Posts Tagged: "validity"

On Thursday, September 28th, a judge in the District of Delaware entered an order stipulating dismissal in a patent infringement case brought by North Chicago-based pharmaceutical firm AbbVie (NYSE:ABBV) against Thousand Oaks, CA-based drugmaker Amgen (NASDAQ:AMGN). According to reports, the settlement follows an agreement between the two companies to delay a generic version of the anti-inflammatory drug Humira from the U.S. market until 2023… Of AbbVie’s total $6.94 billion in net revenues from U.S. and international sales during the quarter, Humira contributed $4.71 billion in revenues.

A few dozen amici briefs have been filed in the case, including one filed on August 30th by 39 patent owners affected by PTAB activities in support of the petitioner Oil States. These patent owners have either already or are currently faced PTAB validity trials challenging their patents through inter partes review (IPR) or other post grant review (PGR) proceedings. The amici argue that the affected patent owners are in a unique position to provide perspective to the Supreme Court on the question of extinguishing patent rights through a non-Article III forum.

On Monday, August 7th, a judicial panel of the U.S. Court of Appeals for the Federal Circuit entered a decision in Personal Audio, LLC v. Electronic Frontier Foundation which is being widely hailed by the anti-patent crowd. The three judges on the panel issued a majority opinion, authored by Circuit Judge Pauline Newman, upheld a final written decision issued by…

The General Court of the Court of Justice of the European Union (CJEU) has dismissed an appeal from the unsuccessful application by Arrigo Cipriani (Arrigo) to have Hotel Cipriani’s EU trade mark (EUTM) for CIPRIANI, registered for hotel services among other things, declared invalid on the grounds that (i) it was registered in bad faith and (ii) that, under national Italian law, Arrigo had a prior right to that name… The CJEU affirmed the test for bad faith and the principle that extending the protection of a national mark by registering an EUTM is part of an undertaking’s normal commercial strategy. The fact that the Registrant had an earlier, identical national mark, which Arrigo did not oppose or object to, contributed to the finding that there was no bad faith. In any case, bad faith remains a high threshold to prove and if owners have EU national rights, which were never challenged by the invalidity applicant, this could further add to the difficulty of proving bad faith by the registrant.

So obviously the patent claims VirnetX has used to pursue infringers such as Apple and Microsoft are not the weak patents that opponents of the patent system claim are the scourge of the system. Well — not so fast! Just because an Article III federal district court confirms the validity of a patent doesn’t mean anything anymore. Indeed, federal courts have become subordinate to the PTAB, which is as ridiculous as it sounds but sadly true. A patent is not valid until an Article I executive tribunal says so, and absolutely no deference is paid to Article III judges of the United States federal courts.

The United States Patent Trial and Appeal Board (“PTAB”) recently dismissed another inter partes review (“IPR”) based on an assertion of 11th Amendment sovereign immunity.  This decision demonstrates the willingness of the PTAB to permit State agencies (such as public universities, medical schools, and research centers) to effectively shield their patents from the threat of post-grant proceedings at the PTAB.  While this is certainly a benefit to entities that can take advantage of sovereign immunity, it does not completely insulate government-held patents from any validity challenge, as more traditional approaches of invalidating patents still remain viable avenues for those accused of infringement.

The Eastern District of Texas granted a preliminary injunction against Aurobindo in favor of Mylan in the case of Mylan Institutional LLC v. Aurobindo Pharma Ltd. On appeal at the Federal Ciruit, Aurobindo challenged three district court findings: 1) it was likely that Aurobindo infringed; 2) Aurobindo failed to raise a substantial question of validity; and 3) there was irreparable harm to Mylan. The Federal Circuit found that, while the district court made some errors, it correctly analyzed one of the three Mylan patents, and the preliminary injunction was affirmed.

Activist Supreme Court decisions in the last decade have been principally responsible for these changes, stimulated by aggressive technology company incumbent lobbying. The combination of these decisions has had a far greater effect on the patent system and the economy than the Court originally intended. The U.S. is now in a compulsory licensing regime in which large technology incumbents that control at least 80% of collective market share employ an “efficient infringement” model of ignoring patents and forcing patent holders to enforce patent rights in the courts.

This case concerns ongoing disputes between Power Integrations and Fairchild Semiconductors. The companies sued each other in Delaware, each asserting infringement of multiple patents by the other. At issue were power supply controller chips used ubiquitously in modern electronics, the patents related to those chips, and how power is supplied and regulated from the upstream source to the downstream electronic device… Induced infringement requires successful communication between the alleged inducer and the third-party infringer; it is not sufficient in itself that others directly infringed the asserted claims.

Perhaps the most challenging to accept is the notion that a tribunal created with a specific purpose of invalidation can be impartial to both the petitioners and the defendants. The AIA tribunal stands in contrast to the Court system, as their inherent mission is not to evaluate, but to challenge, contest, and invalidate. In addition, a “winners and losers” system, allowing one party to outspend the other, or to create joinders to outnumber the other, remains very damaging to the inventors, investors and small businesses.

The patent market had an amazing bull run from the late 1980’s through 2012. The peak was 2011 to 2012 when we saw a number of multi-billion dollar patent sales and patent-driven acquisitions. The patent market started slowing down substantially shortly thereafter. Many blame the America Invents Act (AIA), which introduced a variety of ways to inexpensively challenge the validity of patents in administrative proceedings at the patent office. All of a sudden the confidence that once a patent was issued it was valid was shaken. However, the AIA was only part of the problem.