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11.16.2010 | Legal Advisory

In recent weeks, the Court of Appeals for the Federal Circuit (Federal Circuit) decided a number of noteworthy patent cases. The cases that follow touch on a variety of issues, including claim construction, patentable subject matter, prior inventorship, standing, and industry standard compliance as evidence of infringement.

Implicit Redefinition of Claim Terms and Patentability of Printed Matter
– AstraZeneca LP v. Apotex, Inc. (November 1, 2010)

In AstraZeneca LP v. Apotex, Inc. the Federal Circuit reaffirmed that claim terms can be implicitly redefined in the specification, for example where the term is used throughout the specification in a manner consistent with only a single meaning.

The defendant, Apotex, filed an Abbreviated New Drug Application (ANDA) seeking FDA approval to manufacture and sell a generic version of Pulmicort®, a budesonide inhalation suspension developed and patented by AstraZeneca for treating asthma. AstraZeneca then filed a declaratory judgment action and moved to enjoin Apotex from distributing the generic.

Apotex challenged the validity of the asserted claims, which included both method of use claims and kit claims. The method claims recited administering a “budesonide composition” once daily. Apotex argued that the claimed “budesonide composition” should be construed to include budesonide encased in a liposome shell, once-daily administration of which was taught by a prior art patent. The court disagreed, finding that the patentee had implicitly defined “budesonide composition” in the specification to mean only compositions in which budesonide was dispersed in a solvent. The court noted that “the specification may reveal a special definition given to a claim term by the patentee that differs from the meaning it would otherwise possess” and that “the specification need not reveal such a definition explicitly.” Rather, “a claim term may be clearly redefined without an explicit statement of redefinition,” for example “when a patentee uses a claim term throughout the entire patent specification in a manner consistent with only a single meaning.” As a result, the recited “budesonide composition” differed from the prior art liposome-encased budesonide, and the validity of the method claims was affirmed.

Although the finding of implicit redefinition was helpful to the patentee in AstraZeneca, the case is an important reminder that care should be taken when drafting patent applications to avoid unintentionally redefining a claim term to have a narrower scope than intended.

The AstraZeneca court also addressed the issue of whether a kit claim directed to a known pharmaceutical in combination with a printed label indicating a new use of the pharmaceutical could give rise to a patentable invention.

The asserted kit claims recited the budesonide composition and a label indicating once-daily administration by nebulization. Apotex argued that the kit claims were invalid because the composition was known in the prior art, and because a printed label is of no patentable consequence. The court agreed, holding that printed matter is generally outside the scope of 35 U.S.C. §101, unless there is a functional relationship between the printed matter and its substrate. Here, the court found that “the instructions in no way function with the drug to create a new, unobvious product” and therefore the kit claims were invalid. The court also found the parties’ disagreement as to whether the “substrate” was the drug or the label to be immaterial, because under either interpretation the printed matter did no more than “explain how to use the known drug.”

Accordingly, patent applicants should not rely solely on printed matter in distinguishing their invention, and should instead recite other patentable features in the claims. Additionally, patentees who are considering asserting claims that recite printed matter should review the other features of the claim carefully to ensure that those features alone would withstand a validity attack.

Definition of “Prior Inventor” Under 35 U.S.C. §102(g) – Solvay S.A.
v. Honeywell International, Inc. (October 13, 2010)

The Federal Circuit in Solvay S.A. v. Honeywell International, Inc. held that a “prior inventor” under §102(g) must conceive of the invention and reduce it to practice in the United States. This clarification of the statute should be useful to those assessing whether a particular activity constitutes invalidating prior art.

The plaintiff, Solvay, sued Honeywell for infringement of its patent directed to methods for making HFC-245fa, an insulation agent commonly used in refrigeration and heat storage systems. Solvay appealed after the district court ruled that some of its asserted claims were invalid under 35 U.S.C. §102(g)(2).

The claimed invention was conceived and first reduced to practice in Russia by the Russian Scientific Center for Applied Chemistry (RSCAC). Pursuant to a research agreement, RSCAC reported its invention to Honeywell and provided detailed instructions for carrying out the inventive method. Honeywell subsequently began practicing the invention in the United States before the priority date of the asserted patent.  Based on these undisputed facts, the district court found that Honeywell was a “prior inventor” under §102(g)(2) and therefore held the asserted claims to be invalid.

On appeal, the Federal Circuit reversed. The court held that §102(g)(2) requires the prior invention to be made in the United States, and that “invention” requires both conception and reduction to practice. Here, conception occurred in Russia by RSCAC, an entity entirely separate and distinct from Honeywell. Honeywell’s United States activity, which merely involved following the detailed instructions of RSCAC, did not amount to conception in the United States. Accordingly, Honeywell was not a “prior inventor” under the statute, and the district court’s invalidity ruling was in error.

Standing for Subsequent Paragraph IV ANDA Filers – Teva
Pharmaceuticals USA, Inc. v. Eisai Co., Ltd. (October 6, 2010)

In Teva Pharmaceuticals USA, Inc. v. Eisai Co., Ltd., the Federal Circuit held that a subsequent Paragraph IV Abbreviated New Drug Application (ANDA) filer had standing to initiate a suit that could trigger the exclusivity period of the first-filer. Generic drug manufacturers who find themselves second in line for ANDA approval should consider whether their situation mirrors that in Teva, and thus whether initiating a suit to trigger a first-filer’s exclusivity period would be worthwhile.

By way of background, a manufacturer seeking to market a generic version of a previously-approved drug must file and receive approval of an ANDA and must submit a certification with respect to any patents on the drug that are listed in the FDA’s Orange Book. The first manufacturer to file a “Paragraph IV Certification” is entitled to 180 days of generic marketing exclusivity. Until the first-filer’s exclusivity period has run, the FDA may not approve ANDA applications by other manufacturers who have filed Paragraph IV certifications for the same patent. The exclusivity period begins when the first-filer commences marketing activity of the drug, or upon entry of a court judgment finding the patent invalid or not infringed, whichever happens first.

In the instant case, the Federal Circuit was asked to decide whether a subsequent Paragraph IV filer has Article III standing to seek declaratory judgment of invalidity or non-infringement and thereby trigger the first-filer’s exclusivity period. Here, the subsequent filer (Teva) sued the patent holder (Eisai) in an effort to start the 180 day window afforded to the first-filer (Ranbaxy Laboratories). The district court dismissed the case for lack of standing.

On appeal, the Federal Circuit held that a generic drug company’s injury (i.e., exclusion from the market) is fairly traceable to the patent holder’s actions because “but-for” the patent holder’s decision to list a patent in the Orange Book, FDA approval of the generic drug company’s ANDA would not have been independently delayed by that patent. The court went on to state that “when an Orange Book listing creates an ‘independent barrier’ to entering the marketplace that cannot be overcome without a court judgment that the listed patent is invalid or not infringed—as for Paragraph IV filers—the company manufacturing the generic drug has been deprived of an economic opportunity to compete.” The court thus found that Teva had Article III standing for a declaratory judgment suit because such a suit redresses this alleged injury by eliminating the potential for the corresponding listed patent to exclude the generic drug from the market.

Industry Standard Compliance as Evidence of Infringement –
Fujitsu Limited v. Netgear Inc. (September 20, 2010)

The Federal Circuit in Fujitsu Limited v. Netgear Inc. held that an accused product’s compliance with an industry standard covered by an asserted claim can be evidence of infringement. The court’s holding should help dramatically reduce the time and cost required to litigate cases involving standards-compliant accused products.

The plaintiffs, Fujitsu, Phillips, and LG, sued Netgear for infringement of their respective patents directed to wireless communication technologies. Each of the patents related to at least one of two popular wireless standards: the “IEEE 802.11 Standard” and the “WMM Specification.” The plaintiffs are part of a licensing pool that purports to include patents that any manufacturer of 802.11 and WMM compliant products must license.

After claim construction, the plaintiffs moved for summary judgment of infringement, arguing that by simply complying with the standard, Netgear necessarily infringed the asserted claims. The district court denied the motion, holding that the plaintiffs must show evidence of infringement for each accused product.

On appeal, the Federal Circuit held that a district court may rely on an industry standard in analyzing infringement. If the district court construes the claims and finds that the reach of the claim includes any device that practices a standard, then this can be sufficient for a finding of infringement. The court reasoned that, while claims should be compared to an accused product, if the accused product operates in accordance with a standard, then comparing the claims to that standard is the same as comparing the claims to the accused product. In addition, the court found that public policy favored such an approach, as it would be a waste of judicial resources to separately analyze every accused product when it is undisputed that the accused products practice the standard. The court recognized that an accused infringer is of course free to either prove that the claims do not cover all implementations of the standard, or to prove that its product does not practice the standard.

The court further noted that, in some cases, the standard may not provide the level of specificity required to establish that practicing the standard would always result in infringement. Likewise, when the relevant section of the standard is optional, then standards compliance alone would not establish that that accused product implements the optional section. Because the instant case involved one of these exceptions, the district court’s denial of summary judgment was affirmed.

This advisory was prepared by Nutter's Intellectual Property practice. For more information, please contact your Nutter attorney at 617.439.2000.

 

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