Posts Tagged: "Judge Kathleen O’Malley"

In re: Natural Alternatives, LLC, 2015-1911 (opinion and errata) is a non-precedential but still notable case from the U.S. Court of Appeals for the Federal Circuit that finds the claims of a patent that was in reexamination to be patentable, despite the examiner and the Patent Trial and Appeal Board finding that the claims were obvious. While the examiner had cobbled together various references to make an obviousness rejection, the examiner failed to set forth “sufficient facts” supporting his position that the prior art disclosed the limitations of Natural’s claims in a manner that renders the claimed invention obvious.

In the final decision by the Board in the IPR, the Board denied the patent owner’s motion solely because the patent owner did not discuss whether each newly added feature was separately known in the prior art. The Board concluded that the motion and the declaration of Veritas’s expert, Dr. Levy, was insufficient because it did not discuss the features separately but discuss only the newly added feature in combination with other known features. The Federal Circuit found that denying the motion to amend for this reason alone was unreasonable and, therefore, the decision of the Board had to be set aside as being arbitrary and capricious.

The Court recognized that “‘[c]ommon sense has long been recognized to inform the analysis of obviousness if explained with sufficient reasoning.’” However, “there are at least three caveats to note in applying ‘common sense’ in an obviousness analysis.” First, common sense is typically invoked to provide a known motivation to combine, and not to supply a missing claim limitation. Second, while some cases have allowed use of common sense to supply a missing claim limitation, “the limitation in question was unusually simple and the technology particularly straightforward.” Third, common sense “cannot be used as a wholesale substitute for reasoned analysis and evidentiary support, especially when dealing with a limitation missing from the prior art references specified.”

On appeal, the Federal Circuit reviewed whether there was substantial evidence supporting the district court’s finding that Nathan and Matheson should be added as co-inventors. In determining that the inventorship evidence below was sufficient, the Court reiterated that all inventors are required to be named even if their contribution is limited to a single aspect of a single claim, and that co-inventors need not have collaborated at the same time to be named.

The Federal Circuit again addressed whether Pulse’s domestic sales activities were either a sale or an offer for sale in the U.S. While the patent statute does not define “sale,” the Court has previously held that it carries its ordinary meaning, including the transfer of title or property. Further, a “sale” must be understood in view of the strong policy against extraterritorial liability for patent infringement. Here, no sale occurred in the U.S., because the final formation of a contract and all elements of performing the contract occurred outside the U.S.

O’Malley recognized that in Perfect Web the Federal Circuit did authorize the use of common sense to supply a missing claim limitation, but she pointed out that this was the only case where that has been done. O’Malley further explained that in Perfect Web that which was missing was “unusually simple and the technology particularly straightforward.” In fact, in Perfect Web, which dealt with sending e-mail to an e-mail list, the missing claim limitation was nothing more than merely repeating the step of resending e-mails in accordance with the claim. Thus, O’Malley explained that Perfect Web is properly considered an exception to allowing common sense to supply a missing claim limitation, rather than the rule.

Under the Federal Circuit’s reading of Halo, companies can no longer rely solely on reasonable litigation-inspired defenses to prevent a finding of willfulness… The Federal Circuit also found that the district court abused its discretion in failing to issue a permanent injunction. While there is a public interest in safer generators, there is also a public interest in the security of patent rights. The patent owner presented evidence that it had sufficient production abilities to satisfy market demand for the product. Finally, in similar contexts, Congress has expressly indicated that permanent injunctions may issue to prevent infringement of other life-saving goods like pharmaceuticals.

The Federal Circuit reversed the Board’s obviousness ruling, finding that the Board had improperly shifted burdens onto Magnum, the Patent Owner, in several instances. For example, Petitioner McClinton asserted that a motivation to combine argument made with respect to a first set of prior art references was also applicable to a second set of prior art references, but did not explain why the rationale applied to both sets of references. The Federal Circuit found that the Board improperly “expected [the Patent Owner] to explain, and faulted [the Patent Owner] for allegedly failing to explain” why the motivation to combine argument made by Petitioner based on the first set of prior art references would not be applicable to the second set of prior art references. The Board’s obviousness finding thus constituted an improper shifting of the burden to Magnum, the patentee, to prove that the claimed invention would not have been obvious.

This case arrived at the Federal Circuit on an appeal brought by BASCOM from the district court’s decision to grant a motion to dismiss under Rule 12(b)(6). In the majority opinion Chen made much of the civil procedure aspects of a 12(b)(6) motion, as well he should. Frankly, it is about time that the Federal Circuit notice that these patent eligibility cases are reaching them on motions to dismiss. This should be overwhelmingly significant in virtually all cases given that a motion to dismiss is an extraordinary remedy in practically every situation throughout the law. Simply put, judges are loath to dismiss cases on a motion to dismiss before there has been any discovery or any issues are considered on their merits. That is, of course, except when a patent owner sues an alleged infringer.

The Federal Circuit found that the specification explicitly supported the district court’s claim construction, which precluded a finding of infringement. Two passages specified the meaning of, and provided context for, a claim term that referred to the relative location among certain claim elements. A “relative location” claim term is often read in light of, and by relying on, the written description. Because the district court’s claim construction was proper, the Court found the grant of summary judgment of non infringement was proper.

The Court noted that decisions related to compliance with the Board’s procedures are reviewed for abuse of discretion. As far as the “reasonable expectation of success” requirement, the Court noted that the Board improperly looked to whether one would reasonably expect the references to operate as those references intended once combined. The Court held that this was the incorrect standard, and instead one must have the motivation to combine with the expectation of achieving what is claimed in the patent-at-issue. The Court held, however, that while the Board conflated the reasonable expectation of success standard and motivation to combine, it nonetheless made sufficient factual findings to support its judgment that the claims at issue were not invalid.

The Federal Circuit held that Mylan Pharmaceuticals, Inc. (“Mylan”), a generic drug manufacturer, was subject to specific personal jurisdiction in Delaware because Mylan had filed an abbreviated new drug application (“ANDA”) and “contemplate[d] plans to engage in marketing of the proposed generic drugs” in the state.[1] The ruling affirmed two different decisions by judges in the United States District Court for the District of Delaware that Mylan was subject to specific jurisdiction in Delaware.[2] However, as noted below, it looks like Mylan intends to seek panel or en banc rehearing and possibly pursue a petition for certiorari if the Federal Circuit does not grant the rehearing or re-hears the case and continues to find personal jurisdiction.

Over the course of several amendments, Disney granted increasing rights to Candella, by which Disney specifically intended to give Candella standing to sue for patent infringement. The court held that the rights retained by Disney were not “substantial rights” sufficient to deprive Candella of standing, because Disney did not retain a right to exclude. Disney merely had a financial interest in any enforcement efforts by Candella. Thus, Candella did not have to join Disney to maintain the lawsuit.

The Court noted that the Board failed to account for how the claims and specification inform the ordinary skilled artisan as to what ordinary definition the patentee was using. The Court noted that just because “around” has several dictionary definitions does not mean all these meanings were reasonable in light of the specification. The Court argued that all of the components of the cable connectors encircled an inner electrical conductor, and thus it would seem odd to construe “reside around” without recognizing the context of its use in terms of the cable.

The Federal Circuit took the case en banc to review the applicability of the patent exhaustion doctrine under Mallinckrodt and Jazz Photo, in view of the Supreme Court’s decisions in Quanta and Kirtsaeng. The Federal Circuit affirmed the holdings in Mallinckrodt and Jazz Photo, and distinguished them from the Supreme Court’s decisions. In Quanta, the Supreme Court was reviewing whether a patentee’s rights in a product were exhausted by a licensee’s sale of a product.