting with the Examiner during which they relied on the misleading presentation asserting that Regeneron had developed a commercial embodiment of the claimed mouse. That meeting occurred in March 2013. Following that meeting, in April 2013, the PTO issued a Notice of Allowance for the ’176 application.


Dr. Smeland knew of the third party submission as well as all four Withheld References during prosecution, yet withheld them from the ’018 patent’s examiner. Although Regeneron did not disclose the Withheld References during prosecution of the ’018 patent, once the ’018 patent had been allowed, Regeneron disclosed the Withheld References to the PTO in every related application having the same specification and similar claims. Merus contends that Regeneron’s failure to disclose the Withheld References constituted inequitable conduct. Regeneron responds that Dr. Smeland was under no obligation to disclose these references because they were not but-for material.


Direct evidence of intent is not, however, required. A court may infer intent from circumstantial evidence. Id. An inference of intent to deceive is appropriate where the applicant engages in “a pattern of lack of candor,” including where the applicant repeatedly makes factual representations “contrary to the true information he had in his possession.” Apotex Inc. v. UCB, Inc., 763 F.3d 1354, 1362 (Fed. Cir. 2014).


On appeal, Merus asserts that Drs. Smeland and Murphy violated their duty of candor and engaged in inequitable conduct. Regeneron does not contest that both of these individuals had a duty of candor to the PTO. Regeneron, however, argues that the duty was not violated because none of the Withheld References were but-for material and because the district court improperly concluded that the applicants possessed the necessary specific intent to deceive the PTO.

Claim scope was an important issue:

But Regeneron argues that under the broadest reasonable construction of claim 1, the non-variable (constant) region of the claimed mouse’s modified gene segments exclusively contains mouse genes. In other words, Regeneron argues that claim 1 is limited to a reverse chimeric mouse. Appellant’s Br. 32–35. Merus, on the other hand, argues that the constant region of the gene segments in the claimed mouse may contain mouse genes or human genes, and may, therefore, be reverse chimeric, humanized, or fully human. Appellee’s Br. 51.


But Regeneron points to no portion of the specification to support its argument. In context, it is clear that the endogenously produced antibodies may comprise a human constant region. The specification thus does not limit the claims to mice with human variable regions and mouse constant regions. Accordingly, we disagree with Regeneron and conclude that under the broadest reasonable construction, the district court correctly found that the claims are not limited to mice that solely comprise mouse constant region gene segments.


Under this broadest reasonable construction, the court next determines if the district court clearly erred in finding the Withheld References but-for material and not cumulative of prior art that the PTO considered during prosecution. We conclude that the district court properly found that the Withheld References were but-for material and were not cumulative.

Of an issue by the dissent:

The dissent argues that Wood is not material because it only teaches a “DNA fragment construct” but does not describe “any targeted insertion method described elsewhere in the prior art . . . .” Dissent at 17. As an initial matter, neither party argues this position and the district court did not make this factual finding. See 3M Co. v. Avery Dennison Corp., 673 F.3d 1372, 1378 (Fed. Cir. 2012) (“[I]t is improper for us to determine factual issues in the first instance on appeal . . . finding those facts in the first instance would overstep our bounds as a reviewing court and we cannot resolve the parties’ factual disputes on appeal.”). Regardless, the dissent’s argument is unavailing because the claim at issue does not recite a particular method of inserting DNA into a mouse. The claim simply recites a genetically modified mouse that comprises “human unrearranged variable region gene segments inserted at an endogenous mouse immunoglobulin locus.” Wood teaches that “[t]he animals of this invention are designed by the integration into their germlines of DNA carrying unrearranged or only partially rearranged exogenous Ig gene segments.” J.A. 2127. Wood thus teaches the elements of the claim at issue and is butfor material.

Of importance on intent:

As noted earlier, the district court never held a second trial to determine if Regeneron acted with the specific intent to deceive the PTO during prosecution. Instead, the court sanctioned Regeneron for its litigation misconduct by drawing an adverse inference of specific intent. Contrary to Regeneron’s arguments, we determine that the district court did not abuse its discretion by sanctioning Regeneron in this manner.

Regeneron’s behavior in district court was beset with troubling misconduct. In its November 2015 opinion, the district court extensively detailed Regeneron’s litigation misconduct and exercised its discretion to sanction Regeneron. See Regeneron I, 144 F. Supp. 3d at 585–96. On appeal, Regeneron argues that the district court abused its discretion by sanctioning Regeneron, but does not meaningfully dispute any of the factual findings underlying the district court’s decision. Accordingly, we largely repeat, and adopt, the district court’s factual findings regarding Regeneron’s litigation misconduct below.

Of gaming:

During claim construction, Regeneron again chose tactics over substance. Because Regeneron was the plaintiff, the district court’s rules required that Regeneron first propose its claim constructions, and that the defendant then respond. Regeneron took the position that no terms required construction. The district court issued an order expressing its concern that Regeneron was attempting to “game” the system by shifting the burden to Merus to propose constructions and then to take shots at those proposals. Discovery Order #5, Regeneron Pharm., Inc. v. Merus B.V., No. 14-cv-1650, 2014 WL 3865366, at *1 (S.D.N.Y. July 22, 2014), Dkt. No. 81. To avoid this potential gamesmanship, the district court required Regeneron to live by its plain language constructions. Id. at *2

The dissent by Judge Newman began:

The only issue decided by the panel majority is the district court's ruling of inequitable conduct during patent prosecution.1 I respectfully dissent, for my colleagues apply incorrect law and add confusion to precedent.

Her main arguments:

"Inequitable conduct" arises when material references were intentionally withheld by the patent applicant in order to deceive or mislead the examiner into granting the patent. Both materiality and intent must be proved by clear and convincing evidence. Therasense, Inc. v. Becton, Dickinson & Co., 649 F.3d 1276, 1287 (Fed. Cir. 2011). Intent to deceive cannot be inferred; yet here, the district court inferred intent to deceive during prosecution and invalidated the patent, as a sanction for purported attorney misconduct during this litigation.

The district court found that certain uncited references were "but-for material" to patentability—although the court did not find the '018 patent claims invalid on the substantive content of these references. The district court then declined to decide the question of specific intent to deceive the patent examiner. Instead, the court cancelled the scheduled trial on the question of intent, adopted an "inference" of intent, and held the '018 patent unenforceable on grounds of inequitable conduct as a sanction for Regeneron's "litigation misconduct" relating to discovery and the privilege log during this litigation.

The panel majority acknowledges that "the district court never held a second trial to determine if Regeneron acted with the specific intent to deceive the PTO during prosecution." Maj. Op. at 21. This absence of trial and trial findings on this critical issue cannot be substituted by inference.
Nor is the appellate role to scour the Appendix to fill the gap and make our own appellate finding of "intent to deceive." Here, no evidentiary record was developed on intent to deceive, with no testimony and no opportunity for examination and cross-examination of witnesses. The panel majority instead engages in innuendo based on its careful selections from documents not admitted into evidence. The panel majority thus convicts Regeneron, its counsel, and its scientists, with no trial, no evidence, and no opportunity to respond in their defense.

Materiality does not establish intent; deliberate withholding of but-for invalidating prior art, with the intent to deceive the examiner, must be established by clear and convincing evidence. The majority's mechanism whereby dispositive facts are found for the first time on appeal, with no right of traverse by the affected party, is contrary to fundamental fairness and judicial process. If the panel majority indeed believes that the four "uncited" references are but-for material to patentability, we should at least require trial of the question of intent.

Judge Newman cites cases from 1933 and 1944:

Precedent is long-standing, unambiguous, and binding. In Keystone Driller Co. v. General Excavator Co., 290 U.S. 240, 54 S. Ct. 146, 78 L. Ed. 293, 1934 Dec. Comm'r Pat. 639 (1933), the Court established that litigation misconduct can support the dismissal of the suit, whereas patent invalidity or unenforceability must be established on the law of validity or enforceability. Applying Keystone Driller, in Aptix Corp. v. Quickturn Design Systems, Inc., 269 F.3d 1369 (Fed. Cir. 2001), this court held that:
[T]he remedies for litigation misconduct bar the malfeasant who committed the misconduct. The property right itself remains independent of the conduct of a litigant.
Id. at 1375. This court elaborated:
Leaving the patent right intact, the Supreme Court repeatedly stressed that litigation misconduct bars the litigant. Again in Hazel—Atlas Glass Co. v. Hartford—Empire Co., 322 U.S. 238, 64 S. Ct. 997, 88 L. Ed. 1250, 1944 Dec. Comm'r Pat. 675 (1944), overruled on other grounds by Standard Oil Co. v. United States, 429 U.S. 17, 18, 97 S. Ct. 31, 50 L. Ed. 2d 21 (1976), another instance of extreme litigation misconduct, the Supreme Court "require[d] that Hartford be denied relief," but left the patent right intact. Id. at 251.
Id. We continued to explain that in order to invalidate the patent, the inequitable conduct must have occurred in patent prosecution:
Litigation misconduct, while serving as a basis to dismiss the wrongful litigant, does not infect, or even affect, the original grant of the property right.

Id. We concluded:
No case law from the Supreme Court or this court provides a basis for nullifying property rights granted by the United States when such property rights did not themselves accrue through inequitable conduct.
Id. at 1377.
The Aptix holding has been applied in trial forums across the nation. E.g., Kimberly-Clark Worldwide, Inc. v. First Quality Baby Prods., LLC, 2011 U.S. Dist. LEXIS 21474, 2011 WL 679337, at *6 (E.D. Wis. Feb. 16, 2011) ("[A]lleged litigation misconduct is not sufficient to support a counterclaim of unenforcea-blity of a patent."); MedPointe Healthcare Inc. v. Hi-Tech Pharmacal Co., 380 F. Supp. 2d 457, 467 (D.N.J. 2005) ("[B]ecause the alleged misconduct involved conduct before the court and not before the patent office during the procurement of the patent, it does not taint the property right ab initio to render the patent unenforceable."); Honeywell Int'l, Inc. v. Universal Avionics Sys. Corp., 398 F. Supp. 2d 305, 311 (D. Del. 2005) ("If the wrongdoing occurs during the prosecution of the patent, in the furtherance of obtaining a patent right, then it can render the patent unenforceable. Alternatively, if unclean hands occurs during litigation, it bars any recovery by the offending party.").

Related to claim construction, the dissent notes:

The parties debate several aspects of the broadest reasonable interpretation of claim terms, but neither the district court's nor my colleagues' analysis shows that any "withheld reference" is more material than the cited references. Under the district court's "broadest reasonable interpretation," the '018 claims require a genetically modified mouse, the genes of which have been modified using the particular large targeting vector method described in the specification, by the insertion of human variable region DNA in its germline configuration into or next to the endogenous mouse immunoglobulin locus. Dist. Ct. Op. at 564-67. The "withheld references" indeed relate to genetic modification, but they are not but-for material as compared with the references before the examiner.
The district court does not establish that the allegedly withheld references lead to unpatentability. Instead, the district court states that the references disclose motivations, benefits, and cumulative teachings. [*63] That is correct; but the references do not provide but-for materiality, whether taken alone, or with the cited references.

After the post on IPBiz, there was a lengthy post on PatentDocs, which began

In a decision that took an inordinately long time to arrive (oral argument was held in mid-January), the Federal Circuit in Regeneron Pharmaceuticals v. Merus today affirmed the District Court's decision that the claims of Regeneron's patent-in-suit was unenforceable due to inequitable conduct in its procurement. However, the manner in which the District Court made its determination, and the Federal Circuit's affirmance in a divided opinion (by Chief Judge Prost joined by Judge Wallach, with a dissent by Judge Newman), raise questions regarding the proper implementation of the Court's en banc decision in Therasense, Inc. v. Becton, Dickinson and Co., 649 F.3d 1276 (Fed. Cir. 2011) (en banc) that remain unresolved.


Wednesday, July 26, 2017

Apple crushed by WARF in latest district court ruling

Back in October 2015, the Christian Science Monitor wrote of the WARF/Apple case:

What makes the case unusual was the party that sued: a computer science professor and three graduate students from the University of Wisconsin-Madison.
The university research team, headed by Guri Sohi, filed a patent in 1998 for microchip technology that Apple used in the most recent versions of the iPad and iPhone, a US federal jury ruled on Tuesday. On Friday, the court awarded $234 million in damages.
The ruling is a victory for university researchers, proclaimed the Wisconsin Alumni Research Foundation (WARF), a non-profit that exists primarily to help University of Wisconsin professors with patents.
"This is a case where the hard work of our university researchers and the integrity of patenting and licensing discoveries has prevailed," Carl Gulbrandsen, managing director of WARF, said in a news release. "This decision is great news for the inventors, the University of Wisconsin-Madison, and for WARF."

On July 26, 2017, Fortune reported:

U.S. District Court Judge William Conley on Tuesday ruled that Apple should pay $506 million in damages for allegedly infringing a patent owned by the Wisconsin Alumni Research Foundation (WARF). The judge, whose ruling was earlier reported on by Reuters, added $272 million to a previous $234 million damages tally because the iPhone maker continued to infringe the patent, according to the judge.


July 25 post on Reuters:

In passing, from ABS GLOBAL, INC., 2016 U.S. Dist. LEXIS 96307

Any probative value of the PTAB ruling is far outweighed by the potential for unfair prejudice and risk of jury confusion because the IPR proceeding is subject to different standards, purposes and outcomes than the original prosecution and the court proceeding. ST attempts to distinguish the court's similar ruling in WARF v. Apple based on ABS's assertion of an antitrust claim is unavailing. In particular, ST does not explain how PTAB's decision is somehow more relevant to its defense of ABS's antitrust claim, beyond the general proposition that its patent was not reviewed by PTAB, which is the same ambiguous ruling the court found confusing and unfairly prejudicial in WARF.

**Separately, in another "academic" patent area (CRISPR), UC/Berkeley is pushing forward. From SCIENCE

UC leads a group of litigants who contend that the U.S. Patent Trial and Appeal Board (PTAB) wrongly sided with the Broad Institute in Camrbidge, Massachusetts, and two partners—Harvard University and the Massachusetts Institute of Technology in Cambridge—in February when it ruled that the Broad group invented the use of CRISPR in eukaryotic cells. After that ruling, UC moved the battleground to the U.S. Court of Appeals for the Federal Circuit. In a 25 July brief to the Federal Circuit, the UC group contends that PTAB “ignored key evidence” and “made multiple errors.”


The UC group contends PTAB ignored key decisions on these general questions made by the U.S. Supreme Court and the Federal Circuit. It reiterated its long-held claim that applying CRISPR to eukaryotic cells was so obvious that six different labs did it in the same time frame, which it complains the PTAB “essentially dismissed as ‘irrelevant.’” And its brief notes that patent examiners rejected similar eukaryotic cell CRISPR patent applications from Sigma-Aldrich and ToolGen—filed before the Broad’s patent application—because it made claims that were “non-novel” or obvious in light of UC’s disclosed work.

Jacob Sherkow, an intellectual property attorney at the New York Law School in New York City who has closely followed each round in the fierce battle, says the UC group’s brief at times “overplays these mistakes relative to the PTAB's analysis.” He notes that the PTAB’s decision was “thorough” and the standards to overturn its decisions are high. “While there were some interesting chestnuts in its brief—such as UC pointing out that the PTAB virtually ignored some important patents pending at the time [the Broad] patent was filed—I don't think that's going to be enough to win the day [for] UC,” he says.


CAFC in Soft Gel : An incentive to conduct a confirmatory study frequently exists even when one has every reason to expect success

Of interest:

First, Soft Gel contends that the Khan ’786 patent
teaches that it is difficult to dissolve CoQ10 in lemon oil.
But what the Khan ’786 patent states is that CoQ10 is
difficult to dissolve in aqueous solvents, fixed (nonvolatile)
oils, and triglycerides. Khan ’786 patent, col. 1, ll. 46-47,
55-62; id., col. 6, ll. 57-60. Instead of suggesting the use of
those types of solvents with CoQ10, the Khan ’786 patent
teaches the use of an essential (volatile) oil, such as lemon
oil, peppermint oil, or spearmint oil, as a solvent for
CoQ10. Id., col. 5, ll. 60-61; id., col. 6, ll. 27-31; see also
id., col. 6, ll. 43-45. The Khan ’786 patent merely notes
the difficulty of dissolving CoQ10 in many solvents other
than essential oils such as lemon oil.


For those reasons, Soft Gel has failed to discredit the
Board’s finding that the Khan ’786 patent does not teach
away from the inventions of the Soft Gel patents. More
importantly, Soft Gel’s focused attack on the Khan ’786
patent does not undermine the Board’s decision, which is
based on a combination of references. See In re Merck &
Co., 800 F.2d 1091, 1097 (Fed. Cir. 1986) (in the context of
teaching away, “[n]on-obviousness cannot be established
by attacking references individually where the rejection is
based upon the teachings of a combination of references”).
Read together, the Khan ’786 patent and the Motoyama
reference suggest using the monoterpenes in lemon oil,
peppermint oil, and spearmint oil in conjunction with

Noelle v. Lederman is cited:

In making that argument, Soft Gel applies an incorrect
legal standard for obviousness, requiring “absolute
predictability” rather than “a reasonable expectation of
success.” Noelle v. Lederman, 355 F.3d 1343, 1352 (Fed.
Cir. 2004). It is true that the Khan ’786 patent discloses
lemon oil, not d-limonene. But that does not mean that a
person of skill would not expect d-limonene, the main
constituent of lemon oil
, to work. Dr. Khan may have had
just that expectation in conducting his subsequent research,
in which he investigated whether d-limonene was
responsible for the lemon oil-CoQ10 results. As the Board
correctly noted, “[s]imply because [Dr.] Khan . . . [later]
undertook a study to evaluate limonenes in SNEDDS[]
does not mean that it would not have been obvious [that
limonenes] would have worked to some extent.” A supplemental
study does not imply lack of awareness of the
likely result
; rather, studies are frequently conducted to
confirm what is suspected to be true. An incentive to
conduct a confirmatory study frequently exists even when
one has every reason to expect success. As it happens, Dr.
Khan was successful; his “[r]esults indicated that CoQ[10]
is fairly soluble in [the] monoterpene[] [d]-limonene.”
Palamakula at 78.

Tuesday, July 25, 2017

CAFC vacates PTAB decisions in Netlist v. Diablo

Of note in the Netlist case

Netlist argues the Board’s constructions are wrong
because its analysis is based on a flawed interpretation of
“selectively electrically coupling.” We agree. The specification
uses the terms “coupling” and “isolating” in a
similar fashion. With respect to the ’150 patent, the
Board’s construction of “selectively isolating” seems to be
based on its erroneous construction of “selectively electrically
coupling.” The Board simply changed “making a
selection . . . to transfer power” into “making a selection
. . . and not transferring power.” Because we find the
Board’s analysis of “selectively electrically coupling” was
flawed, we also conclude the Board’s construction of
“selectively isolating/isolate” was erroneous.

AND footnote 1:

There appears to be a typographical error in the
Board’s final written decision for the ’536 patent. This
construction is taken from the Board’s institution decision,
which the Board stated that it intended to adopt for
its final written decision.

CAFC explicates the meaning of the word "over" in Home Semiconductor. PTAB reversed.

In Home Semiconductor v, Samsung [2017 U.S. App. LEXIS 13356 ], appellant Home won a reversal of PTAB:

Home Semiconductor Corp. (“Home”) appeals from the
final written decision of the United States Patent and
Trademark Office Patent Trial and Appeal Board (“the
Board”) in an inter partes review (“IPR”) proceeding
finding that, inter alia, claims 2 and 9–14 of U.S. Patent
6,146,997 (“the ’997 patent”) are unpatentable as anticipated
by U.S. Patent 6,277,720 (“Doshi”). Home Semiconductor
Corp. v. Samsung Elecs. Co., No. IPR2015-
00460, 2016 Pat. App. LEXIS 7424 (P.T.A.B. Apr. 20,
2016) (“Final Decision”). For the reasons that follow, we

[meaning the patentee-appellant, Home, wins.]

At issue was the meaning of the word "over":

This appeal primarily involves the meaning of the
word “over” in the context of the claims, written description,
and figures.

In part, the disagreement:

In its patent owner response, Home argued that "forming an oxide layer over the diffusion region" in claims 2 and 9 should mean "forming an oxide layer covering the diffusion region" in light of the specification. J.A. 499 (emphasis added). Based on its proposed construction, Home argued that Doshi did not anticipate the challenged claims.

In reply, as it had done in its IPR petition, Samsung argued that the broadest reasonable interpretation of "forming an oxide layer over the diffusion region" should be "forming an oxide layer above the diffusion region." J.A. 695-96. Samsung argued that construing "over" as "covering" was too narrow a reading for a person of ordinary skill in the art and that its argument was supported by Becker, which describes gate electrode structures that do not cover the substrate as being "over" the substrate.

Of PTAB's analysis of ONE argument by Samsung:

It is undisputed that the oxidation in Doshi occurs on the sides of the gate electrode, which itself does not verti-cally overlap with the diffusion region and is only aligned on an extended edge above the diffusion region. Regard-less whether the oxidation of the polysilicon 22 in Doshi results in an oxide being formed within the sidewall filament 11, the polysilicon 22, or both, the "oxide layer" in Doshi, which teeters above on the outermost edge of the diffusion region, cannot be understood as an oxide layer formed "over the diffusion region." The Board rejected Home's similar line of argument that the oxide layer in Doshi is "higher but off to the side." Final Decision, 2016 Pat. App. LEXIS 7424, at *33-35. It is difficult to discern the Board's reasoning and analysis in response, but
regardless, we conclude that the Board erred in its antici-pation finding because its claim construction was flawed.
Doshi's "oxide layer" is only "above" the diffusion re-gion in the sense that it is higher in position, but is mere-ly insignificantly overlapping with the diffusion region, and therefore is not "over the diffusion region." "[O]xidizing the sides" of the gate electrode in Doshi is not "forming an oxide layer over the diffusion region"; it is the "layer of silicon nitride" that is "deposited overall" in Doshi. Doshi col. 7 ll. 59-60. Substantial evidence thus does not support the Board's finding [*18] of anticipation be-cause Doshi fails to teach forming an oxide layer over the diffusion region in addition to on the sidewalls of the gate electrode. Because independent claim 9 is not anticipated by Doshi, dependent claims 10-14 are also not anticipated by Doshi.

There was another argument by Samsung, which "fell by the wayside."

Of interest to IPBiz was the argument not addressed by
the Board:

Samsung argues in the alternative that a growth of
the oxide layer in Doshi occurs over, and covers, the
diffusion region. Although argued for by Samsung during
the IPR proceeding
, the Board did not make a specific
finding on whether an oxide layer grows over and covers
the diffusion region. Even if factual findings to that effect
had been made in favor of Samsung, they would only have
been relevant if Samsung had argued that Doshi inherently
teaches the limitation because Samsung had admitted
that Doshi does not expressly disclose an oxide layer
covering the diffusion region. Because such argument
was not squarely before the Board
, and the Board did not
decide on what appears to be an inherency argument, the
issue is not properly before us

Monday, July 24, 2017

Did Heartland open the floodgates to the ITC? Not really.

In a post at The Hill titled Supreme Court fails to close key avenue for patent trolls , MATT TANIELIAN states:

The ITC is unaffected by the TC Heartland case. This matters because, in recent years, the ITC has become a popular venue
to bring patent cases because of its powerful remedies, quick process and perception of having patent-holder-friendly practice
and procedures. As lawyers looking to monetize patents, they will seek the venue that maximizes their leverage post-TC Heartland.
The ITC today is no doubt a more attractive venue than before.

In 2011, long before Heartland, two Finnegan attorneys posted an article on the advantages of the ITC over
district courts, Patent Owners Can More Easily Enjoin Infringers by Using the ITC Rather Than Federal District Courts.

They correctly noted that the rules are different:

The ITC permits a patent owner to enforce its rights against an entity that imports allegedly infringing products in the United States.
And like a U.S. District Court, the ITC also has the power to issue injunctions, called "exclusion orders," to stop infringing products from being imported into the U.S.

There was a question as to whether the standard for injunctive relief at the ITC is the same as that for a U.S. District Court.
And in Spansion v. Int'l Trade Comm'n, Nos. 2009-1460, 1461, 1462, 1465 (Fed. Cir. Dec. 21, 2010),1 the Federal Circuit recently
answered this question in the negative. Specifically, the court held that the statutes applicable to the ITC's grant of an exclusion order
do not require the application of the same standard used by U.S. District Courts to enter injunctions. Moreover, while the ITC is required
to consider certain "public interest" factors, those factors are not the same as those considered by a U.S. District Court.

Patent owners who wish to assert rights against manufacturers or distributors that either import infringing products or
import infringing components to use in products should consider the benefits of filing a complaint in the ITC.
This is especially important for non-practicing entities that do not make or sell products covered by the patents.
There is a lower hurdle to receive injunctive relief because the patent owner need not show irreparable harm and
the public interest inquiry is limited to four enumerated factors. The ITC has found the public interest outweighed
the need for injunctive relief in only three patent investigations. For that reason, patent owners are more likely
to obtain injunctive relief in the ITC, giving them more leverage for license negotiations with potential licensees and infringers.

The advantages, and disadvantages, of the ITC venue existed before Heartland, and were not changed by Heartland.

Link to Finnegan article

Win for Momenta as to 101 and indefiniteness in Lovenox case

Within Momenta v AMPHASTAR , 2017 U.S. Dist. LEXIS 113713 (21 July 2017) , one has

Pending before the Court is Momenta's motion for judgment as a matter of law under Fed. R. Civ. P. 50(a) on Amphastar's affirmative defenses. Pursuant to Fed. R. Civ. P. 50(a) judgment as a matter of law is warranted when

a party has been fully heard on an issue during a jury trial and the court finds that a reasonable jury would not have a legally sufficient evidentiary basis to find for the party on that issue[.]

Fed. R. Civ. P. 50. Because the only reasonable conclusion as to the defenses of 1) patent eligible subject matter and 2) indefiniteness is that they are inapplicable, with respect to those two defenses, the motion will be allowed.

The two-step framework for patentable subject matter is described in Mayo Collaborative Servs. v. Prometheus Labs., Inc., 566 U.S. 66, 132 S. Ct. 1289, 1293, 182 L. Ed. 2d 321 (2012). First, the Court must determine whether the patent claims are "directed" to a patent-ineligible concept, such as a natural law, natural phenomenon or abstract idea. Rapid Litig. Mgmt. Ltd. v. CellzDirect, Inc., 827 F.3d 1042, 1047 (Fed. Cir. 2016) (quoting Mayo, 132 S. Ct. at 1296-97). If the claims are not so directed, they are patentable. Id. If the claims are directed to an ineligible concept, then the Court determines whether the elements of the invention "transform" the claims into an application eligible for a patent. Id. Patent eligibility is a question of law. Id.

Because the '886 patent "[is] directed to a new and useful method" of ensuring the quality of enoxaparin and involves a series of laboratory steps rather than a law of nature or abstract idea, this Court concludes that the asserted claims involve patentable subject matter. See CellzDirect, 827 F.3d at 1048. Therefore, with respect to the affirmative defense that the asserted claims do not involve patent eligible subject matter, Momenta's motion will be allowed.

With respect to the indefiniteness defense, a patent's specification must be sufficiently "definite" so as to include at least one claim that "particularly point[s] out and distinctly claim[s] the subject matter which the applicant regards as [the] invention." 35 U.S.C. § 112 (2002). Pursuant to Nautilus, Inc. v. Biosig Instruments, Inc., 134 S. Ct. 2120, 2124, 189 L. Ed. 2d 37 (2014),

[a] patent is invalid for indefiniteness if its claims, read in light of the specification delineating the patent, and the prosecution history, fail to inform, with reasonable certainty, those skilled in the art about the scope of the invention.

Although "[s]ome modicum of uncertainty" is permissible, the "patent must be precise enough to afford clear notice of what is claimed." Trusted Knight Corp. v. Int'l Bus. Machines Corp., No. 2016-1510, 2017 U.S. App. LEXIS 3979, 2017 WL 899890, at *3 (Fed. Cir. Mar. 7, 2017) (quoting Nautilus, 134 S. Ct. at 2128-29).

When a Court evaluates indefiniteness by examining intrinsic evidence, such as the claims and specifications in the patent, indefiniteness is a question of law. Biosig Instruments, Inc. v. Nautilus, Inc., 783 F.3d 1374, 1378 (Fed. Cir.), cert. denied, 136 S. Ct. 569, 193 L. Ed. 2d 431 (2015).

Amphastar contends that all of the claims are indefinite because they are limited to "the non naturally occurring sugar associated with peak 9 of FIG. 1" and there is no specific "FIG. 1" in the '886 patent. Based on the intrinsic evidence, however, the "Figure 1" in the patent is composed of Fig. 1A and Fig. 1B. The only figure in the patent with peak 9 is FIG. 1A. Moreover, the claims of the patent involve enoxaparin and the Fig. 1A is titled "Lovenox" which is the brand name for enoxaparin. Furthermore, the "Brief Description of the Drawings" in the patent clarifies that FIG. 1A is a "[c]apillary electrophoresis (CE) profile of enoxaparin (Lovenox™)". Therefore, this Court concludes that the patent "afford[s] clear notice of what is claimed." Trusted Knight Corp., 2017 U.S. App. LEXIS 3979, 2017 WL 899890, at *3 (quoting Nautilus, 134 S. Ct. at 2128-29) and, with respect to the infiniteness defense, the motion for judgment as a matter of law with be allowed.

BUT see also

Sunday, July 23, 2017

Who owns copyright in student papers?

A post about VeriCite on Nibletz contains the text:

VeriCite integrates seamlessly with all of the popular learning management systems (LMS) like Moodle, Blackboard and of course Canvas. The students and you, retain ownership of the work turned into VeriCite even if you change LMS providers.

The question of "who owns" copyright in student papers was addressed in 26 Touro L. Rev. 207, titled Do Students Turn Over Their Rights When They Turn in Their Papers? A Case Study of , which discussed the "iParadigms" case, 544 F. Supp. 2d 473; 2008 U.S. Dist. LEXIS 19715.

There seems to have been no dispute that the students were authors, with standing to bring suit.

One also notes the text in the law review:

iParadigms' only reasonable conclusion is found in its analysis of the third factor. Relying heavily on Sony and Perfect 10, n153 iParadigms found that copying an entire work, when necessary to do so, does not preclude a finding of fair use. n154 It is conceded that to effectively locate a plagiarized portion of a paper, one must have access to as much data as possible and it must be in its original context. n155 This only comprises half of the answer though. Using the entire document does not preclude a finding of fair use, but it certainly does not favor one either. iParadigms acknowledged that the entire paper must be used for Turnitin's system to operate, but the statute does not ask the court to consider whether using the entire work is necessary, rather it questions "the amount and substantiality of the portion used in relation to the copyrighted work as a whole." n156 Taking into account the first two factors, which should not have favored Turnitin, this factor should be an additional strike against Turnitin, rather than an additional factor on its side.


Separately, from 90 St. John's L. Rev. 233 (2016);

In A.V. ex rel. Vanderhye v. iParadigms, LLC, n110 plaintiff students brought suit against iParadigms for copyright infringement of essays they wrote for submission to their high school teachers through the defendant's online plagiarism detection service. n111 The defendant owned and operated "Turnitin Plagiarism Detection Service" which allowed high school and college educators to evaluate the originality of their students' work. n112 A school could subscribe to iParadigms' service, and students would be required to submit their work through the web-based system. n113 Turnitin would then compare [page 247] the students' work with content already available online. n114 The students' work would subsequently become archived for future comparisons. n115 But for this process to occur, students had to agree through a "Clickwrap Agreement" when creating a profile to use the service. n116

Four high school students brought suit against iParadigms, claiming that they submitted a disclaimer on their assignments, which objected to the archiving of their work. n117 In reviewing the defendant's fair use defense, the district court held that iParadigms' use of the plaintiffs' work was transformative because "its purpose was to prevent plagiarism by comparative use, and that iParadigms' use of the student works did not impair the market value for high school term papers and other such student works." n118 On appeal, the Fourth Circuit held that while the commercial factor of the analysis tended to weigh against fair use, it had to be weighed alongside the other factors and was thus not determinative. n119 The plaintiffs argued that the district court erred in holding that iParadigms did not add anything new to a work to make it transformative, but simply stored the work in its archives. n120 They argued in the alternative that iParadigms still failed the transformativeness test because its service did not always prevent plagiarism and therefore did not have a transformative purpose. n121 The appellate court disagreed, holding that "the use of a copyrighted work need not alter or augment the work to be transformative in nature. Rather, it can be transformative in function or purpose without altering or actually adding to the original work." n122 Furthermore, the court determined that the use did not need to achieve its purpose perfectly, and that iParadigms' use of the works was transformative because it was "completely unrelated to expressive content" and was intended to discourage plagiarism. n123


The Sixth Circuit also reviewed the issue of transformativeness in verbatim copying. n64 In Princeton University Press v. Michigan Document Services, n65 the defendant, a commercial copyshop, reproduced substantial portions of copyrighted scholarly works and bound them into coursepacks for student use in reading assignments given by professors at the University of Michigan. n66 The copyshop did so without seeking or obtaining permission from copyright owners, and the plaintiff [*242] publishers filed suit for copyright infringement. n67 The district court found that the copyshop did not have a fair use defense, and on appeal, the Sixth Circuit agreed. n68 In considering the transformativeness of the coursepacks, the court stated, "If you make verbatim copies of 95 pages of a 316-page book, you have not transformed the 95 pages very much - even if you juxtapose them to excerpts from other works and package everything conveniently." n69

Facebook's Modular Phone patent application US 2017 0208700

The application includes discussion of functional modules.

CBS Sunday Morning on 23 July 2017 repeats work on immunotherapy treatments for cancer

On July 23, 2017, CBS Sunday Morning repeated a March 12 broadcast on cancer wherein CBS New chief medical correspondent Dr.Jon LaPook (not Jane Pauley) hosted a special edition of CBS Sunday Morning, devoted to cancer research and treatment. The Beyond Cancer edition featured Dr. LaPook’s report on the promising field of immunotherapy, in turn featuring work of Dr. Steven Rosenberg of NIH/NCI. Other portions included Rita Braver‘s interview with singer-songwriter and breast cancer survivor Sheryl Crow and Erin Moriarty on women who decided to forego breast reconstruction surgery following a double mastectomy

Note an August 2016 post
USPTO Offers a Fast Track to Cancer Immunotherapy Patents

AND from MoFo on 23 June 2017:

The United States Patent and Trademark Office (PTO) issued a Notice today extending the Cancer Immunotherapy Pilot
Program (Pilot Program), also known as "Patents 4 Patients." The Pilot Program, which accelerates the examination of
patent applications directed to cancer immunotherapy methods, will now expire on December 31, 2018, absent further
The PTO implemented the Pilot Program a year ago as part of the National Cancer Moonshot initiative. That initiative seeks
to transform cancer research and care by substantially accelerating efforts to combat cancer over the next five years.
Because the patent system is a driver of innovation, the program aims to advance cancer treatments so that they may
reach patients faster. Specifically, the Pilot Program seeks to achieve allowance of meritorious patents within 12 months
from filing a petition under the program.
There were more than 900 immunotherapy patent applications pending when the Pilot Program was first implemented. That
number likely has grown substantially due to the innovations in the immuno-oncology field. In its Notice, the PTO indicated
that 80 petitions have been requested, to date, and nine eligible patents have been granted under the Pilot Program.

Friday, July 21, 2017

Judge Newman dissent on construction of claim terms with a plain and ordinary meaning

In Nobelbiz, the CAFC reversed ED Texas on claim construction:

Global Connect, L.L.C. and T C N, Inc. (collectively,
the Defendants) appeal from a jury verdict finding they
infringed U.S. Patent Nos. 8,135,122 and 8,565,399.
Because the district court erred in its claim construction,
we reverse and remand.

Footnote 1 addresses the dissent by Judge Newman:

Contrary to the dissent’s characterization, this is
not merely a factual question of infringement. In our
claim construction, we do not examine the Defendants’
system, but focus on the intrinsic record: the claims, the
specification, and the prosecution history. The scope of
patent claims will always affect infringement, but the
meaning of the claim language remains a legal issue to be
determined by the judge, not the jury.

Judge Newman's dissent begins

It is not reversible error for the district court to decline
to “construe” terms that have a plain and ordinary
meaning as used in the patent. See Summit 6, LLC v.
Samsung Elecs. Co., 802 F.3d 1283, 1291 (Fed. Cir. 2015)
(“[E]ach [term] is used in common parlance and has no
special meaning in the art. Because the plain and ordinary
meaning of the disputed claim language is clear, the
district court did not err by declining to construe the
claim term.”).
The panel majority holds that the term “replacement
telephone number” should be construed as “a telephone
number that substitutes for an original telephone number,”
Maj. Op. at 7; the term “modify caller identification
data” should be construed as “change caller identification
data,” id.; and the term “outbound call” in the clause
“transmit the caller identification data to the call target
in connection with the outbound call” should be construed
as “a call placed by an originator to a target,” id. at 9. We
are not told how these corrected definitions could have
changed the result at trial.
There is no obligation for a district court to construe
straightforward terms whose meaning and scope are
readily understood. Summit 6, 802 F.3d at 1291. Infringement
in this case is not a product of arcane claim
language. See, e.g., Lazare Kaplan Int’l, Inc. v. Photoscribe
Techs., Inc., 628 F.3d 1359, 1376 (Fed. Cir. 2010)
(“This court agrees with the Defendants that the parties’
dispute concerns factual questions relating to the test for
infringement and not the legal inquiry of the appropriate
scope of the ‘positional accuracy’ limitation.”).


The decision of this case invokes the tension between
deciding factual questions of infringement and converting
such factual aspects into legal issues of claim construction.
See Function Media, L.L.C. v. Google, Inc., 708 F.3d
1310, 1326 (Fed. Cir. 2013) (comparing dispute over the
“scope of the claims” and “post-trial attempts to recharacterize
improper arguments as issues of claim
construction.”). See generally GPNE Corp. v. Apple Inc.,
830 F.3d 1365, 1373 (Fed. Cir. 2016) (“At bottom, then,
GPNE’s complaint rests not with the district court’s
failure to define claim scope, but with its allowing Apple
to make certain arguments to the jury.”).
The district court declined to decide the question of infringement
by way of claim construction. The court stated
that “the Court is not persuaded that it should limit the
independent claims to Defendants’ ‘catch and release’
construction given the intrinsic evidence,” Dist. Ct. Op at
*8, and allowed the question of infringement to be presented
to the jury. I do not discern reversible error in this
procedure. See, e.g., Verizon Servs. Corp. v. Cox Fibernet
Virginia, Inc., 602 F.3d 1325, 1334 (Fed. Cir. 2010)
(“While Verizon attempts to characterize the issue as one
of claim construction, its argument is more accurately
about whether Cox’s arguments to the jury about the
distinction between how its system works and the Internet
were improper . . . .”).

Comments on inherency in the Millennium decision [ 2017 U.S. App. LEXIS 12702 ]

Dennis Crouch took issue with the inherency portion of the Millennium decision [ 2017 U.S. App. LEXIS 12702 ]:

The easy part of the decision for the district court focused-in on the motivation to combine boronate and mannitol. The district court found that an Adams Patent “pointed directly to mannitol” for the combination. However, according to the Federal Circuit, “the Adams Patent’s fail[s] to mention mannitol.”

In my view, this easy-part is sufficient for the patentee to win, and my preference would be for the court to delete the rest of its muddled opinion – and instead rest its case on the lack of the motivation to combine. The remainder of the decision is somewhat difficult to follow because it jumps back and forth dancing around but never answering the basic question: If the combination would have been obvious to try, would its natural result also be considered obvious? At times, the court appears to agree that obviousness would follow, while other sections of the opinion suggest the compound would not have been obvious since its actual structure was so unexpected.
On the topic of inherency in particular, the court seems to have simply strung together several loosely related sentences. Take the following pair as an example:

Sandoz argues that although lyophilization in the presence of mannitol produced an unexpected result, the result was “inevitable” and thus “inherent,” and thus not “inventive.” However, invention is not a matter of what the inventor intended when the experiment was performed; obviousness is measured objectively in light of the prior art, as viewed by a person of ordinary skill in the field of the invention . . .

In the end, the reversal makes sense, but the law created is somewhat of a mess.


To be clear, from Judge Newman's opinion:

The district court held that the claims were obvious because they were the inherent result of an allegedly obvious process, viz., lyophilizing bortezomib in the presence of the bulking agent mannitol. Millennium argued that a person of ordinary skill would avoid lyophilization in developing a formulation involving bortezomib because "bortezomib was known to be unstable even in the dry state as a freestanding solid compound." Dist. Ct. Op. *6. The court was not persuaded by this argument and instead relied on the testimony of Sandoz's witness, Dr. Repta, to find that, as of the '446 Patent's priority date, lyophilization "was well-known in the field of formulation" and that it was considered an obvious alternative "when a liquid formulation provided limited success." Id.
the district court held the claims invalid on the ground of obviousness, agreeing with Sandoz that "Millennium conceded as a matter of law that the ester is the 'natural result' of freeze-drying bortezomib with mannitol." Id. at *8. The court reasoned that the "natural result" of a chemical procedure is inherent in the procedure, and thus the product thereof "would have been obvious to a person of ordinary skill," in the words of § 103.


The district court also clearly erred in its consideration of inherency in the case."A party must . . . meet a high standard in order to rely on inherency to establish the existence of a claim limitation in the prior art in an obviousness analysis." Par Pharm., 773 F.3d at 1195-96. "The mere fact that a certain thing may result from a given set of circumstances is not sufficient" to render the result inherent. In re Oelrich, 666 F.2d at 581 (quoting Hansgirg v. Kemmer, 102 F.2d 212, 214, 26 C.C.P.A. 937, 1939 Dec. Comm'r Pat. 327 (CCPA 1939)).


Sandoz argues that although lyophilization in the presence of mannitol produced an unexpected result, the result was "inevitable" and thus "inherent," and thus not "inventive." Sandoz Br. at 1, 12-17. However, in the case.invention is not a matter of what the inventor intended when the experiment was performed; obviousness is measured objectively in light of the prior art, as viewed by a person of ordinary skill in the field of the invention. "Those charged with determining compliance with 35 U.S.C. § 103 are required to place themselves in the minds of those of ordinary skill in the relevant art at the time the invention was made, to determine whether that which is now plainly at hand would have been obvious at such earlier time." Interconnect Planning Corp. v. Feil, 774 F.2d 1132, 1138 (Fed. Cir. 1985). No expert testified that they foresaw, or expected, or would have intended, the reaction between bortezomib and mannitol, or that the resulting ester would have the long-sought properties and advantages.

Separately, Kevin Noonan wrote:

The opinion suggests that obviousness requires the art to provide a reason for taking the particular experimental route leading to the claimed success, as well as a reasonable expectation of achieving that success. Instances, as here, where the result is unforeseen and serendipitous cannot satisfy these criteria.

As for the purported "inherency" of the outcome relied upon by the District Court in its reasoning, the panel found that the District Court had erred in agreeing with Sandoz that, because the result (the claimed bortezomib-mannitol ester) was "inevitable" it was also inherent, and therefore could not be inventive (in the archaic meaning of that term, i.e. non-obvious). The error stems from the principle that the inventor's intention is not the relevant consideration; it is whether the invention would have been objectively obvious to one of ordinary skill in the art. Here, there was no evidence that anyone "foresaw, or expected, or would have intended, the reaction between bortezomib and mannitol, or that the resulting ester would have the long-sought properties and advantages" and hence the invention was non-obvious.


IPBiz notes that obviousness relates to that which is known or reasonably foreseeable. Inherency (in an anticipation context) does NOT require this. In Millennium, the formation of, and the inherent properties of, the bortezomib-mannitol ester were not known or reasonably foreseeable. On these facts, the mere invocation of inherency was legal error.

As pointed out in a 2012 post in IPBiz on In re Daniels:

Appellants are correct insofar as that a retrospective (retroactive or backwards) employment of inherency by the Solicitor is incorrect in a § 103 analysis. Appellants are also correct that employment of inherency is incorrect in a § 103 analysis when it is not known in the art that the inherent part is in fact inherent. Newell, 891 F.2d at 899 quoting In re Spormann, 363 F.2d 444 (C.C.P.A. 1966), (“That which may be inherent is not necessarily known. Obviousness cannot be predicated on what is unknown.”).

See Inherency in an obviousness rejection
See also RIJCKAERT, 9 F.3d 1531

Although one can discuss "objectively obvious," the key analytical point is whether the compound and its properties were known (or reasonably foreseeable).


HBO's Confederate

There is discussion of the HBO show Confederate, an alternate history, which places slavery as a present-day institution in America.

On November 22, 1960, MacKinlay Kantor published an alternate history in LOOK titled If the South Had Won the Civil War, presenting the more plausible (alternate) theory that (victorious) Southern states would have given up slavery before 1900. His date was 1885. That is before the date May 13, 1888, when Brazil became the last Western hemisphere country to abolish slavery. Cuba was 1886 (although in Kantor's "history", the Southern states got Cuba, and the Northern states did NOT get Alaska.)

Tuesday, July 18, 2017

CAFC affirms PTAB in HTC case; claims of Cellular Communications survive IPR challenge

HTC v. Cellular Communications is a non-precedential decision,
which contains many significant issues (and a potent dissent by
Judge Dyk).

One issue that bothered LBE (but not directly addresses in the opinion)
was the issue of forfeiture of appeal rights at the CAFC on claim construction
when the PTAB explicitly said there were no claim construction issues.
How does one appeal what does not exist?

From the decision:

As an initial matter, we agree with HTC that the
Board’s ruling in this regard is a ruling on claim construction.
Although the Board stated that “no claim terms
require express construction,” Final Written Decision,
2016 WL 67220, at *3, the Board engaged in claim construction
when it proceeded to determine whether
D’Aviera (and Calder) disclose the “diverting” and “controlling”
limitations. It specifically concluded that the
’923 patent requires those steps to be performed by “separate
components,” which is a conclusion about the scope of
the ’923 patent, not the prior art, and which the Board
drew using the standard tools of claim construction. Id.
at *4–5 (citing claim construction cases, addressing the
language of the claims, and examining the claims in light
of the specification). Despite the heading under which the
Board’s analysis took place, the Board’s ruling about the
requirement of separate components was clearly a claim
: it “establish[ed] the scope and boundaries of
the subject matter that is patented.” Netword, LLC v.
Centraal Corp., 242 F.3d 1347, 1350 (Fed. Cir. 2001); see
Regents of the Univ. of Minn. v. AGA Med. Corp., 717 F.3d
929, 939–40 (Fed. Cir. 2013).

By regulation, the Board, in construing claims in an
IPR, must adopt the broadest reasonable interpretation in
light of the specification. 37 C.F.R. § 42.100(b); see Cuozzo
Speed Techs., LLC v. Lee, 136 S. Ct. 2131, 2142–46
(2016) (upholding regulation). The Board here relied
entirely on intrinsic evidence in concluding that the
patent claims require separate components for the diverting
and controlling functions. Accordingly, we review the
construction de novo. Microsoft Corp. v. Proxyconn, Inc.,
789 F.3d 1292, 1297 (Fed. Cir. 2015).

Of relevance in the outcome:

HTC counters that, in some patents, “a single prior
art structure that performs two functions can satisfy two
functional Claim elements.” Appellants’ Br. 14; id. at 32–
33.3 But, as HTC’s main authority makes explicit, “can
satisfy” does not mean “always satisfies”; rather, the
claims of any given patent must be evaluated in light of
the specification to determine whether their scope requires
more than one structure. In re Kelley, 305 F.2d
909, 916 (C.C.P.A. 1962). In this case, for the reasons
already given, claim 24 requires two structures for the
“diverting unit” and the “controlling entity.”

As to appeals of claim construction:

In Interactive Gift Express, Inc. v. CompuServe, Inc.,
256 F.3d 1323 (Fed. Cir. 2001), this court discussed the
preservation of contentions regarding claim construction
for appeal. It explained that presenting a “new claim
construction position” that “change[s] the scope of the
claim construction” on appeal is generally impermissible,
whereas “clarifying or defending the original scope of [a]
claim construction” or “supporting [the] existing claim
construction position with new citations to the specification”
is generally permissible. Id. at 1346–47. But the
issue of differentiating claim 1’s scope from claim 24’s
scope does not fit neatly into either category. And, as
noted, even in this court, HTC has not argued for such
Judgment and discretion are involved in assessing
whether an argument has been both adequately preserved
and adequately developed and whether to overlook deficiencies
in either respect. See, e.g., Icon Health & Fitness,
Inc. v. Strava, Inc., 849 F.3d 1034, 1040 (Fed. Cir. 2017);
SmithKline, 439 F.3d at 1320; Harris Corp. v. Ericsson
Inc., 417 F.3d 1241, 1251 (Fed. Cir. 2005); see also 16AA
Charles Alan Wright et al., Federal Practice & Procedure
§ 3974.1 n.36 (4th ed. 2017). Here, we think, the interests
in fair notice to the initial tribunal and to the opposing
party (both before the Board and in this court) would be
ill-served were we now to distinguish claim 1 from claim
24 where HTC never directly argued for such different
scopes or explained why it justifiably should win on claim
1 even if it lost on claim 24, and where HTC stated in this
court there was no meaningful difference between the
claims. Those interests have particular weight in the
context before us.

It is not plausible that HTC inadvertently
overlooked the potential for a half win, which it
might well have deliberately chosen to discourage by
taking an all-or-nothing approach. Moreover, the IPR
regime at issue places a special premium on efficient
Board resolution of patentability challenges. See 35
U.S.C. §§ 316(a)(11), 318(d); Cuozzo, 136 S. Ct. at 2144;
H.R. Rep. No. 112-98, pt. 1, at 39–40, 45 (2011), as re-
printed in 2011 U.S.C.C.A.N. 67, 69, 75. In these circumstances,
we will not decide whether claim 1 should be
accorded a different scope from that of claim 24 in the
respect at issue.
Other cases involving different circumstances could
justify a different judgment. This is not a case in which
“‘the proper resolution is beyond any doubt, or where
injustice might otherwise result.’” Interactive Gift, 256
F.3d at 1344 (quoting Singleton v. Wulff, 428 U.S. 106,
121 (1976)); see also Icon Health, 849 F.3d at 1040. As to
the proper resolution, the seemingly relevant considerations
are mixed. On one hand, the claims differ in their
language: claim 1 makes no mention of a “diverting unit,”
and we see no reason that a “controlling entity” cannot
“divert” a message to itself as a matter of English language
alone, putting aside what the context of this particular
patent may require. On the other hand, such context
cannot be put aside, and claim 1, through its claiming of a
“controlling entity,” is linked to claim 24, which claims
the same “controlling entity,” raising a question about
whether the common entity could be properly understood
as doing more (i.e., diverting) in claim 1 than it does in
claim 24. See In re Varma, 816 F.3d 1352, 1363 (Fed. Cir.
2016). Moreover, as we have explained, the specification
gives no example of a single-structure embodiment,
whether of a device or a method. At least for those reasons,
the dissent’s view—that this patent is reasonably
read to claim a method invention broader (in the respect
at issue) than the device version of the invention—is not
“beyond any doubt.”4

Trademarks in music. Flashback to New Jersey stating: its previous position "was inadvertently put into the brief."

Further to the July 17 IPBiz post on "who" sang the number one hit "He's a Rebel" (the Blossoms, not the Crystals),
IPBiz notes another interesting bit of music intellectual property. It is "like" the issue in "He's a Rebel," because it involves a "confusion of source" issue. The State of New Jersey was trying to enforce its "Truth in Music" Act (to avoid confusion related to later day bands performing music of earlier groups) against an entity who had in fact secured common law trademark rights. The State lost.

The case comes from events in Atlantic City, New Jersey, concerning a dispute between the state of New Jersey and someone operating with a license of a common law trademark (e.g., from the Platters). The caption: SINGER MANAGEMENT CONSULTANTS, INC.; LIVE GOLD OPERATIONS, INC., v. ANNE MILGRAM, Attorney General of the State of New Jersey, Live Gold Operations, Inc., Appellant, 650 F.3d 223; 99 U.S.P.Q.2D 1180 (CA3 2011), which was an en banc decision [Before: McKEE, Chief Judge, SLOVITER, SCIRICA, RENDELL, BARRY, AMBRO, FUENTES, SMITH, FISHER, CHAGARES, JORDAN, HARDIMAN, GREENAWAY JR., VANASKIE, ALDISERT and ROTH, Circuit Judges. ROTH, Circuit Judge, dissenting, with whom McKEE, Chief Judge, SLOVITER and ALDISERT, Circuit Judges, join. ALDISERT, Circuit Judge, dissenting. ]:

Live Gold Operations, Inc. manages and promotes the music recording and performing [page 225] groups known as "The Platters" and "The Cornell Gunter Coasters" pursuant to licenses of unregistered trademarks. In August 2007, the State of New Jersey learned that Live Gold had scheduled a two-week concert, to begin on August 18, of the Platters and Coasters groups at the Hilton Hotel in Atlantic City. The State informed Live Gold that its use of the trademarks "The Platters" and "The Cornell Gunter Coasters" might violate the New Jersey Truth in Music Act, which provides in pertinent part:

A person shall not advertise or conduct a live musical performance or production through the use of an affiliation, connection or association between the performing group and the recording group unless:

(a) The performing group is the authorized registrant and owner of a federal service mark for the group registered [**3] in the United States Patent and Trademark Office; or

(b) At least one member of the performing group was a member of the recording group and has a legal right by virtue of use or operation under the group name without having abandoned the name or affiliation of the group; or

(c) The live musical performance or production is identified in all advertising and promotion as a salute or tribute; or

(d) The advertising does not relate to a live musical performance or production taking place in this State; or

(e) The performance or production is expressly authorized by the recording group.

N.J. Stat. Ann. § 2A:32B-2.

Things did not go well for the State of New Jersey in D.N.J.:

On September 7, 2007, the parties returned to the District Court [D. N.J.]for a hearing on the preliminary injunction. In its written submission prior to the hearing, the State argued that an unregistered trademark satisfied the Truth in Music Act only if the performing group obtained express authorization from an original group member, included an original member, or denominated itself as a tribute or salute to the original group. The State contended that its interpretation of the Act was consistent with the Lanham Act, the First Amendment, and the Equal Protection Clause of the Fourteenth Amendment. It also objected to Live Gold's suit on jurisdictional grounds.

Judge Debevoise began the preliminary injunction hearing by asking the State why it insisted on distinguishing between registered and unregistered trademarks: "Why shouldn't they proceed on an equal basis, two valid trademarks?" In response, the State contended that because the Lanham Act accorded a rebuttable presumption of validity to registered trademarks, its action here against unregistered trademarks was consistent with federal law. Judge Debevoise repeatedly rejected this argument, explaining that the differences under federal law between registered and unregistered trademarks for purposes of validity did not authorize the State to discriminate against an unregistered trademark, once proven valid. "There's no reason for it," he declared. Nevertheless, the State continued to press its interpretation of the Truth in Music Act. Judge Debevoise again rejected the State's position, stating, "Well, I fail to see it."

After rejecting the State's arguments, Judge Debevoise suggested that the State reconcile the Truth in Music Act with the Lanham Act by interpreting subsection (e) of the former to permit unregistered trademark holders to perform under their group names without any additional requirements. The State suddenly capitulated, effectively adopting Live Gold's interpretation of the Act. Incredulous, Live Gold objected that the State had made "a 180 degree shift in position." Judge Debevoise agreed, telling the State that the position in its brief was "contrary to what I [just] understood you to say." In response, the State explained that its previous position "was inadvertently put into the brief." The Judge then declared that the State would be "bound" by its new interpretation of the Act.

Live Gold then moved for summary disposition, contending that it "should win" because the State had "admitt[ed] the allegations" in the complaint. Judge Debevoise observed that the State's new position resolved the "basic legal problem, which was an equal protection problem, a First Amendment problem, [and] a due [page 227] process problem." He again took note of the State's "evolved" position, but saw no need to "go any further." He then announced:

We have a statement by the State of New Jersey as to what the meaning of this statute is insofar as it relates to common law trademarks, and I think we've stated it. If there's a valid common law trademark under the Lanham Act, and if whoever has possession of it can establish a right to that possession, he is to be treated — or she is to be treated in the same way as the holder of a registered trademark. Now, no necessity of — to say or give any tribute to anybody. So we have an agreement on that.

The issue before the Third Circuit was attorney's fees:

Judge Debevoise then turned to Pryor Cashman's application for attorney's fees. After hearing from Live Gold, he asked, "State, why shouldn't you be responsible for attorney's fees[?]" In response, the State replied that a fee award was inappropriate because "there was no past enforcement action" and because it had never taken any position on the Truth in Music Act. Judge Debevoise disagreed with the latter contention, reminding the State that it made a "180 degree change in position because [it] came in negating everything that [Live Gold] [was] urging, and in effect conceded [Live Gold] [was] right, and permitted everything to go forward." The State again distanced itself from its initial arguments, explaining that they were "not . . . as clear as they could have been" because the State was rushed in responding to the TRO application. The Court took the matter under advisement.

One month later, Judge Debevoise entered an order affirming the Magistrate Judge's order denying reimbursement of Live Gold's attorney's fees and granting [page 228] the State's motion to dismiss. In his order, Judge Debevoise held that Live Gold was not a prevailing party because he "did not enter a preliminary injunction or any other order on the merits of the case." He also concluded that the State voluntarily changed its position, stating that "[w]hile it may be true that this court's involvement aided in the resolution of the constitutional issues between the parties, the fact remains that the issues were not resolved as the result of a court order." In granting the State's motion to dismiss, Judge Debevoise concluded that Live Gold's claims were moot in light of the parties' agreement that the preliminary injunction hearing had resolved all of Live Gold's constitutional claims. In this appeal, Live Gold challenges only the denial of attorney's fees.

CA3 affirmed and thus no award of attorney's fees: "Because no enforceable judgment on the merits issued in this case and the State's actions that mooted the case were voluntary, Buckhannon tells us that Live Gold was not a prevailing party. Given that precedent, we affirm."

Yes, there was a dissent [ ROTH, Circuit Judge, dissenting, with whom McKEE, Chief Judge. SLOVITER and ALDISERT, Circuit Judges, join. ]

The dissent emphasized the grant of the TRO:

"When does a party 'prevail' within the meaning of 42 U.S.C. § 1988?" That is the basic question that both parties here are asking. The Majority qualifies the question by referring to certain facts of record: "Does a party 'prevail' if it obtains a temporary restraining order the day after it files suit . . . but 22 days later is denied a preliminary injunction because the opposing party's voluntary change of position moots the case?" The Majority answers "No" to the question.

I would add different facts to the basic question — and, by doing so, I arrive at a different answer. My "different" qualifying facts are clearly found in the record of this case. Moreover, my facts support a finding of "prevailing party."

I acknowledge that the qualifying facts that the Majority depends upon are reflected in the record before us. As the Majority states, there was a temporary restraining order (TRO) granted. The Majority does not mention, however, that the TRO granted a large part of the relief plaintiffs sought. [page 1187]


The court took note of the State's "evolved" position and then stated:

We have a statement by the State of New Jersey as to what the meaning of this statute is insofar as it relates to common law trademarks, and I think we've stated it. If there's a valid common law trademark under the Lanham Act, and if whoever has possession of it can establish a right to that possession, he is to be treated — or she is to be treated in the same way as the holder of a registered trademark. Now, no necessity of — to say or give any tribute to anybody. So we have an agreement on that.

(App. 388.) There was no dissent.

This conclusion by the court, that a valid common law trademark was to be recognized in the same way as a registered trademark, was the merits question put to the court by Live Gold — and the State of New Jersey was now bound in this action by this legal conclusion. I cannot imagine that the State would dare come again before the District Court and take any position contrary to the ruling of the court: "So we have an agreement on that." Nor, as I discuss later, would the State be in the position to contend in any future action before the New Jersey District Court that a valid common law trademark was not to be accorded the same recognition as a registered one. If it did so, the State would be barred by judicial estoppel.

With these facts in mind, I state my question as follows: "Does a party 'prevail' under the meaning of 42 U.S.C. § 1988 when it has obtained a TRO, granting an important part of the relief sought, and further when its opponent has been bound by the District Court to the position of law that grants complete relief on the merits of the complaint." I answer "Yes." I conclude from this factual setting, supported by the record, that Live Gold is clearly a prevailing party and, thus, deserves an award of its reasonable attorney's fees.

The dissent also noted:

The Majority contends, however, that Live Gold did not receive a judgment on the merits. The Majority does agree that the TRO Live Gold obtained constituted a judgment [page 1188] and that injunctive relief "can, under appropriate circumstances, render a party 'prevailing.'" See ante, 13 (quoting People Against Police Violence v. City of Pittsburgh (PAPV), 520 F.3d 226, 233 (3d Cir. 2008)). But, I part ways with the Majority on its conclusion that the TRO here was not a resolution on the merits.

I find it clear that the TRO obtained by Live Gold was a "judicially sanctioned change in the legal relationship" between Live Gold and the State of New Jersey. The TRO allowed Live Gold to achieve much of the benefit it sought in bringing suit and provided some relief on the merits of its claims. Before the TRO hearing, New Jersey indicated that Live Gold could be penalized if the Platters and the Coasters were not billed as "tribute" bands. After the District Court issued the TRO, the bands were permitted to perform under the names "Platters" and "Coasters" without modifiers like "tribute" or "salute to," and the State was prohibited from penalizing Live Gold for doing so.

Perhaps, the Majority balks at the straightforward conclusion that there was relief here on the merits because it fears that "consent decrees" and "judgments on the merits," or their equivalents, are the only types of outcomes that confer prevailing party status. However, as the Majority seems to concede, there is little doubt that a plaintiff who gains preliminary relief may be a prevailing party. The Supreme Court has not disturbed the longstanding rule that "'plaintiffs may be considered 'prevailing parties' for attorneys' fees purposes if they succeed on any significant issue in litigation which achieves some of the benefit the parties sought in bringing suit,'" Farrar v. Hobby, 506 U.S. 103, 109, 113 S. Ct. 566, 121 L. Ed. 2d 494 (1992) (quoting Hensley, 461 U.S. at 433), as long as the relief obtained provides at least some relief on the merits, see Buckhannon, 532 U.S. at 604, and consists of a judicially sanctioned change in the legal relationship of the parties, see Rhodes v. Stewart, 488 U.S. 1, 4, 109 S. Ct. 202, 102 L. Ed. 2d 1 (1988) (per curiam) (plaintiff not prevailing party where declaratory judgment was entered after his death and thus could not change his legal relationship to defendants).1

Of some interest to eBay and injunctions in patent cases:

Furthermore, the Majority's conclusion that the TRO in this case was not granted "on the merits" suffers from the failure of the Majority to offer a definition or test for when a decision is "on the merits" in a case involving the grant of preliminary relief. Rather, the Majority states merely that "the 'merits' requirement is difficult to meet in the context of TROs and preliminary injunctions," and that the "decision in PAPV provides an example of that rare situation where a merits-based determination is made at the injunction stage." Ante, 13. This conclusion is confusing in light of the Majority's acknowledgment that to obtain a TRO or preliminary injunction, the plaintiff needs to "show a likelihood of success on the merits." Id.; see also Munaf v. Geren, 553 U.S. 674, 690, 128 S. Ct. 2207, 171 L. Ed. 2d 1 (2008). One would expect that when a plaintiff makes a sufficient showing of likelihood of success on the merits to obtain "an 'extraordinary and drastic remedy,'" a remedy that is "never awarded as of right," Munaf, 533 U.S. at 689-90, this victory would frequently result in prevailing party status.3

- - - - - - - - - - - - - - Footnote 3 - - - - - - - - - - - - - - -
3 The Majority attempts to evade this common-sense conclusion by mistakenly arguing that "'likelihood' does not mean more likely that than not." Ante at 13 (citing Hackett v. Price, 381 F.3d 281, 290-91 (3d Cir. 2004).) But Hackett was not a preliminary injunction case — it was a habeas case concerning the constitutionality of jury instructions at the penalty phase of a capital case, where the question was "whether there is a reasonable likelihood that the jury has applied the challenged instruction in a way that prevents the consideration of constitutionally relevant evidence." Id. at 290. Hackett acknowledged that "[a]s one definition of 'likely' is 'having a better chance of existing or occurring than not,' Webster's Third New International Dictionary 1310 (1971), someone could plausibly argue that 'reasonable likelihood' is not a lesser standard than 'more likely than not.'" Indeed, "courts use a bewildering variety of formulations of the need for showing some likelihood of success." 11A Charles Alan Wright & Arthur R. Miller, Federal Practice and Procedure § 2948.3 (2d. ed. 2010).
[End footnote 3]

Yes, judicial estoppel is mentioned:

In addition to the judicial order here, the District Court permanently altered the legal relationship between the parties. The court's statement that the State would be "bound" by its new interpretation of the Act should bar the State from taking any inconsistent positions in future litigation because of the doctrine of judicial estoppel. Judicial estoppel is an equitable doctrine that entails "'the intrinsic ability of courts [page 239] to dismiss an offending litigant's complaint without considering the merits of the underlying claims when such dismissal is necessary to prevent a litigant from playing fast and loose with the courts.'" In re Kane, 628 F.3d 631, 638 (3d Cir. 2010) (quoting Krystal Cadillac-Oldsmobile GMC Truck, Inc. v. Gen. Motors Corp., 337 F.3d 314, 319-20 (3d Cir. 2003)). "[T]he basic principle of judicial estoppel . . . is that absent any good explanation, a party should not be allowed to gain an advantage by litigation on one theory, and then seek an inconsistent advantage by pursuing an incompatible theory." Krystal Cadillac, 337 F.3d at 319 (quoting Ryan Operations G.P. v. Santiam-Midwest Lumber Co., 81 F.3d 355, 358 (3d Cir. 1996)). "Though there is no rigid test for judicial estoppel, three factors inform a federal court's decision whether to apply it: there must be (1) 'irreconcilably inconsistent positions;' (2) 'adopted . . . in bad faith;' and (3) 'a showing that . . . estoppel . . . address[es] the harm and . . . no lesser sanction [is] sufficient.'" G-I Holdings, Inc. v. Reliance Ins. Co., 586 F.3d 247, 262 (3d Cir. 2009) (quoting Chao v. Roy's Constr., Inc., 517 F.3d 180, 186 n.5 (3d Cir. 2008)).

Here, once the State had reversed course and accepted that a valid common law trademark must be treated in the same way as a registered trademark, the State would be judicially estopped from adopting a contrary interpretation of the Act in any subsequent judicial proceeding and certainly in any proceeding against Live Gold. This is the significance of the District Court's statement that the State was "bound" to its new interpretation. Moreover, it showed that the District Court must have relied on this commitment by the State when the court did not enter a permanent injunction [page 1192] [**46] against the State. If the State were to assert again that the Truth in Music Act does not recognize valid common law trademarks, it would be asserting an inconsistent position in presumptive bad faith after already having conceded the wrongfulness of such an assertion. Judicial estoppel, therefore, would apply to prevent the State from perpetuating a fraud on the court. See New Hampshire, 532 U.S. at 751 (noting that a court addressing judicial estoppel should consider "whether the party seeking to assert an inconsistent position would derive an unfair advantage or impose an unfair detriment on the opposing party if not estopped").

Previous IPBiz post Who actually recorded "He's a Rebel"?

Monday, July 17, 2017

Who actually recorded "He's a Rebel"?

If you listen to '60s radio, you are likely to hear "He's a Rebel," which you will be told was recorded by
the Crystals.

But, although that is what the record says, it isn't true. What you hear is done by the Blossoms, with
Darlene Love (picture).

See wikipedia:

Darlene Love on 16 July 2017 in New Jersey:


MILLENNIUM PHARMACEUTICALS scores win at CAFC in '446 (Velcade® ) case; Judge Newman explicates obviousness

The case pertains to the chemical compound D-mannitol
boronate, described in the text

The mannitol
ester of bortezomib acts as a “prodrug,” a compound that
converts to or releases the active pharmaceutical ingredient
upon administration to a patient. This discovery is
described and claimed in the ’446 Patent.
The ensuing drug product (Velcade®) became “a cancer
treatment that changed the decades-old standard of
care for multiple myeloma and has saved thousands of

The outcome of the CAFC decision:

On review of the record and the applicable law, we
conclude that the district court erred in the Sandoz litigation
and that invalidity was not established. We reverse
and enter judgment in favor of Millennium in the Sandoz
litigation. We also vacate the district court’s judgment in
the action between Millennium, Teva, and Apotex based
on our decision in the Sandoz litigation and remand that
action for further proceedings.

There is a Kansas connection:

The inventor of the ’446 Patent was associated with
the National Cancer Institute and the University of
Kansas, and was consulted by Dr. Adams after years of
unsuccessful attempts to solve formulation and stability
problems with bortezomib. Despite preparing approximately
twenty-five different liquid formulations, these
efforts encountered the same stability and solubility
problems as had other researchers attempting to solve
this problem.
After failing to develop a viable liquid formulation, researchers
began work on a lyophilized formulation for
injection. The process of lyophilization (freeze-drying) is
not intended to change the chemical structure of the
active pharmaceutical ingredient. After experimenting
with multiple variables that affect the lyophilization
process, including solvents and bulking agents, researchers
produced a promising lyophilized formulation using
mannitol, a known bulking agent. It was discovered that
the reason for the dramatic improvement in dissolution
and stability for this formulation was the formation of a
new chemical compound during lyophilization: the
claimed ester of bortezomib and mannitol. The mannitol
ester of bortezomib acts as a “prodrug,” a compound that
converts to or releases the active pharmaceutical ingredient
upon administration to a patient. This discovery is
described and claimed in the ’446 Patent.

District court reasoning:

The district court held that the claims were obvious
because they were the inherent result of an allegedly
obvious process, viz., lyophilizing bortezomib in the presence
of the bulking agent mannitol. Millennium argued
that a person of ordinary skill would avoid lyophilization
in developing a formulation involving bortezomib because
“bortezomib was known to be unstable even in the dry
state as a freestanding solid compound.” Dist. Ct. Op. *6.
The court was not persuaded by this argument and instead
relied on the testimony of Sandoz’s witness, Dr.
Repta, to find that, as of the ’446 Patent’s priority date,
lyophilization “was well-known in the field of formulation”
and that it was considered an obvious alternative “when a
liquid formulation provided limited success.” Id.
The district court did not find that the prior art
taught or suggested that the claimed new compound
would be formed, or taught or suggested making the
claimed new compound by any method, or taught or
suggested that this new compound would have the properties
of stability, solubility, and dissociability that it
exhibited. No reference taught or suggested reacting
bortezomib with mannitol, and no reference hinted that
such an esterification reaction might occur during lyophilization.
No reference taught or suggested that the product
of such lyophilization would be a new chemical
compound that would solve the problems that had inhibited
development of bortezomib in oncology. H


On the evidence of objective indicia of obviousness,
the district court found that Millennium did not establish
unexpected results because it did not compare the claimed
invention to a glycerol ester of bortezomib. Id. at *9. The
court also rejected long-felt need as objective evidence of
non-obviousness, stating that “the lyophilized mannitol
ester of bortezomib did not solve any problem having
persisted over a long period of time without resolution by
the prior art.” Id. at *10 (quoting Hitachi Koki Co. v.
Doll, 620 F. Supp. 2d 4, 30 (D.D.C. 2009)).

The CAFC said:

Recognizing our obligation to give deference to a district
court’s greater familiarity with the record and authority
to reach factual conclusions therefrom, we
conclude that the district court erred in its evaluation of
obviousness. See KSR Int’l Co. v. Teleflex Inc., 550 U.S.
398, 419-20 (2007) (the question of law is whether the
prior art rendered the invention obvious). In the case at
bar, the question is whether a person of ordinary skill,
seeking to remedy the known instability and insolubility
and to produce an efficacious formulation of bortezomib,
would obviously produce the D-mannitol ester of bortezomib,
a previously unknown compound.
The prior art contains no teaching or suggestion of
this new compound, or that it would form during lyophilization.
Sandoz identifies no reference or combination of
references that shows or suggests a reason to make the
claimed compound. No reference teaches or suggests that
such a new compound would have the long-sought properties
of stability and solubility, and sufficiently dissociate
to release bortezomib at an effective rate in the bloodstream,
all critical to effective use for treating multiple
The D-mannitol ester of bortezomib is a new compound
with distinct chemical properties. We consider
whether the prior art “would have supplied one of ordinary
skill in the art with a reason or motivation to modify
a lead compound to make the claimed compound with a
reasonable expectation of success.” Otsuka Pharm. Co.,
Ltd. v. Sandoz, Inc., 678 F.3d 1280, 1292 (Fed. Cir. 2012);
see also Bristol-Myers Squibb Co. v. Teva Pharm. USA,
Inc., 752 F.3d 967, 973 (Fed. Cir. 2014) (“To establish
obviousness in cases involving new chemical compounds,
the accused infringer must identify some reason that
would have led a chemist to modify a known compound.”);
In re Rosuvastatin Calcium Patent Litig., 703 F.3d 511,

518 (Fed. Cir. 2012) (affirming district court conclusion
that “the Defendants did not demonstrate the required
motivation for selecting Sandoz Compound 1b as a lead
compound”). The parties agree that bortezomib is the
proper lead compound for this analysis. It is not disputed
that the Velcade® compound provided unexpected properties,
solving the problems that accompanied bortezomib.
The district court clearly erred in its obviousness
analysis. There is no teaching or suggestion in the references
to produce the claimed mannitol ester. No reference
shows or suggests ester formation at freeze-drying conditions,
or that any such ester might solve the problems of
instability and insolubility of the free acid while dissociating
rapidly in the bloodstream. No reference provides a
reason to make the mannitol ester of bortezomib.


Although mannitol was a known
bulking agent, and lyophilization was a known method of
drug formulation, nothing on the record teaches or suggests
that a person of ordinary skill should have used
mannitol as part of a synthetic reaction to make an ester
through lyophilization. A result is obvious when it is “the
natural result flowing from the operation as taught,” or a
“property that is necessarily present” when applying a
process disclosed in the prior art. Par Pharm., Inc. v. TWI
Pharm., Inc., 773 F.3d 1186, 1195 (Fed. Cir. 2014) (emphasis
omitted) (first quoting In re Oelrich, 666 F.2d 578,
581 (CCPA 1981); then quoting Alcon Research, Ltd. v.
Apotex Inc., 687 F.3d 1362, 1369 (Fed. Cir. 2012), and In
re Kubin, 561 F.3d 1351, 1357 (Fed. Cir. 2009)). Sandoz
failed to show that it was obvious to use mannitol to make
an ester during lyophilization, or that the ester would
solve the problems experienced with bortezomib.

Nobel laureate H.C. Brown appears in a footnote:

Herbert C. Brown and J.V.N. Vara Prasad, Chiral
Synthesis via Organoboranes. 9. Crystalline “Chelates”
from Borinic and Boronic Esters. A Simple Procedure for
Upgrading Borinates and Boronates to Materials Approaching
100% Optical Purity, 51 J. ORGANIC CHEMISTRY
4526 (1986)

Yes, the CAFC discussed inherency:

The district court also clearly erred in its consideration
of inherency. “A party must . . . meet a high standard
in order to rely on inherency to establish the existence of
a claim limitation in the prior art in an obviousness
analysis.” Par Pharm., 773 F.3d at 1195–96. “The mere
fact that a certain thing may result from a given set of
circumstances is not sufficient” to render the result inherent.
In re Oelrich, 666 F.2d at 581 (quoting Hansgirg v.
Kemmer, 102 F.2d 212, 214 (CCPA 1939)).
The district court stated that Millennium “conceded
as a matter of law that the ester is the ‘natural result’ of
freeze-drying bortezomib with mannitol.” Dist. Ct. Op. *8.
However, “[t]he inventor’s own path itself never leads to a
conclusion of obviousness; that is hindsight. What matters
is the path that the person of ordinary skill in the art
would have followed, as evidenced by the pertinent prior
art.” Otsuka, 678 F.3d at 1296. This oft-cited principle is
explained in, for example, In re Kratz, 592 F.2d 1169,
1175 (CCPA 1979):
However, making weight of the method appellant
used in finding the invention is beside the point.
The last sentence of 35 U.S.C. § 103, with great
clarity, excludes such methodology in stating that
“(p)atentability shall not be negatived by the
manner in which the invention was made.”
See also, e.g., Life Techs., Inc. v. Clontech Labs., Inc., 224
F.3d 1320, 1325 (Fed. Cir. 2000) (“[T]he path that leads
an inventor to the invention is expressly made irrelevant
to patentability by statute.”).

Sandoz argues that although lyophilization in the
presence of mannitol produced an unexpected result, the
result was “inevitable” and thus “inherent,” and thus not
“inventive.” Sandoz Br. at 1, 12-17. However, invention
is not a matter of what the inventor intended when the
experiment was performed; obviousness is measured
objectively in light of the prior art, as viewed by a person
of ordinary skill in the field of the invention. “Those
charged with determining compliance with 35 U.S.C.
§ 103 are required to place themselves in the minds of
those of ordinary skill in the relevant art at the time the
invention was made, to determine whether that which is
now plainly at hand would have been obvious at such
earlier time.” Interconnect Planning Corp. v. Feil, 774
F.2d 1132, 1138 (Fed. Cir. 1985). No expert testified that
they foresaw, or expected, or would have intended, the
reaction between bortezomib and mannitol, or that the
resulting ester would have the long-sought properties and

And of secondary considerations:

We conclude finally that the district court clearly
erred in its examination of the objective indicia of unexpected
results and long-felt need. All of the Graham
factors must be considered, including the objective indicia
when present, before any conclusion regarding obviousness
is reached. In re Cyclobenzaprine, 676 F.3d at 1075–
76 (citation omitted); Gambro Lundia AB v. Baxter
Healthcare Corp., 110 F.3d 1573, 1579 (Fed. Cir. 1997);
see Ortho-McNeil Pharm., Inc. v. Mylan Labs., Inc., 520
F.3d 1358, 1365 (Fed. Cir. 2008) (stating that objective
indicia are “not just a cumulative or confirmatory part of
the obviousness calculus but constitute[] independent
evidence of nonobviousness”).
Evidence of objective indicia “can be the most probative
evidence of nonobviousness in the record,” and objective
indicia enable “the court to avert the trap of
hindsight.” Leo Pharm. Prods., Ltd. v. Rea, 726 F.3d
1346, 1358 (Fed. Cir. 2013) (quoting Crocs, Inc. v. Int’l
Trade Comm’n, 598 F.3d 1294, 1310 (Fed. Cir. 2010)).
These indicia cannot be set aside in the analysis of obviousness.

The outcome:

The district
court’s judgment of invalidity is reversed, and judgment is
entered in favor of Millennium as to the Sandoz defendants.
We remand for any appropriate further proceedings
in that action.
The judgment between Millennium and Apotex and
Teva is vacated, and remanded for further proceedings in
those actions.


**Separately, from blawgsearch on 17 July 17: