IP Law Bulletin

Arguing that its invalidated diagnostic patent claims were “collateral damage in what is properly a war on frivolously broad claims directed to things like correlation tables and actual strands of human DNA,” on August 13, 2015, Sequenom petitioned the Federal Circuit for an en banc review of its June 12 holding in Ariosa Diagnostics, Inc. v. Sequenom, Inc. In that strikingly sweeping decision, a Federal Circuit panel invalidated U.S. Patent 6,258,540 (the ’540 patent) as being directed to ineligible subject matter. Sequenom now warns that the panel decision “reads recent Supreme Court precedent to create an existential threat to patent protection for an array of meritorious inventions” beyond those in the personalized medicine and diagnostics industries:

If this Court does not step in and draw this line, the panel’s rule threatens to swallow many more meritorious inventions along with this one. The core of nearly every major innovation is the discovery of a fact about the natural world that motivates inventors to combine existing techniques to achieve new practical results.

In the recent Federal Circuit decision in Circuit Check v. QXQ Inc., the Court discusses the bounds of analogous art when considering the scope and content of the prior art in an obviousness determination. In making the determination whether a claim is obvious, the fact finder is required to decide, among other things, the scope and content of the prior art. This is because not every potential disclosure that pre-dates the invention can be considered prior art; the disclosure must be analogous to the claimed invention. It is well-established that the test for whether prior art is analogous is “if it is from the same field of endeavor or if it is reasonably pertinent to the particular problem the inventor is trying to solve.” The Federal Circuit used the Circuit Check decision to iterate that there are indeed limits to determining what is “reasonably pertinent” to the particular problem the inventor is trying to solve.

Summary: It is rare that legal decisions are reported on by “The Worldwide Leader in Sports,” but that is exactly what happened when the U.S. District Court for the Eastern District of Virginia affirmed the U.S. Patent and Trademark Office Trademark Trial and Appeal Board’s decision to cancel six trademark registrations owned by Pro-Football, Inc., which does business as The Washington Redskins.  The marks were canceled on the basis that the marks “may disparage” a “substantial composite” of Native Americans.  However, does a ruling based on these grounds fly in the face of the First Amendment?  An upcoming decision by an en banc Federal Circuit may soon tell us when it determines whether an Asian-American band is allowed to register the trademark “THE SLANTS” for entertainment in the nature of live performances by a musical band.

Summary: In Kimble v. Marvel Enterprises, Inc. 576 U.S. __ (2015), the Supreme Court relied on stare decisis, declining to overrule its 1964 Brulotte v. Thys Co. decision and holding that a patent owner cannot charge royalties for the use of an invention after the patent expires. Justice Kagan’s June 22, 2015 opinion affirmed the appellate court’s decision and maintains the status quo for patent licensing practice. As before, licensors should steer clear of Brulotte’s ban on post expiration royalties. However, the parties can use other intellectual property that is likely to live well beyond an underlying patent (e.g., trademark, trade secret) and other financial tools (e.g., amortization, partnering) to reach a competitive, mutually beneficial, and enforceable license agreement that exists beyond the life of the underlying patent.

On February 4, 2015, in In re Cuozzo Speed Technologies, LLC the Federal Circuit decided the first appeal from the Patent Trial and Appeal Board (PTAB) regarding an Inter Partes Review (IPR). Inter Partes Review is a United States Patent and Trademark Office (USPTO) proceeding created by the America Invents Act (AIA) meant to offer a more expeditious and less expensive alternative to district court litigations on validity.

Today the United States Supreme Court decided the case of Teva Pharmaceuticals USA, Inc. v. Sandoz, Inc., 574 U. S.____ (2015), which presented the question of the proper standard of review for factual findings by district courts during patent claim construction. The Court of Appeals for the Federal Circuit (CAFC), the Nation's sole appellate court for cases arising under the patent statute (Chapter 35 of the United States Code), has long held that claim construction rulings, including underlying factual findings, are reviewed de novo (that is, without deference to the district court). The Supreme Court has now partly upended that rule, holding that determinations of fact made by district courts must be reviewed for abuse of discretion, which is more deferential to the district court. The Court left alone, however, the existing de novo standard of review for the ultimate legal determination of patent claims' meanings.

While the Court noted that "[i]n some instances, a factual finding will play only a small role in a judge's ultimate legal conclusion about the meaning of [a term in a patent claim]," in other cases "a factual finding may be close to dispositive of the ultimate legal question of the proper meaning of the term in the context of the patent." In either case, "the ultimate question of construction will remain a legal question."

Because the case before it presented a potentially dispositive factual dispute regarding the meaning of a particular term to persons skilled in the art, and because the CAFC overturned the district court's determination of that dispute under the de novo standard, the Court has remanded the case back to the CAFC with the instruction to apply the less stringent abuse of discretion standard to the district court's factual findings. Thus, while the Court was careful to note that "subsidiary factfinding is unlikely to loom large in the universe of litigated claim construction," there are sure to be litigants, like those in Teva Pharmaceuticals, who will be affected by this decision.

This advisory was prepared by the Intellectual Property practice group at Nutter McClennen & Fish LLP. For more information, please contact your Nutter attorney at 617.439.2000.

This advisory is for information purposes only and should not be construed as legal advice on any specific facts or circumstances. Under the rules of the Supreme Judicial Court of Massachusetts, this material may be considered as advertising.

The Federal Circuit recently issued a decision in Antares Pharma, Inc. v. Medac Pharma, Inc. (Fed. Cir. 2014) that examined the issue of whether claims have been properly broadened in a reissue application. A patent holder can seek broadened reissue claims within a two year period from the grant of the original patent, as set forth in 35 U.S.C. § 251. However, there are restrictions on how a patentee can broaden claims during the reissue proceeding. Those restrictions include 1) the recapture rule and 2) the original patent requirement. The Court in Antares found reissue claims to be invalid for failing the original patent requirement. Under the original patent requirement, the invention claimed in the reissue application must be directed to the same invention disclosed in the original patent. The Court found that the original patent requirement mandates that newly claimed subject matter be disclosed in an explicit and unequivocal manner in the specification. In other words, the newly added claims cannot be merely suggested or indicated in the specification. In contrast, the Court noted that continuation and divisional applications are avenues for applicants to shift the scope of the claims from one invention to another without the original patent requirement of § 251.

In Octane Fitness LLC v. ICON Health & Fitness, Inc., 134 S. Ct. 1749 (2014), decided in April 2014, the Supreme Court lowered the bar for obtaining attorneys’ fees in patent infringement cases. In particular, the Supreme Court replaced the previously restrictive interpretation of an “exceptional case” that qualifies for the award of attorneys’ fees under § 285 of the Patent Act (chapter 35 of the United States Code (U.S.C.)) with a lower, more discretionary standard. We previously provided an analysis of Octane Fitness, and the related Highmark Inc. v. Allcare Health Mgmt. Sys., Inc. decision in an April 30, 2014 advisory. Since then, there has been a rash of litigants attempting to cash in on their success in intellectual property litigation of all types—including trademark and trade dress litigation brought under the Lanham Act (15 U.S.C.). Section 1117(a) of the Lanham Act includes a provision for awarding attorneys’ fees that is identical to § 285 of the Patent Act; however, because Octane Fitness only expressly addresses exceptional cases under § 285 of the Patent Act, courts are struggling with whether to replace the prevailing standard in their Circuit with the new, lower standard in cases brought under the Lanham Act. So far, courts are divided as to whether Octane Fitness applies to the Lanham Act, although a greater weight of authority exists in favor of applying the Octane Fitness standard to § 1117(a) of the Lanham Act.

In the wake of the Supreme Court’s recent decision in Alice Corp. v. CLS Bank International, a section of the patent statute once the focus of only occasional litigation is emerging as a “go to” weapon for invalidating patents directed to computer-implemented inventions. Of the 25 federal court decisions in which 35 U.S.C. § 101 (Section 101) has been invoked since Alice was handed down, 19 have resulted in declarations of invalidity. This article highlights some trends in the case law. It also examines more closely one recent Federal Circuit decision in which patent claims did not survive a preliminary challenge under Section 101, as well as the six decisions in which the claims did survive.

The equitable defense of laches may not be at the forefront of most patent practitioners’ minds, but the recent Federal Circuit decision in SCA Hygiene Products v. First Quality Baby Products illustrates that the defense can have teeth. Patent owners looking to mitigate the risk of an accused infringer successfully employing the defense should consider preventative action in the period before filing a lawsuit. Practitioners may also want to continue monitoring the law in this area, as an en banc rehearing has been requested to consider the possible impact of a recent Supreme Court ruling with regard to laches in the context of copyright infringement.