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  • Idorsia Pharmaceuticals, Ltd. v. Iancu (Fed. Cir. 2020)

    By Donald Zuhn –-

    Federal Circuit SealYesterday, in Idorsia Pharmaceuticals, Ltd. v. Iancu, the Federal Circuit affirmed a decision by the U.S. District Court for the Eastern District of Virginia granting summary judgment in favor of the U.S. Patent and Trademark Office, finding that the District Court had correctly concluded that the Office properly calculated the Patent Term Adjustment for U.S. Patent No. 8,518,912.  In particular, the District Court had determined that the Examiner's issuance of the first of three restriction requirements during prosecution of the application that issued as the '912 patent satisfied the notice requirement of 35 U.S.C. § 132, and thus ended any further accumulation of "A Delay" for the '912 patent.

    Actelion Pharmaceuticals, Ltd. — Plaintiff-Appellant Idorsia Pharmaceuticals' predecessor in interest in the '912 patent — filed U.S. Patent Application No. 12/745,358.  On March 14, 2012, the Examiner issued a restriction requirement, identifying six invention groups.  Actelion notified the Examiner by telephone that the invention groups omitted subject matter from the scope of the claims (but without electing any of the invention groups).  The Examiner agreed, indicated that a new restriction requirement would be issued, and then issued a new restriction requirement on April 18, 2012 (35 days after the first restriction requirement).  In the second restriction requirement, which superseded and replaced the first restriction requirement, the Examiner identified eight invention groups.  Acetelion again notified the Examiner by telephone that the invention groups omitted subject matter from the scope of the claims (but without electing any of the invention groups).  The Examiner again agreed, indicated that a new restriction requirement would be issued, and issued a new restriction requirement on June 21, 2012 (64 days after the second restriction requirement).

    The '358 application eventually issued as the '912 patent, and the Office determined that the PTA was 314 days, which included 229 days of A delay.  Actelion requested reconsideration of that PTA determination, and the Office issued a final decision determining that the PTA for the '912 patent was 346 days, including 261 days of A Delay, with the Office determining that the Examiner's second restriction requirement stopped the accrual of A delay.  Actelion filed suit in the Eastern District of Virginia, challenging the Office's PTA determination, and the District Court remanded the case to the USPTO to reconsider its PTA determination in light of Pfizer, Inc. v. Lee.  On remand, the Office determined that Actelion was entitled to 311 days of PTA, including 226 days of A Delay, with the Office determining that the Examiner's first restriction requirement stopped the accrual of A delay.

    In Pfizer, Inc. v. Lee, the Federal Circuit affirmed the finding by the District Court for the Eastern District of Virginia that the USPTO properly calculated the PTA for Pfizer's U.S. Patent No. 8,153,768 (see "Pfizer, Inc. v. Lee (Fed. Cir. 2016)").  In calculating the PTA, the USPTO denied Pfizer 197 days between the time the Examiner issued a first restriction requirement and then, after the applicant noted that the Examiner had omitted claims 75, 76, and 103-106, issued a corrected restriction requirement.  Noting that the applicant "could have taken direction for the[] classification [of the six omitted claims] from the fact that their respective independent claims were each included in the initial restriction requirement," the panel majority sided with the District Court and USPTO.

    In the instant case, Idorsia challenged the Office's decision on remand, arguing that A Delay continued to accrue for 99 days until the third restriction requirement was issued because the first and second restriction requirements did not meet the notice requirement of 35 U.S.C. § 132.  Idorsia and the Office each moved for summary judgment, with the District Court granting summary judgment in favor of the USPTO, finding that the first restriction requirement complied with the notice requirement of § 132 based on the standard set forth in Pfizer.  Idorsia appealed.

    On appeal, the Federal Circuit determined that under Pfizer, the Examiner's first restriction requirement stopped the accrual of A delay because the first restriction requirement met the notice requirement of § 132.  Citing 35 U.S.C. § 154(b)(1)(A)(i), the Court noted that "A Delay stops accruing when the PTO 'provide[s] at least one of the notifications under section 132,'" and citing Pfizer, the Court noted that "[a] written restriction requirement qualifies as a 'notification[] under section 132.'"  The Court explained, again citing Pfizer, that "§ 132 'is violated when a rejection is so uninformative that it prevents the applicant from recognizing and seeking to counter the grounds for rejection.'"  According to the opinion, "the parties' dispute focuses on whether the first restriction requirement was 'sufficiently informative to allow [Actelion] to counter the grounds for rejection.'"  The Federal Circuit "agree[d] with the district court and the PTO that under Pfizer, the examiner's first restriction requirement for the '912 patent satisfied the notice requirement of § 132."  In particular, the Court stated that "[t]he examiner's first restriction requirement asserted that all pending claims of the '358 application were subject to the restriction requirement," noting that "Actelion was able to respond to the first restriction requirement and successfully oppose the examiner's description of the multiple invention groups, which demonstrates that Actelion was able to understand the examiner's proposed invention groups and prepare responsive arguments."

    Idorsia argued that the first and second restriction requirements violated § 132 because "Actelion plainly lacked the necessary information to determine how to proceed," and attempted to distinguish Pfizer on the ground that the restriction requirement at issue in Pfizer omitted dependent claims and not subject matter from independent claims.  The Federal Circuit, however, rejected Idorsia's "overly narrow reading of Pfizer," stating that "[a] restriction requirement need not be correct to satisfy the statutory notice requirement," and adding that "Actelion's and the examiner's 'exchanges concerning the challenged restriction requirement were part of the typical 'back and forth' process of patent prosecution,'" citing Pfizer.  The Court also stated that "[a]lthough this process 'often involves changes in both the applicant's and examiner's positions, an examiner's reissuance of an office action in response to an applicant's suggestion does not automatically mean that an application has been 'delayed' for purposes of patent term adjustment,'" again citing Pfizer.  Agreeing with the USPTO and District Court that "Idorsia's alleged delay is 'not the type of error for which the Act was intended to compensate'" (again citing Pfizer), the Federal Circuit determined that the USPTO properly calculated the PTA for the '912 patent, and concluded that the District Court did not err in granting summary judgment in favor of the USPTO.

    Idorsia Pharmaceuticals, Ltd. v. Iancu (Fed. Cir. 2020)
    Nonprecedential disposition
    Panel: Circuit Judges Chen, Hughes, and Stoll
    Opinion by Circuit Judge Stoll

  • Eagle Pharmaceuticals Inc. v. Slayback Pharma LLC (Fed. Cir. 2020)

    By Kevin E. Noonan —

    Federal Circuit SealInfringement under the doctrine of equivalents (as a basis of a successful cause of action having renewed vigor before the Federal Circuit recently (see, e.g., "Galderma Laboratories, L.P. v. Amneal Pharmaceuticals LLC") is most frequently rebutted by the doctrine of prosecution history estoppel ("Pharma Tech Solutions, Inc. v. Lifescan, Inc.").  This is not the only defense available to an accused infringer; its sister doctrine, of dedication-disclosure, can be equally effective under circumstances where a patentee has disclaimed aspects or embodiments that could fall within the scope of equivalents but was disclaimed to avoid prior art, for lack of utility, or insufficiency of disclosure under 35 U.S.C. § 112.  Last Friday, the Federal Circuit applied the dedication-disclosure doctrine to affirm the District Court's dismissal on the pleadings of plaintiff Eagle Pharmaceuticals' infringement allegations under the doctrine of equivalents in Eagle Pharmaceuticals Inc. v. Slayback Pharma LLC.

    The case arose in ANDA litigation over Eagle's bendamustine formulation (BELRAPZO®).  Eagle asserted U.S. Patent Nos. 9,265,831; 9,572,796; 9,572,797; and 10,010,533 in the litigation; claim 1 of the '796 patent was considered representative by the parties and hence the Court:

    1.  A non-aqueous liquid composition comprising:
        bendamustine, or a pharmaceutically acceptable salt thereof;
        a pharmaceutically acceptable fluid comprising a mixture of polyethylene glycol and propylene glycol, wherein the ratio of poly- ethylene glycol to propylene glycol in the pharmaceutically acceptable fluid is from about 95:5 to about 50:50; and
        a stabilizing amount of an antioxidant;
        wherein the composition has less than about 5% total impurities after 15 months of storage at about 5° C., as calculated on a normalized peak area response basis as determined by high performance liquid chromatography at a wavelength of 223 nm.

    The emphasized limitation was the basis of the dispute, Slayback conceding that in all other respects its competing generic formulation literally infringed Eagle's claims.  Eagle contended in its complaint that that term was infringed under the doctrine of equivalents, wherein the ethanol used in Slayback's product was equivalent to Eagle's polyethylene glycol.  Slayback countered with a motion under Fed. R. Civ. Pro. 12(c) that Eagle was barred by the dedication-disclosure doctrine from prevailing on its doctrine of equivalents allegation, because the '796 specification (and the specifications of all the other asserted patents) disclosed but did not claim ethanol-containing embodiments.

    Set forth in the Federal Circuit's opinion, as relied upon by the District Court, are almost a half dozen citations to the specification reciting ethanol as a "pharmaceutically acceptable fluid" used in the claimed formulation (including ones where ethanol is a dreaded "preferred" embodiment).  Eagle countered by asserting that ethanol was properly a component of the claimed invention only in the presence of chloride salts (which were not claimed) and not in the claimed embodiments comprising an antioxidant.  Eagle supported its assertions with a declaration from an expert witness that the skilled worker would appreciate this distinction and understand that patentee had not disclaimed ethanol-comprising embodiments, properly formulated; there was no rebuttal of this testimony by Slayback.  Refusing to consider the expert's testimony (and opining that Eagle was attempting to "manufacture a factual dispute"), the District Court held for Slayback and granted its motion to dismiss as a matter of law; this appeal followed.

    The Federal Circuit affirmed, in an opinion by Judge Reyna, joined by Judges O'Malley and Chen.  The opinion sets out the relationship between the doctrine of equivalents as defined by the Supreme Court in Graver Tank & Mfg. Co. v. Linde Air Prods. Co., 339 U.S. 605 (1950), and Warner-Jenkinson Co. v. Hilton Davis Chem. Co., 520 U.S. 17 (1997), and its limitation by the disclosure-dedication doctrine in Johnson & Johnston Assoc. v. R.E. Servs., 285 F.3d 1046 (Fed. Cir. 2002) (en banc).  The equitable principle of the doctrine recognized by the Court is that it "reinforces 'the primacy of the claims in defining the scope of the patentee's exclusive right.'"  To be properly applied, the specification must "disclose[] unclaimed subject matter with 'such specificity that one of ordinary skill in the art could identify the subject matter that had been disclosed and not claimed,'" citing PSC Comput. Prods., Inc. v. Foxconn Int'l, Inc., 355 F.3d 1353, 1360 (Fed. Cir. 2004).

    The panel appreciated Eagle's challenge to be procedural, regarding whether the District Court properly dismissed its complaint on the pleadings, as well as on the merits of whether plaintiff had disclaimed ethanol-comprising embodiments by disclosing but not claiming them.  The Court recognized that Eagle claimed its bendamustine formulations were disclosed in three alternatives:  "(i) chloride salt formulations; (ii) antioxidant formulations; and (iii) dimethyl sulfoxide ("DMSO") formulations," and that ethanol was an alternative only in the "unclaimed chloride salt formulations" (emphasis in opinion).  According to Eagle, the skilled worker would appreciate that distinction and that it had not disclaimed ethanol as an equivalent to polyethylene glycol in other formulations.  As pithily put in the opinion, the Court "disagreed."

    Citing Johnson, the opinion asserts that "[t]he disclosure-dedication doctrine does not require the specification to disclose the allegedly dedicated subject matter in an embodiment that exactly matches the claimed embodiment"; indeed, according to the opinion the patentee made arguments (unsuccessfully) in that case similar to Eagle's arguments here.  The issue of whether the disclosure-dedication doctrine applies is resolved "only [where] the specification disclose[s] the unclaimed matter 'as an alternative to the relevant claim limitation,'" citing Pfizer, Inc. v. Teva Pharm. USA, Inc., 429 F.3d 1364, 1378 (Fed. Cir. 2005).  The panel found no qualifications in the specification as now asserted by Eagle regarding limitations to where ethanol is or is not an alternative to polyethylene glycol.  The Court was "not persuaded" that the facts here track those in Pfizer (where the Court deigned not to apply the doctrine), on the grounds that in Pfizer the limitation in dispute was directed to a unique, specific purpose ("a suitable amount of a saccharide to inhibit hydrolysis"; emphasis in opinion) whereas in this case the alternatives all have only one purpose (i.e., to be "pharmaceutically acceptable").

    Turning to Eagle's procedural objections, the opinion sets these forth as 1) there was a factual dispute that precluded judgment; 2) the District Court did not draw all inferences in non-movant Eagle's favor; and 3) the District Court did not consider its proffered expert's testimony.  In rejecting these contentions, the opinion notes that considering evidence (like Eagle's expert's) outside the pleadings is within the District Court's discretion (and in doing so converts the motion to be one for summary judgment), citing Kulwicki v. Dawson, 969 F.2d 1454, 1462 (3d Cir. 1992), and 5C WRIGHT & MILLER, FED. PRAC. & PROC. CIV. § 1371 (3d ed.).  The standard of review is thus abuse of discretion and the panel found no such abuse in relying on the disclosure in the asserted patents themselves.  Nor was there any error in deciding the issue as a matter of law, and the opinion states that "[e]xpert testimony is not always required for a district court to determine how a skilled artisan would understand a patent's disclosure and claimed invention," citing Union Carbide Corp. v. Am. Can Co., 724 F.2d 1567, 1573 (Fed. Cir. 1984), and Amgen Inc. v. Coherus BioSciences Inc., 931 F.3d 1154, 1160 (Fed. Cir. 2019).

    Finding these and all other Eagle arguments unpersuasive, the Federal Circuit affirmed.

    Eagle Pharmaceuticals Inc. v. Slayback Pharma LLC (Fed. Cir. 2020)
    Panel: Circuit Judges O'Malley, Reyna, and Chen
    Opinion by Circuit Judge Reyna

  • U.S. Trade Representative Releases 2020 Special 301 Report

    By Kevin E. Noonan —

    U.S. Trade RepresentativeOn April 29th, Ambassador Robert Lighthizer, U.S. Trade Representative (USTR), issued the 2020 Special 301 Report.  In a press release, the USTR stated that "[t]he Trump Administration is committed to holding intellectual property rights violators accountable and to ensuring that American innovators and creators have a full and fair opportunity to use and profit from their work."  The press release also asserts that "[o]ver the last year, USTR has secured strong and enforceable obligations on intellectual property in our historic agreements with China, Canada, and Mexico.  The two reports issued today illustrate the Administration's commitment to protecting intellectual property rights and combatting counterfeiting and piracy in online and physical markets."

    According to the Executive Summary of the Report, "[a] top trade priority for the Administration is to use all possible sources of leverage to encourage other countries to open their markets to U.S. exports of goods and services, and provide adequate and effective protection and enforcement of U.S. intellectual property (IP) rights."  In tune with the more combative rhetoric on trade adopted by the Trump Administration, the Summary repeats last year's exhortation that:

    This Report provides an opportunity to call out foreign countries and expose the laws, policies, and practices that fail to provide adequate and effective IP protection and enforcement for U.S. inventors, creators, brands, manufacturers, and service providers.  The identification of the countries and IP-related market access barriers in the Report and of steps necessary to address those barriers are a critical component of the Administration's aggressive efforts to defend Americans from harmful IP-related trade barriers.

    The Report cites four countries for particular consideration upon being placed on the Priority Watch List.  Regarding China, the Report characterizes placement on the list due to "U.S. concerns with China's system of pressuring and coercing technology transfer, and the continued need for fundamental structural changes to strengthen IP protection and enforcement, including as to trade secret theft, obstacles to protecting trademarks, online piracy and counterfeiting, the high-volume manufacturing and export of counterfeit goods, and impediments to pharmaceutical innovation."  The Report states that "[o]ver the past year, the United States' engagement of China began to demonstrate key progress with the signing of the U.S.– China Economic and Trade Agreement in January 2020, which the Report maintains "requires changes in China's acts, policies, and practices, including structural reforms and other changes to China's legal and regulatory regime to address numerous longstanding concerns of a wide range of U.S. industries."

    India is cited (again) for "lack of sufficient measurable improvements to its IP framework on long-standing and new challenges that have negatively affected U.S. right holders over the past year," which include ones that "make it difficult for innovators to receive and maintain patents in India, particularly for pharmaceuticals, insufficient enforcement actions, copyright policies that do not properly incentivize the creation and commercialization of content, and an outdated and insufficient trade secrets legal framework."  The Report newly asserts that,"[i]n addition to these long-standing concerns, India also further restricted the transparency of information provided on state-issued pharmaceutical manufacturing licenses, continues to apply restrictive patentability criteria to reject pharmaceutical patents, and still has not established an effective system for protecting against the unfair commercial use, as well as the unauthorized disclosure, of undisclosed test or other data generated to obtain marketing approval for pharmaceuticals and certain agricultural chemical products."

    Indonesia is on the Priority Watch List, according to the Report, due to the reported lack of adequate and effective IP protection and enforcement" which continues to "raise serious concerns . . . with respect to patentability criteria and compulsory licensing."  Counterfeiting and piracy are also cited for being "pervasive" and IP enforcement as being "weak."

    The Report also notes that Chile has "not delivered on IP commitments made to the United States" and that Trinidad and Tobago has not pressed "enforcement actions against operators that broadcast unauthorized cable and satellite channels."

    The Report is promulgated pursuant to Section 182 of the Trade Act of 1974, as amended by the Omnibus Trade and Competitiveness Act of 1988 and the Uruguay Round Agreements Act (enacted in 1994).  The Trade Representative is required under the Act to "identify those countries that deny adequate and effective protection for IPR or deny fair and equitable market access for persons that rely on intellectual property protection."  The Trade Representative has implemented these provisions by creating a "Priority Watch List" and "Watch List."  Placing a country on the Priority Watch List or Watch List is used to indicate that the country exhibits "particular problems . . . with respect to IPR protection, enforcement, or market access for persons relying on intellectual property."  These watch lists are reserved for countries having "the most onerous or egregious acts, policies, or practices and whose acts, policies, or practices have the greatest adverse impact (actual or potential) on the relevant U.S. products."

    The USTR reviewed "more than 100" of this country's trading partners and identified ten countries on a "Priority Watch List" (decreased by one from last year) and another 23 countries on the "Watch List" (decreasing by two from last year), all relating to deficiencies in intellectual property protection in these countries.  The Priority Watch List in the 2020 Report includes Algeria, Argentina, Chile, China, India, Indonesia, Russia, Saudi Arabia, Ukraine, and Venezuela (Kuwait being removed from the list this year).  Countries on this list "present the most significant concerns this year regarding insufficient IP protection or enforcement or actions that otherwise limited market access for persons relying on intellectual property protection."  On the Watch List this year are Barbados, Bolivia, Brazil, Canada, Colombia, Dominican Republic, Ecuador, Egypt, Guatemala, Kuwait, Lebanon, Mexico, Pakistan, Paraguay, Peru, Romania, Thailand, Trinidad & Tobago, Turkey, Turkmenistan, the United Arab Emirates, Uzbekistan, and Vietnam  (Costa Rica and Greece being removed from the list this year).

    The Report also notes the USTR's continued efforts to enhance public engagement.  In addition to written comments (www.regulations.gov, Docket Number is USTR 2019-0023), from 75 interested parties, including 25 trading partner governments, there was a public hearing on February 26, 2019 that heard testimony from six "representatives of foreign governments, [and 20 representatives from] industry, and non-governmental organizations" (where the comments and a transcript and video of the hearing are available on the USTR website).

    The Report states that "[i]n virtually all countries identified in this Report, IP enforcement is lacking," due to, inter alia, "[in]adequate or effective border enforcement against counterfeit and pirated goods" (including Brazil, China, Colombia, Hong Kong, India, Indonesia, Nigeria, Paraguay, Singapore, Thailand, Turkey, the UAE, and Vietnam), and that in such countries "customs officials lack authority to take ex officio action to seize and destroy such goods at the border or to take such action for goods in-transit."

    The Report also notes efforts with several countries (including Argentina, Australia, Canada, China, Colombia, Ecuador, Egypt, Indonesia, Japan, Korea, Mexico, New Zealand, Saudi Arabia, Thailand, Turkey, the United Arab Emirates (UAE), and Vietnam) "to address concerns related to IP protection, IP enforcement, and market access barriers with respect to pharmaceuticals and medical devices so that trading partners contribute their fair share to research and development of new treatments and cures."

    Particularly mentioned are copyright issues, including online and broadcast piracy (Argentina, Bulgaria, Canada, Chile, China, Colombia, Dominican Republic, Greece, Guatemala, India, Mexico, the Netherlands, Romania, Russia, Saudi Arabia, Switzerland, Thailand, Ukraine, Vietnam, "and elsewhere") and unlicensed government use of copyrighted software (Argentina, Brazil, China, Egypt, Indonesia, Kenya, Mexico, Nigeria, the Philippines, Romania, Russia, Thailand, Ukraine, and Vietnam).

    The Report also cites "restrictive patentability criteria that undermine opportunities for export growth" (Argentina, India, and Indonesia) and "a lack of effective protection against unfair commercial use, as well as unauthorized disclosure, of test or other data generated to obtain marketing approval for pharmaceutical and agricultural chemical products" (Argentina, China, Egypt, India, and Saudi Arabia).

    As it did the past several years, the Report also chides India and China for inadequate trade secret protection, which puts "U.S. trade secrets at unnecessary risk" and "negative market access effects" from the European Union's geographical indications (GIs) protections.

    The Report also announces removal of certain countries from the Watch List because they have taken significant steps to address concerns in last year's Report.  Costa Rica, for example, has taken "concrete steps . . . to address unlicensed software use in the central government and to implement an online recordation system to improve border enforcement," and Greece has taken positive steps "to address the widespread use of unlicensed software in the public sector through the allocation of significant funds to purchase software licenses, progress in online enforcement, and the introduction of legislation to impose fines on those possessing counterfeit products, with the understanding that the United States will continue to monitor its enforcement effort."  Jamaica passed a new Patent and Design Act, and Kuwait has updated its copyright laws and regulations, according to the Report, and "significantly increase[ed] its in-country IP enforcement activities," albeit "ongoing concerns remain regarding the protections granted to copyright holders and the availability of counterfeit goods in the country."  Finally, Switzerland is recognized for "long-awaited" changes in its Copyright Act, specifically with regard to online protection and enforcement (although, here again the Report states that "[t]he United States will carefully monitor the implementation, interpretation, and effectiveness of the newly enacted legislation and will engage with the Swiss government on these and other IP issues").

    This portion of the Report once again ends by stating that "the Office of the U.S. Trade Representative looks forward to working closely with the trading partners identified in this year's Report to address these and other priority concerns."

    Results of 2019 "Out of Cycle" reviews discussed in the Report (which "provide an opportunity to address and remedy such issues through heightened engagement and cooperation with trading partners and other stakeholders") include Malaysia, during which the US and Malaysia "held numerous consultations with a view toward resolving outstanding issues" (as they did last year), despite which the USTR has decided to extend review in 2020, wherein the USTR will "press Malaysia to complete actions to fully resolve these concerns in the near term).  Also in 2020 the USTR plans on conducting an Out of Cycle Review of Saudi Arabia, directed to protection against unfair commercial use and unauthorized disclosure of testing and other data related to obtaining marketing approval for pharmaceutical products.

    The Report contains two Sections (on "Developments in Intellectual Property Rights Protection and Enforcement" and "Country Reports") and two Annexes on particular issues (the statutory bases of the Report, and government technical assistance and capacity building efforts).  In Section I, the Report reiterates its raison d'etre, that:

    Intellectual property (IP) infringement, including patent infringement, trademark counterfeiting [(or imply "counterfeiting")], copyright piracy [("piracy")], and trade secret theft, causes significant financial losses for right holders and legitimate businesses around the world.  IP infringement undermines U.S. competitive advantages in innovation and creativity, to the detriment of American businesses and workers.  In its most pernicious forms, IP infringement endangers the public, such as through exposure to health and safety risks from counterfeit products such as semiconductors, automobile parts, apparel, footwear, toys, and medicines.  In addition, trade in counterfeit and pirated products often fuels cross-border organized criminal networks and hinders sustainable economic development in many countries.  Fostering innovation and creativity is essential to U.S. economic growth, competitiveness, and the estimated 45 million American jobs that directly or indirectly rely on IP-intensive industries.  USTR continues to work to protect American innovation and creativity in foreign markets employing all the tools of U.S. trade policy, including the annual Special 301 Report.

    It then reviews "initiatives for strengthen IP protection and enforcement," which includes "examples of initiatives to strengthen IP protection and enforcement; illustrative best practices demonstrated by the United States and our trading partners; [and] U.S.-led initiatives in multilateral organizations; and bilateral and regional developments."  It also highlights areas of continued concern, including "counterfeits, online piracy, forced technology transfer, innovative pharmaceutical products and medical devices, and geographical indications (GIs)."  As in earlier years, it mentions how important IP protection is to innovations in the environmental sector.  Finally, Section I includes a discussion relating to "the importance of full implementation of the World Trade Organization (WTO) Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS) and developments on the U.S. use of WTO dispute settlement procedures to resolve IP concerns."

    In a section entitled "IP Protection and Enforcement and Related Market Access Challenges," the Report discusses innovation in the pharmaceutical industry, medical devices and market access concerns.  In this regard, the Report states that "USTR has been engaging with trading partners to ensure that U.S. owners of IP have a full and fair opportunity to use and profit from their IP, including by promoting transparent and fair pricing and reimbursement systems."  These efforts have included "ensur[ing] robust IP systems; reduc[ing] market access barriers to pharmaceutical products and medical devices, including measures that discriminate against U.S. companies, are not adequately transparent, or do not offer sufficient opportunity for meaningful stakeholder engagement; and has pressed trading partners to appropriately recognize the value of innovative medicines and medical devices so that trading partners contribute their fair share to research and development of new treatments and cures" (echoing the "fair share" mantra recited by the President in stump speeches and tweets).  The Report calls out in this regard the following efforts in particular countries:

    • Canada and Mexico: in the context of renegotiating the North American Free Trade Agreement (NAFTA), secured strong IP provisions in the United States-Mexico-Canada Agreement (USMCA), including provisions that "ensure that national-level government processes for the listing and reimbursement of pharmaceutical products and medical devices are transparent, provide procedural fairness, are nondiscriminatory, and provide full market access for U.S. products."  The Report notes that the USMCA was signed into law in the U.S. on January 29, 2020;

    • China: "[s]ecured enforceable commitments" to "(1) establish a mechanism for the early resolution of potential pharmaceutical patent disputes, including a cause of action to allow a patent holder to seek expeditious remedies before the marketing of an allegedly infringing product, so that innovative pharmaceutical companies can effectively enforce their rights in China; (2) provide patent term extensions to compensate for unreasonable patent office and marketing approval delays that cut into the effective patent term; and (3) permit the use of supplemental data to meet relevant patentability criteria for pharmaceutical patent applications";

    • Korea: as part of renegotiating the U.S.-Korea Free Trade Agreement (KORUS FTA), engaged to secure "meaningful reforms on longstanding issues . . . "to ensure transparency with respect to pharmaceutical and medical device pricing and reimbursement policies and non-discriminatory treatment for U.S. pharmaceutical exports";

    • Japan: engaged "to ensure transparency and fairness and address other concerns with respect to pharmaceutical and medical devices pricing and reimbursement policies";

    • Indonesia: "pressed" to "fully resolve concerns regarding Indonesian patent law, including patentability criteria, local manufacturing and use requirements, and the grounds and procedures for issuing compulsory licenses";

    • Argentina: "raised concerns" regarding the scope of patentable subject matter, protection against unfair commercial use and, like in many emerging countries, unauthorized disclosure of "undisclosed test or other data generated to obtain marketing approval for pharmaceutical and agricultural chemical products"; and

    • United Arab Emirates (UAE): "encouraged" this country "o issue regulations to provide effective protection against unfair commercial use, as well as unauthorized disclosure, of undisclosed test or other data generated to obtain marketing approval for pharmaceutical products."

    Once again this year, the Report highlights compulsory licensing as a particular concern with regard to pharmaceuticals and medical devices, because these practices are antithetical to "promot[ing] affordable healthcare for American patients today and innovation to preserve access to the cutting-edge treatments and cures that they deserve tomorrow."  The Report states that "[s]uch actions can undermine a patent holder's IP, reduce incentives to invest in research and development for new treatments and cures, unfairly shift the burden for funding such research and development to American patients and those in other markets that properly respect IP, and discourage the introduction of important new medicines into affected markets." Compulsory licenses should be issued in "extremely limited circumstances" and only after the government (and presumably the patent rights holder) has made "every effort" to obtain the patent owners' authorization on commercially reasonable terms.  Trading partners identified by the Report as requiring U.S. involvement in this aspect of trade include Chile, Colombia, Egypt, El Salvador, India, Indonesia, Malaysia, Russia, Turkey, and Ukraine.

    More generally, the Report points to "non-transparent" and discriminatory practices and "unreasonable regulatory delay" as being of concern to the USTR and administration.  In contrast, national systems that accelerate approval based on regulatory in other countries (including Egypt and Greece) are praised in the Report.

    The Report notes that stakeholders from the pharmaceutical and medical device industries have identified industries that have expressed concerns regarding the policies of several trading partners, including Algeria, Australia, Canada, China, Japan, Korea, New Zealand, and Turkey (the same countries identified in this regard in last year's Report) with regard to "issues related to pharmaceutical innovation and market access," citing specific examples falling within these general categories for each country.

    The Report next turns to technology transfer issues, purported to be means for incentivizing innovation by indigenous peoples and "localization."  In this portion of the Report, compulsory technology transfer is emphasized as causing difficulties for American innovators.  The Report identifies the anti-innovation cycle of imposing such measures to incentivize local innovation, which leads to create market entry barriers and thus discourages foreign (i.e., U.S.) investment, which not only hurts domestic industry in those countries but also can produce "non-market distortions" which in turn can lead to "suboptimal outcomes."  The Report sets forth a litany of these practices, including requirements for technology transfer as the price for regulatory or other governmental approval; directing (an escalation of the Report's complaints from last year's "permitting") state-owned enterprises to seek "non-commercial terms" for IP licensing or otherwise; providing unfair competitive advantage to local industry (if only passively by permitting U.S. IP-rights infringement); "failing to take meaningful measures to prevent or deter" cyber-intrusions; giving preference to local products and services dependent on indigenous IP; "[m]anipulating the standards development process to create unfair advantages for national firms"; and conditioning regulatory approval or other governmental approvals on disclosure of confidential business information and then "failing to protect such information appropriately."  China, Indonesia, and Nigeria are particularly cited for these concerns (unlike last year, Turkey is not).

    Trade secret protection, or lack of it, is also a concern discussed in the Report.  It cites "growing need for trading partners to provide effective protection and enforcement of trade secrets" in "a wide variety of industry sectors, including 'ICT' [information and communications technologies], services, pharmaceuticals and medical devices, environmental technologies, and other manufacturing" areas.  The Report cites "various sources, including the U.S. Office of the National Counterintelligence Executive" for reporting these concerns, particularly with regard to China.  Trade secret theft can arise in "a variety of circumstances," including permitting (or not stopping) departing employees from taking with them trade secret information-containing electronic storage devices, failed joint ventures, cyber intrusion and computer hacking, misuse of trade secrets disclosed to government agencies as part of a regulatory approval process.  The Report notes particular difficulties in China and India regarding "effective remedies," or that (in some countries) government regulations or policies require disclosure of trade secrets such as software source code, including Brazil, Indonesia, Malaysia, and Nigeria.  While asserting that "[t]he United States uses all trade tools available to ensure that its trading partners provide robust protection for trade secrets and enforce trade secrets laws," the Report cites on a positive note that efforts by the European Union and Taiwan to strengthen their trade secret regimes.  The USTR also "strongly supports" the work of the Organization for Economic Cooperation and Development (OECD)'s work on trade secret protection.

    The Report next addresses geographical indications (GIs) issues, saying (again) that the U.S. "is working intensively through bilateral and multilateral channels" to improve U.S. access to a variety of goods having geographic specificity, particularly with regard to the European Union.  The EU GI "agenda remains highly concerning, because it significantly undermines the scope of trademarks and other IP rights held by U.S. producers and imposes barriers on market access for American-made goods that rely on the use of common names, such as parmesan or feta."  Many of these products are protected by trademarks that predate the issuance of the GI.  Because "[t]rademarks are among the most effective ways for producers and companies, including small- and medium- sized enterprises (SMEs), to create value, to promote their goods and services, and to protect their brands," GI's "undermines trademark protection and may result in consumer confusion to the extent that it permits the registration of GIs that are confusingly similar to prior trademarks" according to the Report.

    The Report asserts that the EU "pressures trading partners to prevent all producers, other than in certain EU regions, from using certain product names" with as a consequence "American producers and traders either are effectively blocked from those markets or must adopt burdensome workarounds" (illustrated by appending "-like," "-style"," or "imitation" to the particular name).  Part of the reason for U.S. concern is frankly admitted to be that "[t]he United States runs a significant deficit in food and agricultural trade with the EU," comparing $1 billion in cheese exports from the EU to the U.S. with $3.6 million in imports into the EU from the U.S. last year.  More worrisome is the EU's extension of GI designations into other goods, including "non-agricultural products, including apparel, ceramics, glass, handicrafts, manufactured goods, minerals, salts, stones, and textiles."  The U.S. is "continu[ing] to urge the EU to not implement certain proposed changes to the EU's Common Agricultural Policy, which, if adopted, would transfer much of the GI application review process to interested EU Member States and sharply reduce the period for filing a reasoned basis in support of an opposition to register a GI."

    The Report also notes that the EU is pursuing its GI agenda in "multilateral and plurilateral bodies," including "expanding the World Intellectual Property Organization (WIPO) Lisbon Agreement for the Protection of Appellations of Origin and their International Registration to include GIs, thereby enshrining several detrimental aspects of EU law in that Agreement."  The Report characterizes these efforts as a "break with the long-standing WIPO practice of consensus-based decision-making" and consequently voted to "deny the United States and 160 other WIPO countries meaningful participation rights in the negotiations."  Those efforts have apparently been successful, the Report stating that "[i]n 2020, the EU became party to the Geneva Act of the Lisbon Agreement."

    The Report also notes that the U.S. response is to address the issue in so-called "free trade" agreements and bilateral agreements with other nations, including Argentina, Australia, Brazil, Canada, Chile, China, Colombia, Ecuador, Indonesia, Japan, Jordan, Malaysia, Mexico, Morocco, Paraguay, the Philippines, Singapore, South Africa, Tunisia, Ukraine, Uruguay, and Vietnam.

    The Report next turns to online and broadcast piracy of copyrighted works, citing the "increased availability of broadband Internet connections around the world" as being a "boon" to the U.S economy and foreign trade.  But while advances in technology have enabled U.S. creative producers to better distribute copyrighted materials, it has also made the Internet "an extremely efficient vehicle for disseminating infringing content, thus competing unfairly with legitimate e-commerce and distribution services that copyright holders and online platforms use to deliver licensed content."  A variety of forms of this issue are discussed in the Report, which names Argentina, Bulgaria, Canada, Chile, China, Colombia, the Dominican Republic, Greece,  India, Mexico, the Netherlands, Romania, Russia, Switzerland, Thailand, Ukraine, and Vietnam as having "high levels of online piracy and lack effective enforcement."  A particular form of copyright piracy (particularly of music), termed "streamripping," is practiced (or ineffectively prevented) in Canada, Mexico, the Netherlands, Sweden, and Switzerland.  Illicit Internet Protocol Television and signal theft by cable operators as significant sources of copyright is identified as a problem in Argentina, Brazil, Chile, China, the Dominican Republic, Hong Kong, India, Indonesia, Mexico, Peru, Saudi Arabia, Singapore, Taiwan, Thailand, and Vietnam, with China being called out as a source for the devices that are used for these practices.  Signal theft by cable operators continues to be a particular concern in the Report, which asserts that typically, "infringers circumvent encryption systems or otherwise unlawfully access cable or satellite signals to access content," including from "overspill" with hotels remaining a common site for this type of infringement.  Finally, the Report identifies illicit camcording as a concern, identifying Argentina, Brazil, Ecuador, Peru, Russia, and Taiwan as countries that do not have effective enforcement mechanisms to discourage the practice, and names Canada, Japan, and the Philippines as countries that have adopted effective laws and enforcement practices to prevent illicit camcording.

    The final extensive discussion in the Report regards border control and criminal enforcement against counterfeiting.  Counterfeit goods (including "semiconductors and other electronics, chemicals, automotive and aircraft parts, medicines, food and beverages, household consumer products, personal care products, apparel and footwear, toys, and sporting goods") "make their way from China" and other countries, particularly those having an "ineffective or inadequate IP enforcement system."  Citing a March 2019 OECD study entitled "Trends in Trade in Counterfeit and Pirated Goods," the cost of such counterfeiting was $509 billion in 2016, which is equivalent to 3.3% of 2016 total global trade (with China accounting for 57%, $239 billion, of that trade).

    The Report states that such counterfeit goods harm "consumers, legitimate producers, and governments," particularly with regard to medicines, automotive and airplane parts, and food and beverages" because the counterfeit products do not meet the "rigorous good manufacturing practices used for legitimate products."  The Report enunciates difficulties that arise due to the use of legitimate sources of trade ("legitimate express mail, international courier, and postal services") for transporting counterfeit goods in small consignments or shop unmarked goods to which a counterfeit trademark are affixed at their final destination.  These practices inhibit trademark enforcement efforts, particularly in countries that require a counterfeit to be "completed" at the time of importation and inspection at national borders.

    The Report states that the U.S. continues to "urge" its trading partners to "undertake more effective criminal and border enforcement against the manufacture, import, export, transit, and distribution of counterfeit goods" and states that the Office engages trading partners bilaterally, through trade agreement and international organizations on this issue.  Another problem is the reentry into channels of commerce of counterfeit goods after they have been seized at national borders and transshipment through 'free trade zones"; the Report uses the UAE, particularly Dubai, as an example of this practice that accounted for $16 billion in counterfeit goods in 2016.  Particular instances of trade in counterfeit medicines and global patterns of such drugs (e.g., India being a major supplier of counterfeit drugs to African countries) are also discussed in the Report.

    Copyright administration and royalty payments, particularly with regard to collective management organizations (BMI, ASCAP) are next discussed, with concern arising that "CMO systems in several countries are reportedly flawed or nonoperational," citing India, the UAE, and Ukraine as examples.

    Trademarks and impediments to obtaining and enforcing them in some countries make up the next topic in the Report, with Brazil, China, India, Malaysia, and the Philippines, having "slow" opposition proceedings and Russia and Panama having no administrative opposition proceedings.  Even registering (i.e., making a record of) trademarks is problematic in some countries, with "unnecessary administrative and financial burdens" imposed on owners and there being unnecessary difficulties in maintaining and enforcing trademarks (albeit without naming any countries where these and other difficulties contained in the Report have arisen).  There are also issues with cybersquatting and particularly with country code top-level domain names (ccTLDs) for U.S. rights holders.

    Government use of unlicensed software is also discussed, with Argentina, Brazil, China, Egypt, Greece, Guatemala, Indonesia, Kenya, Mexico, Nigeria, Paraguay, the Philippines, Romania, Russia, Thailand, Turkey, Ukraine, and Vietnam being identified as countries where "further work on this issue remains" to be done.

    The Report sets forth efforts related to initiatives for improving IP protection resulting in countries not being put on the Watch List (Costa Rica, Greece, Jamaica Switzerland), and Kuwait being removed from the Priority Watch List for "taking further steps to reform its system of copyright protection and enforcement by passing the 2019 Copyright and Related Rights Law and the Implementing Regulations."  A particular irritant noted in last year's Report, BeoutQ, "the notorious online and satellite piracy service reportedly operating out of Saudi Arabia" and states it was taken offline in 2019.

    Also noted is participation by 59 member states in the 1991 Act of the International Union for the Protection of New Varieties of Plants Convention (UPOV 91), which member states to "grant IP protection to breeders of new plant varieties, known as breeder's rights," and 104 member states of the WIPO Performances and Phonograms Treaty and the WIPO Copyright Treaty, which have "raised the standard of copyright protection around the world, particularly with regard to online delivery of copyrighted content."

    Section I of the Report also has a section of "Illustrative Best IP Practices by [U.S.] Trading Partners, which expressly recites Thailand and India for "[c]ooperation and coordination among national government agencies involved in IP issues"; Spain, India, Thailand, and Vietnam for IP awareness and educational campaigns; Brazil, Malaysia, and Jamaica for "[s]pecialized IP enforcement units"; and several governments (Romania, Singapore) for active participation of government officials in technical assistance and capacity building."

    The Report discusses multilateral (WTO) and regional (APEC) and bilateral (TIFA) agreements and specific instances where such agreements are being pursued in furtherance of U.S. trade objectives.  Also included is a discussion of implementation of the WTO TRIPS Agreement.

    Section I of the Report ends by mentioning the role of intellectual property and the environment and intellectual property and health as areas of concern raised by stakeholders in their comments.  The Report contains an affirmation of the provisions regarding IP and public health set forth in the Doha Declaration and states that "[t]he United States is firmly of the view that international obligations such as those in the TRIPS Agreement have sufficient flexibility to allow trading partners to address the serious public health problems that they may face."  And the final portion of this section of the Report discusses efforts at dispute resolution of IP matters under the GATT/TRIPS provisions as they are implemented by the WTO.

    Finally, the last portion of Section I of the Report relates to dispute settlement and enforcement.  It states that while the U.S. will use all available means to resolve concerns, including bilateral dialogue and enforcement tools such as those provided under U.S. law, the WTO, and other dispute settlement procedures, as appropriate."  Efforts between the U.S. and China are specifically mentioned with regard to "a range of unfair and harmful Chinese acts, policies, and practices related to technology transfer, IP, and innovation."  Other enforcement actions, mostly of historical significance, are also discussed.

    Section II of the Report is a detailed, country-by-country discussion for each country on the Priority Watch List and the Watch List, relating to the activities (or lack thereof) of each country that results in placement of that country on these lists.

    As it has for the past several years (and across otherwise very different Administrations), the U.S. Trade Representative Special 301 Report provides insights into both the concerns of U.S. IP rights holders and the Administration's intentions to work with, cajole, coerce, or threaten other countries to increase protection for IP rights of U.S. IP rights holders.  For anyone paying adequate attention to these Reports year-to-year, the complaints, and even the language enunciating these complaints, remains dispiritingly the same, suggesting that despite pronouncements of small victories efforts to reduce unfair trade practices globally have fallen far short.  Nevertheless, as with last year's Report, the tone and tenor of this Report is robustly assertive regarding IP rights and America's intention to negotiate international agreements and confront its trading partners in ways that protect American innovation and commercial interests first and foremost regardless of consequences.

    For additional information regarding this and other related topics, please see:

    • "U.S. Trade Representative Releases 2019 Special 301 Report," April 29, 2019
    • "U.S. Trade Representative Releases 2018 Special 301 Report," April 29, 2018
    • "U.S. Trade Representative Issues 2017 Special 301 Report," May 4, 2017
    • "U.S. Trade Representative Issues 2016 Special 301 Report," May 19, 2016
    • "U.S. Trade Representative Issues 2015 Special 301 Report," April 30, 2015
    • "U.S. Trade Representative Issues 2014 Special 301 Report," May 19, 2014
    • "U.S. Trade Representative Issues 2013 Special 301 Report," May 30, 2013
    • "U.S. Trade Representative Issues 2012 Special 301 Report," May 1, 2012
    • "U.S. Trade Representative Releases Special 301 Report on Global IPR," May 4, 2011
    • "U.S. Trade Representative Releases Special 301 Report on Global IPR," May 19, 2010
    • "New Administration, Same Result: U.S. Trade Representative's Section 301 Report," May 6, 2009
    • "Congressmen Criticize U.S. Trade Representative over Special 301 Report," July 1, 2008
    • "U.S. Continues Efforts to Protect Patent Rights Abroad," April 29, 2008

  • Conference & CLE Calendar

    CalendarMay 12, 2020 – "Mental Health & Well-Being During A Time of Crisis" (Intellectual Property Owners Association) – 2:00 to 3:00 pm (ET)

    May 12, 2020 – "Coordinating litigation and prosecution in complex patent disputes" (Potter Clarkson and iam) – 11:00 am to 12:00 pm (EDT)

    May 13, 2020 – "Primed for AI – the basics of artificial intelligence and machine learning" (Bereskin & Parr) – 12:00 to 1:00 pm (EDT)

    May 13, 2020 – "How in-house IP leaders are managing during the covid-19 pandemic" (IPBC Talking Heads and iam) – 11:00 am to 12:00 pm (EDT)

    May 14, 2020 – "Perspectives on the Federal Circuit's Modified Procedures During the COVID-19 Crisis" (Federal Circuit Bar Association) – 11:00 am to 12:00 pm (EST)

  • IPO Webinar on Mental Health & Well-Being

    IPO #2The Intellectual Property Owners Association (IPO) will offer a one-hour webinar entitled "Mental Health & Well-Being During A Time of Crisis" as part of the IPO's COVID-19 Webinar Series on May 12, 2020, from 2:00 to 3:00 pm (ET).  Dahlia George of the USPTO's Office of Enrollment and Discipline and Mercedes K. Meyer of Faegre Drinker Biddle & Reath, LLP will review the intersection of mental health challenges and attorneys' ethical obligation to provide clients with competent representation; provide a brief overview of the eye-opening pre-epidemic statistics around depression, substance abuse, and mental health in the bar; discuss potential impacts on productivity and work quality, the responsibilities of managers and supervisors, and wellness focused solutions as well as how the USPTO's Diversion Pilot Program and employers can help affected practitioners.

    There is no registration fee for IPO members for this webcast (the fee for non-members is $150).  Additional information regarding the webcast can be found here.

  • Webinar on How In-house IP Leaders Are Managing During Pandemic

    IAMIPBC Talking Heads and iam will be offering a free webinar entitled "How in-house IP leaders are managing during the covid-19 pandemic" on May 13, 2020 from 11:00 am to 12:00 pm (EDT).  The webinar will explore the solutions they are coming up with, how these may affect the way in which their teams work in the future, and how they see the wider IP environment in these turbulent times.

    Those interested in registering for the webinar, can do so here.

  • Webinar on Coordinating Patent Litigation and Prosecution

    IAMPotter Clarkson and iam will be offering a free webinar entitled "Coordinating litigation and prosecution in complex patent disputes" on May 12, 2020 from 11:00 am to 12:00 pm (EDT).  The webinar will analyse the sometimes complex interrelationships between developing multi-patent portfolios and asserting/defending them in national courts in multiple jurisdictions, and how companies and legal teams can develop effective strategies to ensure optimal outcomes for patentees.

    Those interested in registering for the webinar, can do so here.

  • FCBA Program on Federal Circuit’s Modified Procedures During COVID-19 Crisis

    Federal Circuit Bar Association_2The Federal Circuit Bar Association (FCBA) will be offering a remote program entitled "Perspectives on the Federal Circuit's Modified Procedures During the COVID-19 Crisis" on May 14, 2020 from 11:00 am to 12:00 pm (EST).  Lucas Townsend of Gibson, Dunn & Crutcher LLP will moderate a panel consisting of Peter Marksteiner, Circuit Executive and Clerk of Court, U.S. Court of Appeals for the Federal Circuit; Jarrett Perlow, Chief Deputy Clerk, U.S. Court of Appeals for the Federal Circuit; and Jonathan Weinberg of King & Spalding LLP.  The panel will offer information about the Federal Circuit's modified procedures during the COVID-19 crisis, including perspectives from representatives of the Federal Circuit Clerk's Office and Federal Circuit practitioners.

    The webinar is complimentary for FCBA members and students, $50 for government/academic/retired, or $175 for private practitioners.  Those interested in registering for the program, can do so here.

  • Webinar on Artificial Intelligence and Machine Learning

    Bereskin & ParrBereskin & Parr will be offering a presentation entitled "Primed for AI – the basics of artificial intelligence and machine learning" on May 13, 2020 from 12:00 to 1:00 pm (EDT).  Paul Horbal and Paul Blizzard of Bereskin & Parr will discuss the fundamentals of artificial intelligence (AI) and machine learning (ML) technologies using only everyday language and approachable examples.  The panel will also address the following topics:

    • What is artificial intelligence? What is machine learning? How do they differ?
    • How do these technologies work?
    • What can and can't these technologies do today?
    • Where is the technology headed?
    • Can these technologies be patented?

    Those wishing to register for the presentation can do so here.

  • Hologic, Inc. v. Minerva Surgical, Inc. (Fed. Cir. 2020)

    By Kevin E. Noonan —

    Federal Circuit SealLast week, the Federal Circuit "grappled," as the opinion put it, with the equitable doctrine of assignor estoppel in Hologic, Inc. v. Minerva Surgical, Inc.

    The case arose in an infringement suit over U.S. Patent Nos. 6,782,183 and 9,095,348.  The patents were directed to "procedures and devices for endometrial ablation."  Claim 9 of the '183 patent and claim 1 of the '348 patent were considered by the Court to be representative:

    '183 patent:

    9.  A method of detecting a perforation in a uterus, comprising the steps of:
        passing an inflation medium into the uterus;
        monitoring for the presence of a perforation in the uterus using a pressure sensor;
        if no perforation is detected during the monitoring step, permitting ablation of the uterus using an ablation device; and
        if a perforation is detected during the monitoring step, preventing ablation of the uterus.

    '348 patent:

    1.  A device for treating a uterus comprising:
        an elongate member having a proximal portion and a distal portion, the elongate member comprising
        an outer sleeve and an inner sleeve slidably and co-axially disposed within the outer sleeve;
        an applicator head coupled to the distal portion, the applicator head defining an interior volume and having a contracted state and an expanded state, the contracted state being configured for transcervical insertion and the expanded state being configured to conform to the shape of the uterus, the applicator head including one or more electrodes for ablating endometrial lining tissue of the uterus;
        a handle coupled to the proximal portion of the elongate member, wherein the handle comprises a frame, a proximal grip and a distal grip pivotally attached to one another at a pivot point and operably coupled to the applicator head so that when the proximal grip and the distal grip are moved closer together, the applicator head transitions from the contracted state to the expanded state;
        a deflecting mechanism including flexures disposed within the applicator head, the flexures including first and second internal flexures and first and second external flexures, the first and second external flexures being coupled to the outer sleeve and the first and second internal flexures being coupled to the inner sleeve, wherein the deflecting mechanism is configured so that translating the inner sleeve relative to the frame causes the applicator head to transition from the contracted state to the expanded state; and
        an indicator mechanism operably coupled to the inner sleeve, the indicator mechanism configured to indicate a dimension of the uterus [emphases added to indicate disputed claim terms not further discussed herein].

    The opinion set out the relationships between the parties in this dispute.  Inventor Truckai (named on both the '183 and '489 patents) founded Novocept, which developed a system for detecting perforations in a uterus that could cause serious side effects for women undergoing endometrial ablation; the system depends on introducing carbon dioxide into the uterus and monitoring gas escape.  It was undisputed that Novocept's ablation product uses the claimed technology, and that inventor Truckai assigned his right to these patents to Novocept.  Thereafter, Novocept was acquired by co-plaintiff Cytyc Corp., which was subsequently acquired by co-plaintiff Hologic.  Hologic now sells the Novocept system.

    Meanwhile, Inventor Truckai founded accused infringer Minerva and developed the accused infringing article, termed the Endometrial Ablation System (EAS).  Hologic sued Minerva over sales of the EAS for infringing the '183 and '349 patents.  Hologic moved for summary judgment that Minerva was estopped under the doctrine of assignor estoppel for both the '183 and '348 patents, which motion the District Court granted.  Assignor estoppel has differences in both philosophy and patent policy than licensee estoppel, which was abolished by the Supreme Court in Lear, Inc. v. Adkins, 395 U.S. 653, 666 (1969).  Licensee estoppel, according to the Supreme Court, was against public policy because a licensee of an invalid patent, of all parties, has the most incentive to see such patents invalidated.  (Similar considerations motivated the Supreme Court in MedImmune, Inc. v. Genentech, Inc.)  Assignor estoppel, on the other hand, is a situation where a patent owner (frequently the inventor) has transferred ownership rights in their patent for consideration, and now wishes to challenge the transferred patent's validity.  This behavior smacks of "unclean hands" or at least sharp practices, and a court in applying equitable principles should avoid permitting the assignor from involving the power of the Court to support this seeming inequity.  Here, the District Court found that Inventor (and assignor) Truckai was intimately involved inter alia as founder, President, and CEO of Minerva in bringing the accused EAS product to market.  The Supreme Court has addressed (and, according to the opinion, "carved out some exceptions to") the doctrine in Westinghouse Electric & Manufacturing Co. v. Formica Insulation Co., 266 U.S. 342 (1924), and Scott Paper Co. v. Marcalus Manufacturing Co., 326 U.S. 249 (1945).

    Finally, at the District Court on the issue of apportionment of damages, the jury found a total award of $4,787,668 on infringement of the '183 and '348 patents without any differential apportionment to either patent.  In a parallel inter partes review proceeding, the Patent Trial and Appeal Board found the asserted claims of the '183 patent to be invalid for obviousness (a decision affirmed on appeal by the Federal Circuit).  Both parties appealed; this decision is significant regarding Minerva's appeal of the assignor estoppel and apportionment issues.

    The Federal Circuit affirmed with regard to both the assignor estoppel issue and the apportionment of damages issue, in an opinion by Judge Stoll joined by Judges Wallach and Clevenger; Judge Stoll offered additional views separately.  The opinion also vacated and remanded on other factors involved in the damages calculations not germane to the other issues in the case.

    The panel rejected Hologic's argument that assignor estoppel precluded application of the PTAB's invalidity judgment in the IPR.  On the other hand, the panel affirmed the District Court's grant of summary judgment based on assignor estoppel with regard to Minerva's invalidity defenses in this litigation regarding the '348 patent.  The opinion notes that the Federal Circuit first had occasion to consider (and "affirm the vitality of") assignor estoppel in Diamond Scientific Co. v. Ambico, Inc., 848 F.2d 1220 (Fed. Cir. 1988), which also held that the estoppel extends to those in privity with the estopped assignor (relevant here, to Minerva).  The opinion provides the following basis for the continued vitality of the assignor estoppel doctrine, citing Diamond Scientific:

    The public policy favoring allowing a licensee to contest the validity of the patent is not present in the assignment situation.  Unlike the licensee, who, without Lear might be forced to continue to pay for a potentially invalid patent, the assignor who would challenge the patent has already been fully paid for the patent rights.

    The opinion recited four commonly recited justifications for the doctrine:

    "(1) to prevent unfairness and injustice; (2) to prevent one [from] benefiting from his own wrong; (3) by analogy to estoppel by deed in real estate; and (4) by analogy to a landlord-tenant relationship." [Diamond Scientific] at 1224 (alteration in original) (quoting Cooper, Estoppel to Challenge Patent Validity: The Case of Private Good Faith vs. Public Policy, 18 Case W. Res. L. Rev. 1122 (1967)).

    The Court recognizes that the assignor is in a unique position because of the imputed earlier representation (express or implied) that the patent had value and that it would be an injustice to permit the assignor to repudiate that earlier representation.  The opinion then sets forth a litany of its case law consistent with the continued vitality of the doctrine, including Shamrock Techs., Inc. v. Med. Sterilization, Inc., 903 F.2d 789, 793–96 (Fed. Cir. 1990); Mentor Graphics Corp. v. Quickturn Design Sys., Inc., 150 F.3d 1374, 1377–80 (Fed. Cir. 1998); Pandrol USA, LP v. Airboss Ry. Prods., Inc., 424 F.3d 1161, 1166–67 (Fed. Cir. 2005); and Mentor Graphics Corp. v. EVE-USA, Inc., 851 F.3d 1275, 1280–83 (Fed. Cir. 2017), as well as instances where the scope of the estoppel can be narrowed, see, Mentor Graphics Corp. v. Quickturn Design Sys.

    Applying this case law, the panel concluded that assignor estoppel did not preclude Minerva from relying on the PTAB's decision that the '183 patent was invalid.  The panel notes that case law had determined that assignor estoppel does not preclude filing an IPR.  In Arista Networks, Inc. v. Cisco Sys., Inc., 908 F.3d 792, 804 (Fed. Cir. 2018), the Court concluded that the language of the statute, 35 U.S.C. § 311(a), which precludes a patent owner from filing an IPR did not so preclude an assignor (i.e., a former owner).

    However, the Court also affirmed the District Court's decision that assignor estoppel prevented Minerva from asserting invalidity defenses against the '348 patent (specifically rejecting Minerva's call for the Court to "abandon the doctrine" as being contrary to Lear (for at least the reasons discussed above).  While also recognizing that the doctrine should not be applied automatically it should be applied consistent with the facts and equities before the Court.  Here, the facts are "analogous to" the facts in Diamond Shamrock, wherein "an inventor executes broad assignments to his employer, leaves his employer, founds or takes on a controlling role at a competing company, and is directly involved in the alleged infringement."  The Court was unpersuaded that the distinction here, that Hologic had prosecuted the '348 patent claims after Inventor Truckai left Novocept, made a difference.  However, nothing in the assignor estoppel doctrine prevented Minerva from introducing evidence to the Court that would, for example, narrow the scope of the claims.

    With regard to damages apportionment, the panel noted that the general rule is that in instances where a jury relies on "any of two or more independent legal theories" and one of them is defective, such "a general verdict must be set aside," citing WesternGeco L.L.C. v. ION Geophysical Corp., 913 F.3d 1067, 1073 (Fed. Cir. 2019).  In accord are Verizon Servs. Corp. v. Vonage Holdings Corp., 503 F.3d 1295, 1310 (Fed. Cir. 2007); Memphis Cmty. Sch. Dist. v. Sta-chura, 477 U.S. 299, 312 (1986); and DDR Holdings, LLC v. Hotels.com, L.P., 773 F.3d 1245, 1262 (Fed. Cir. 2014), that the "normal" rule requires a new trial on damages "where the jury rendered a single verdict on damages, without breaking down the damages attributable to each patent" and one of the patents is found invalid.  The exception of the rule is that a single award can be maintained if there is undisputed evidence that the sustained patent was "necessarily infringed" by "all of the accused activity on which the damages award was based."  In those instances, the Court properly applies a "harmlessness" standard analogous to that applied regarding erroneous jury instructions.

    That is the case here.  The Federal Circuit based its decision on there being "undisputed evidence" before the District Court that the damages found by the jury were adequately supported by defendant's infringement of claim 1 of the '348 patent.  Hologic presented expert testimony (subject to cross-examination) to the effect that "the same royalty rate he used in his damages calculation would apply to either the '183 patent or '348 patent, 'individually or the two patents collectively,' since they 'both cover the entire procedure and device respectively.'"  And Minerva proffered no persuasive evidence to the contrary, according to the opinion.

    Judge Stoll's additional views concerned exclusively the assignor estoppel issue.  The Judge characterized the legal circumstances in this case as being "peculiar" and the Court's decision as being mandated by precedent.  The Judge identifies as one reason for her judicial displeasure for this outcome to be the Court's decision in Arista that an assignor was not estopped from petitioning for inter partes review.  On the other hand, assignors remain barred from pursuing litigation against patents they have assigned to others (and later get into litigation against their assignee).  The paradox for the Judge is that "[o]ur precedent . . . presents an odd situation where an assignor can circumvent the doctrine of assignor estoppel by attacking the validity of a patent claim in the Patent Office, but cannot do the same in district court."  This dichotomy, which the Judge believes to be "odd and seemingly illogical") prompts her here to suggest that the Court sit en banc to "clarify" this aspect of the patent law.

    Hologic, Inc. v. Minerva Surgical, Inc. (Fed. Cir. 2020)
    Panel: Circuit Judges Wallach, Clevenger, and Stoll
    Opinion by Circuit Judge Stoll; additional views by Circuit Judge Stoll