There were numerous decision made by the United States Court of Appeals for the Federal Circuit in 2017. What follows is a brief summary of the most noteworthy decisions from 2017.
Federal Circuit Clarifies “Injury in Fact” Standing to Challenge Final Agency Decision in IPR
Phigenix, Inc. v. ImmunoGen, Inc., 845 F.3d 1168 (2017) (Fed. Cir. 2017) (Before Dyk, Wallach, and Hughes, J.) (Opinion for the court, Wallach, J.).
In appealing from a final IPR decision, the appellant must have standing, based on evidence of record or supplemental evidence showing an “injury in fact.” Alleged economic injury must be specific and proven, and does not arise just from statutory appeal provisions or from IPR litigation estoppel when appellant’s infringement of the challenged patent is not a potential issue.
Teva Liable for Induced Infringement of Eli Lilly’s Lung Cancer Drug ALIMTA
Eli Lilly and Company v. Teva Parenteral Medicines, 845 F.3d 1357 (2017) (Fed. Cir. 2017) (Before Prost, C.J., Newman, and Dyk, J.) (Opinion for the court, Prost, C.J.).
The Federal Circuit’s decision in Akamai V broadened the circumstances in which the actions of others may be attributed to a single actor to support liability for direct infringement. Here, a patent that claims a method of administering treatment can be directly infringed if a physician performs some of the claimed steps and the patient performs the other steps under the physician’s direction and control. The infringement is induced by the drug manufacturer when it unambiguously encourages the performance of the infringing steps, as in its labeling for the drug.
Federal Circuit Affirms Grant of Preliminary Injunction to Patent Owner
Metalcraft of Mayville, Inc. v. Toro Co., 848 F.3d 1358 (2017) (Fed. Cir. 2017) (Before Moore, Hughes, and Stoll, J.) (Opinion for the court, Moore, J.).
A preliminary injunction was appropriate when non-infringement depended on an erroneous claim construction; the evidence did not show the proposed combination of references for non-obviousness was enabled; irreparable harm was likely despite other competition; and the injunction tipped in favor of the public interest.
Federal Circuit Further Clarifies the Covered Business Method Patent Determination
Secure Axcess, LLC v. PNC Bank Nat’l Ass’n, 848 F.3d 1370 (2017) (Fed. Cir. 2017) (Before Lourie, Plager, and Taranto, J.) (Opinion for the court, Plager, J.) (Dissenting opinion filed by Lourie, J.).
The CBM determination includes patents that are “financial in nature” according to the claims; not patents that are “complementary” or “incidental” to financial activity according to the specification or post-grant assertion of the patent.
Federal Circuit Finds Board’s Claim Construction “Overly Broad”
L.A. Biomedical Research Inst. at Harbor-UCLA Med. Ctr. v. Eli Lilly & Co., 849 F.3d 1049 (2017) (Fed. Cir. 2017) (Before Newman, Bryson, and Moore, J.) (Opinion for the court, Bryson, J.) (Opinion concurring in part, dissenting from the judgment filed by Newman, J.).
A broadest reasonable interpretation of claim scope should not encompass treatments that eliminate a specifically claimed condition or patient population. Likewise, a motivation to combine references could not arise from a too-broad claim construction, and when negative teachings are dismissed without proper factual findings.
Teaching Away Requires Indication that Claimed Combination Would Not Work As Intended
Meiresonne v. Google, Inc., 849 F.3d 1379 (2017) (Fed. Cir. 2017) (Before Prost, C.J., Lourie, and Moore, J.) (Opinion for the court, Moore, J.).
To reverse a finding obviousness based on overlooking a “teach away,” the evidence must show that the references discouraged the combination or implied that the resulting combination would not work as described in the patent.
Federal Circuit Reverses PTAB Anticipation Decision and Clarifies Kennametal
Nidec Motor Corp. v. Zhongshan Broad Ocean Motor Co., 851 F.3d 1270 (2017) (Fed. Cir. 2017) (Before Lourie, Moore, and Taranto, J.) (Opinion for the court, Moore, J.).
Anticipation can arise when the disclosure of a limited number of alternative combinations discloses the one that is claimed. However, a reference does not anticipate because an artisan would immediately envision a missing limitation.
Federal Circuit or District Court Validity Decisions Do Not Bind the PTAB
Novartis AG v. Noven Pharms., Inc., 853 F.3d 1289 (2017) (Fed. Cir. 2017) (Before Prost, C.J., Wallach, and Stoll, J.) (Opinion for the court, Wallach, J.).
Pursuant to Supreme Court precedent (Cuozzo Speed Techs., LLC) and Federal Circuit precedent (In re Baxter International, Inc.), Federal court validity decisions do not bind the PTAB as a matter of law, because the burden of proof is different (clear and convincing versus preponderance). They are not binding either, if the facts are different, based on different evidentiary records.
Federal Circuit Clarifies On-Sale Bar Under America Invents Act
Helsinn Healthcare S.A. v. Teva Pharms. USA, Inc., 855 F.3d 1356 (2017) (Fed. Cir. 2017) (Before Dyk, Mayer, and O’Malley, J.).
The on-sale bar, before and after the AIA, does not require a finding that the offer or sale disclosed the details or claimed features of the invention, so long as the product embodies those features when sold. An invention is reduced to practice, and ready for patenting, when it is reasonably shown to work for its intended purpose, which for a pharmaceutical product is not contingent upon FDA approval.
PTAB Reversed for Failing to Explain Basis for its Obviousness Decision
Rovalma v. Bohler-Edelstahl GmbH & Co. KG, 856 F.3d 1019 (2017) (Fed. Cir. 2017) (Before Wallach, Taranto, and Stoll, J.) (Opinion for the court, Taranto, J.).
A final written decision by the Board in an inter partes review will be overturned if the Board does not explain its reasoning for finding the asserted claims unpatentable in sufficient detail. A final written decision may also be overturned if the Board relies on arguments and evidence submitted by a party in its patentability decision but does not give the submitting party adequate notice of its intent to rely on the evidence or an opportunity to respond with rebuttal evidence.
Supreme Court Reverses Federal Circuit on Venue for Patent Infringement Suits
TC Heartland LLC v. Kraft Foods Grp. Brands LLC, 137 S.Ct. 1514 (2017) (THOMAS, J., delivered the opinion of the Court, in which all other Members joined, except GORSUCH, J., who took no part in the consideration or decision of the case.).
A domestic defendant in a patent infringement case can only be sued in a district where the defendant resides, or where the defendant has committed acts of infringement and has a regular and established place of business. A domestic defendant in a patent case “resides” only in its state of incorporation. Thus, personal jurisdiction over the defendant is insufficient, by itself, to establish proper venue in a patent infringement case.
Diagnostic Patents Affirmed as Ineligible Under §101; Treatment Patent Dismissed
Cleveland Clinic Found. v. True Health Diagnostics LLC, 859 F.3d 1352 (2017) (Fed. Cir. 2017) (Before Lourie, Reyna, and Wallach, J.) (Opinion for the court, Reyna, J.).
Observed statistical correlations between healthy and diseased populations, such as correlating levels of an enzyme to cardiovascular disease, is not patentable subject matter. A defendant does not “contribute” to infringing a method of treatment when no material or apparatus is involved. A defendant does not “induce” infringement by knowing others might infringe; there must be evidence showing a “specific intent and action” to encourage infringing conduct.
Board Erred by Contradicting Itself, Federal Circuit Vacates Decision
Honeywell Int’l Inc. v. Mexichem Amanco Holding S.A. De C.V., 865 F.3d 1348 (2017) (Fed. Cir. 2017) (Before Lourie, Reyna, and Wallach, J.) (Opinion for the court, Lourie, J.) (Dissenting-in-part opinion, Wallach, J.).
In a patentability determination, the Board must identify the structure of a means-plus-function limitation disclosed in the specification; it is insufficient to merely disagree with patentee’s arguments. Additionally, if a practitioner reopens prosecution and amends claims during inter partes reexamination, additional prior art can be cited against the amended claims.
Court Affirms Board’s Findings of Invalidity and Clarifies Standing on Appeal
Personal Audio, LLC v. Electronic Frontier Foundation, 867 F.3d 1246 (2017) (Fed. Cir. 2017) (Before Newman, Clevenger, and O’Malley, J.) (Opinion for the court, Newman, J.).
Standing to appeal a Board determination depends on the appellant. A appellee, as in an IPR petitioner, may remain a party to an appeal brought by a party with standing (e.g. a patentee), although the appellee is a non-profit organized in the interest of the public, and would not have a “case or controversy” for standing to bring an appeal of its own.
Federal Circuit Reverses Rule 12(b)(6) Dismissal Under First Step of Alice
Visual Memory LLC v. NVIDIA Corp., 867 F.3d 1253 (2017) (Fed. Cir. 2017) (Before O’Malley, Hughes, and Stoll, J.) (Opinion for the court, Stoll, J.) (Dissenting opinion, Hughes, J.).
One way to address § 101 under Alice is to claim an improvement in a computer’s capabilities, rather than invoking a computer as a tool. For purposes of dismissal under Rule 12(b)(6), factual inferences must be drawn in favor of the non-moving party, including that a claimed technological improvement is not deemed merely abstract, despite that evidence may show it is not enabled.
Federal Government Not Barred from Petition for CBM Review
Return Mail, Inc. v. United States Postal Serv., 868 F.3d 1350 (2017) (Fed. Cir. 2017) (Before Prost, C.J., Newman, and Wallach, J.) (Opinion for the court, Prost, C.J.) (Dissenting opinion, Newman, J.).
In a case of first impression, the government qualifies as a “person” who may petition for CBM, and a party suing the government for improper use of a patented business method may be required to litigate issues before the Board in a CBM proceeding, and further the government appears to be exempt from the AIA’s CBM estoppel provision in a parallel litigation.
Federal Circuit Lacked Jurisdiction Over Dispute Based on Assignment Agreement
First Data Corp. v. Inselberg, 870 F.3d 1367 (2017) (Fed. Cir. 2017) (Before Newman, O’Malley, and Stoll, J.) (Opinion for the court, O’Malley, J.).
The Federal Circuit does not have subject matter jurisdiction to review state law claims seeking a declaration that an assignment of patent rights was invalid. The Federal Circuit does not have jurisdiction to review a district court order remanding state law claims to the state court from which the case was removed if the district court remanded the case for lack of subject matter jurisdiction over the claims.
Working From Home Do Not Establish Place of Business for Venue Under TC Heartland.
In Re: Cray, Inc., No. 2017-129, 2017 U.S. App. LEXIS 18398 (Fed. Cir. 2017) (Before Lourie, Reyna, and Stoll, J.) (Opinion for the court, Lourie, J.).
In determining venue in a patent infringement case, the location of defendant’s employees who work from home is not a regular and established place of defendant’s business, when the defendant corporation has no material connection to that place, as by rent, inventory, conditioning employment based on the location, or other relevant facts.
Burden of Persuasion for Patentability of Amended Claims in IPR Stays with Petitioner.
Aqua Prods. v. Matal, No. 2015-1177, 2017 U.S. App. LEXIS 19293 (Fed. Cir. 2017) (Before Prost, C.J., Newman, Lourie, Dyk, Moore, O’Malley, Reyna, Wallach, Taranto, Chen and Hughes, J.) (Opinion filed by O’Malley, J., Newman, Lourie, Moore, and Wallach, J. join and Dyk, Reyna, J. concur in result) (Opinion filed by Moore, J., Newman and O’Malley join) (Opinion filed by Reyna, J., Dyk join and Prost, C.J., Taranto, Chen, and Hughes, J. join in part) (Opinion filed by Taranto, J., Prost, C.J., and Chen and Hughes, J. join dissenting from the judgment, Dyk and Reyna, J. join in part in other respects) (Opinion dissenting from the judgment, Hughes, J., Chen, J. joins).
With respect to the burden of proof, the burden of persuasion for patentability of amended claims in an IPR proceeding is placed on the petitioner, not the patent owner. However, considering Judge Reyna’s concurrence, patent owners might still have the burden of production; depending on future cases.
Patent-Ineligible Claims Dismissed Via FRCP 12(b)(6), Based On Intrinsic Evidence,
Secured Mail Solutions LLC v. Universal Wilde, Inc., No. 2016-1728, 2017 U.S. App. LEXIS 20105 (Fed. Cir. Oct. 16, 2017) (Before Prost, C.J., Clevenger, and Reyna, J.) (Opinion for the court, Reyna, J.).
Claims determined to be patent-ineligible based on intrinsic evidence from the specification can be dismissed, at the motion to dismiss stage, without need for “extraneous fact finding outside the record.”
Federal Circuit Clarifies Standard for Indefiniteness of Mixed Subject Matter Claims
Mastermine Software, Inc. v. Microsoft Corp., No. 2016-2465, 2017 U.S. App. LEXIS 21479 (Fed. Cir. 2017) (Before Newman, O’Malley, and Stoll, J.) (Opinion for the court, Stoll, J.).
Claims having functional elements are not indefinite, as encompassing both an apparatus and a method, if they make clear whether infringement occurs upon creating the apparatus or upon its use. A claim with functional language clearly tied to a structure that defines its capabilities is an apparatus claim; such functional language does not make the claim indefinite by also claiming a method of use.
Sufficient Inventive Concept Must Be Recited in Claim, Not Specification, to Survive Alice Patent Eligibility Inquiry
Two-Way Media Ltd v. Comcast Cable Communs., LLC, Nos. 2016-2531, 2016-2532, 2017 U.S. App. LEXIS 21706 (Fed. Cir. Nov. 1, 2017) (Before Lourie, Reyna, and Hughes, J.) (Opinion for the court, Reyna, J.).
For claims directed to judicial exceptions under § 101, a patent cannot identify a sufficient inventive concept solely in the specification and survive the Alice inquiry; the inventive concept must be found in the claims themselves in order to transform the nature of the claims into a patent-eligible application.
Recovery is Not Permitted on Damages Theories Not Presented or Preserved at Trial
Promega Corp. v. Life Techs. Corp., Nos. 2013-1011, 2013-1029, 2013-1376, 2017 U.S. App. LEXIS 22635 (Fed. Cir. 2017) (Before Prost, C.J., Mayer, and Chen, J.) (Opinion for the court, Chen, J.) Click Here for a copy of the opinion.
When seeking damages for patent infringement under 271(f)(1), a single component cannot form a “substantial portion” of a product; further, it is important not to limit or prematurely waive available theories of recovery when litigating patent damages in the trial phase.
District Courts Have Discretion to Consider TC Heartland Venue Motions in Pending Cases
In re Micron Tech., Inc., No. 2017-138, 2017 U.S. App. LEXIS 22956 (Fed. Cir. 2017) (Before Taranto, Chen, and Hughes, J.) (Opinion for the court, Taranto, J.).
The Supreme Court’s decision in TC Heartland changed the venue laws, and defendants who may have been precluded from raising a venue defense before TC Heartland may be permitted to raise a venue defense now. However, defendants may be precluded from raising a new venue defense if the defense is not timely raised, or the defendant consented to venue.