Patent Docs

Dr. Falk Pharma GmbH v. Generico, LLC (Fed. Cir. 2019)

July 30, 2019

By Kevin E. Noonan —

The interplay (or perhaps utilization) of inter partes review (IPR) in ANDA litigation was illustrated by the Federal Circuit in last month's Dr. Falk Pharma GmbH v. Generico, LLC nonprecedential decision.

The case arose over U.S. Patent No. 8,865,688 owned by Dr. Falk Pharma GmbH and exclusively licensed to Salix. The claimed invention relates to a method for treating ulcerative colitis using extended-release, granulated mesalamine formulations, sold by Salix as 375 mg capsules under the brand name Apriso®. The claimed method addressed known deficiencies in the art, particularly premature release of mesalamine, which prevented the drug from reaching the colon where it must act.

Claim 1 of the '688 patent is representative:

1. A method of maintaining the remission of ulcerative colitis in a subject comprising
    administering to the subject a granulated mesalamine formulation comprising four capsules each comprising 0.375 g of granulated mesalamine once per day in the morning, without food, wherein:
    said method maintains remission of ulcerative colitis in a subject for a period of at least 6 months of treatment;
    remission is defined as a DAI score of 0 or 1;
    the granulated mesalamine formulation is not administered with antacids; and
    wherein 85% to 90% of the mesalamine reaches the terminal ileum and colon.

Generico, LLC; Flat Line Capital LLC; and Mylan Pharmaceuticals Inc. each successfully petitioned for inter partes review of the '688 patent. Before the Patent Trial and Appeal Board (PTAB), Mylan, Generico, and Flat Line Capital LLC argued that the claims of the '688 patent were obvious over two separate press releases by Salix and a scientific journal reference, in view of either of two other scientific journal references.

In parallel litigation, Mylan filed its ANDA having a Paragraph IV certification and Salix filed suit; the District Court dismissed without prejudice Defendants' affirmative defenses and counterclaims in favor of the outcome of the IPR before the PTAB.

In the IPR, the PTAB in a Final Written Decision determined that claims 1 and 16 were invalid for obviousness. The PTAB construed the claim language, wherein the first ("administering to the subject a granulated mesalamine formulation comprising four capsules each comprising 0.375 g of granulated mesalamine once per day in the morning, without food") and fourth ("the granulated mesalamine formulation is not administered with antacids") limitations recited steps in the method while the other limitations ("said method maintains remission of ulcerative colitis in a subject for a period of at least 6 months of treatment"; "remission is defined as a DAI score of 0 or 1"; and "wherein 85% to 90% of the mesalamine reaches the terminal ileum and colon") recited the results of the practice of the method.

Important to the PTAB's decision, the specification expressly defined "the DAI score":

Ulcerative colitis disease activity was assessed using a modified Sutherland Disease Activity Index1 (DAI), which is a sum of four subscores based on stool frequency, rectal bleeding, mucosal appearance on endoscopy, and physician's rating of disease activity. Each subscore can range from 0 to 3, for a total possible DAI score of 12.

The asserted prior art taught the following:

• Press release: Salix's own announcement regarding successful Phase III results with their mesalamine formulations

• "Endonurse": another Salix press release regarding successful Phase III trial results

• Davis: an academic paper showing that the presence of food in the stomach can increase acid and retard release from stomach, compromising mesalamine delivery to colon

• Marakhouski: another academic paper comparing pellets vs tablet administration of 5-acetylsalacylic acid, and that pellets are more advantageous

• Brunner: similar disclosure showing pellets advantageous over tablets

The PTAB found the claims obvious in view of this prior art, considering Marakhouski as the primary reference, based on construction of the term "DAI score" to mean "remission is defined as a DAI score of 0 or 1, where the DAI score is a sum of four subscores." As explained by the Federal Circuit:

Specifically, the Board found that a skilled artisan would have been motivated to combine the method of the September 2007 Press Release and Endonurse with the teachings of either Marakhouski or Brunner that the granulated mesalamine formulation could be administered without food. The Board cited as its rationale the fact that all four prior art references pertain to the same or similar granulated mesalamine formulation for treatment of the same disease and because Marakhouski and Brunner teach that an advantage of a granulated mesalamine formulation is the ability to administer the drug independent of food.

The PTAB also found the required reasonable expectation of success from Salix's press releases, wherein the absence of teaching that the drug must be administered with food was interpreted to support the claim term affirmative requiring that the drug not be administered with food; this conclusion was also supported by other asserted art (Davis) and expert testimony. The Board also rejected Dr. Falk's contention that the art was deficient for not teaching a comparative food study, i.e, comparing the results of administration of mesalamine with and without food. Finally, the Board rejected Dr. Falk's assertion of objective indicia of non-obviousness, characterizing this evidence as Salix's own failures which did not satisfy the "failure of others" secondary consideration.

In the parallel litigation, the District Court construed the term "wherein 85% to 90% of the mesalamine formulation reaches the terminal ileum and colon" to provide both lower and upper limits on delivery percentages and found noninfringement based on the delivery performance of Mylan's generic drug and whether its formulation was a granulated mesalamine formulation.

The Federal Circuit affirmed the PTAB's obviousness determination in the IPR and vacated as moot the District Court decision (and thus did not reach the correctness of the District Court's noninfringement determination), in an opinion by Judge O'Malley, joined by Judges Lourie and Reyna.

Regarding the PTAB, the Court held that the Board correctly construed the DAI score limitation based on the express definition in the specification, using either the broadest reasonable interpretation test or the Phillips v. AWH test. This conclusion was also supported by the patentee conceding that the DAI score was "ordinarily understood" to be the sum of four subscores. In addition, the opinion notes that in patentee's specification, "when the DAI score was identified as being the sum of only two subscores [in the '688 specification] it was called a 'revised Sutherland Disease Activity Index' which is not a term used in the claims." (This raises the possibility that Dr. Falk could file a narrowing reissue to amend the claims for validity, but the PTO might correctly determine that such an amendment would be broadening rather than narrowing.)

Turning to the "without food" limitation, the Federal Circuit disagreed with Dr. Falk's contention that in this case the PTAB had changed the basis for its obviousness determination from institution to final written decision, contrary to SAS Institute, Inc. v. ComplementSoft, LLC, 825 F.3d 1341 (Fed. Cir. 2016). Here, the Court explained that what was prohibited was failing to give a patentee the opportunity to address the "new" grounds for the Board's decision. This was not the case here, in the Federal Circuit's opinion, because Dr. Falk (in the Court's view) had sufficient notice and opportunity and did in fact address the question of whether drug administration without a "food effect" was recognized in the prior art (where the food effect is "that taking the formulation without food is preferable to taking it with food"). The panel also held that the skilled worker had a reasonable expectation of success of achieving the invention set forth in the claims (requiring that the patient not take food) even without the art teaching this feature (typically by containing a "food effect" study), based on "other rationales" for avoiding food, not specified in the opinion.

Finally, the Court also affirmed the PTAB conclusion that, despite there being an affirmative limitation that administration occur "without food" the art did not need a food study to establish this effect because the specification taught that the formulation could be administered with or without food, and that the Board correctly did not find its obviousness conclusion contradicted by the asserted secondary considerations.

This outcome shows that even under circumstances where the district court conducts a trial on infringement under 35 U.S.C. § 271(e)(2), an ANDA defendant can benefit by moving its invalidity case to the PTAB and avoid the cost of putting on affirmative defenses and counterclaims before a lay judge not having the PTAB's purported expertise (or apparent anti-patent bias).

Dr. Falk Pharma GmbH v. Generico, LLC (Fed. Cir. 2019)
Nonprecedential disposition
Panel: Circuit Judges Lourie, O'Malley, and Reyna
Opinion by Circuit Judge O'Malley
The PTAB Goes to Europe: Four Recent Section 101 Decisions Designated as Informative

July 28, 2019

By Michael Borella —

On July 1, the Patent Trial and Appeal Board (PTAB) of the U.S. Patent and Trademark Office (USPTO) designated four of its recent 35 U.S.C. § 101 decisions as informative. Each of these decisions came down after and applied the USPTO's 2019 Revised Patent Subject Matter Eligibility Guidance. Two resulted in claims being found eligible, and two had the opposite outcome. While not binding on other PTAB panels or examiners, these cases are helpful in understanding how the PTAB is applying the Guidance. In particular, the PTAB appears to be utilizing the Guidance in a fashion that is similar to how the subject matter eligibility inquiry is employed in the European Patent Office and certain other jurisdictions — as consideration of whether the claimed invention is a technical solution to a technical problem.

The background of these decisions — not to mention the Guidance itself — is 2014's Alice Corp. vs. CLS Bank Int'l Supreme Court holding. Therein, the Court set forth a two-part test to determine whether claims are directed to patent-eligible subject matter under § 101. One must first decide whether the claim at hand involves a judicially-excluded law of nature, a natural phenomenon, or an abstract idea. If so, then one must further decide whether any element or combination of elements in the claim is sufficient to ensure that the claim amounts to significantly more than the judicial exclusion. But elements or combinations of elements that are well-understood, routine, and conventional will not lift the claim over the § 101 hurdle. While this inquiry is generally carried out as a matter of law, factual issues can come into play when determining whether something is well-understood, routine, and conventional.

Notably, the Guidance breaks the first part of the Alice test into two sub-steps. In the former, one determines whether the claim recites a judicial exception, such as an abstract idea. In the latter, one determines further "whether the recited judicial exception is integrated into a practical application of that exception." To focus the analysis, the Guidance indicates that all abstract ideas should fall into one of three categories: mathematical concepts, certain methods of organizing human activity, and mental processes. Think of these as the "Three M's" – math, money, and mental steps.

And now, on to the cases.

Ex Parte Fautz (U.S. Patent App. No. 14/326,661)

The claimed invention "generally relates to magnetic resonance (MR) tomography." An MR device "use[s] reception coils to receive signals generated while scanning a subject," and the "invention optimizes the signal-to-noise ratio (SNR) from the reception coils." The PTAB focused its review on representative claim 8:

The Examiner rejected the claim under § 101, finding it "similar to abstract ideas relating to mathematical formulas and collecting information, analyzing it, and displaying certain results of the collection and analysis." The Examiner further found that "the MR tomography apparatus is an additional element that is well-understood, routine, and conventional in the art," while the "data collection and display are insignificant extra-solution activity."

The PTAB disagreed. Applying the Guidance, the PTAB quickly concluded that under the first part of Alice, the claim recites an abstract idea — notably three distinct mathematical formulas. Continuing the inquiry, the PTAB then determined that the claim nonetheless integrates this abstract idea into a practical application thereof.

The PTAB found the claim to be similar in nature to that of Thales Visionix, Inc. v. United States, where mathematical concepts were used to solve a technical problem and that the recited device "is neither a token addition nor an abstract concept." To come to this conclusion, the PTAB looked to the application's specification which pointed out drawbacks to existing surface coils in MR systems — these coils can result in poor image quality. But, as described in the specification, the claimed invention improves the sensitivity of the coils, and thereby also improves image quality.

Accordingly, the PTAB concluded that the claim is not directed to an abstract idea, is eligible, and that the second part of the Alice test need not be considered.

Ex Parte Olson (U.S. Patent App. No. 11/715,923)

This second case involves a "locally deformable registration of a catheter navigation system to an external model or external image data such that the invention operates to transform the coordinate system of a catheter navigation system to the coordinate system of an external model or external image data." Representative claim 7 recites:

The Examiner found the claim abstract because it "relies upon collecting and comparing known information, comparing new and stored information and using rules to identify options, organizing information through mathematical correlations, which are considered an abstract idea." The Examiner further found that the claimed algorithm, the computer on which it runs, and the catheter navigation system, to all be generic. The Examiner also stated that "Appellants do not claim any new and novel structures for the catheter and catheter navigation system." Turning to part two of the Alice test, the Examiner found all of the additional elements to be well-known and conventional.

On appeal, the PTAB quickly determined that, through its explicit use of equations, the claim recites an abstract idea — particularly, a mathematical concept. But like Ex Parte Fautz, this abstract idea is integrated into a practical application.

To that point, the PTAB observed that the claim focuses on "addressing problems arising in the context of registering a catheter navigation system to a three-dimensional image in connection with cardiac procedures." Further, the limitations therein "apply the recited mathematical calculations to improve registration of a catheter navigation system to a three-dimensional image of a heart by accounting for non-linearities and inhomogeneities in the catheter navigation system and reduce errors in the localization field." Looking again to the specification, the PTAB noted that the invention provides a technical improvement of "avoid[ing] errors introduced in the prior art, such as those introduced when an affine transformation is used." The PTAB also found the claims to be analogous to those of Thales and Diamond v. Diehr, and that the mathematical concepts were applied to a particular machine — the catheter navigation system.

Thus, the PTAB concluded that the claim is not directed to an abstract idea, is eligible, and again declined to apply the second part of the Alice test.

Ex Parte Kimizuka (U.S. Patent App. No. 13/871,055)

The claimed invention involves software for selecting a golf club with a suitable lift angle for a player based on data from hit balls. According to this application's specification, "[a] club's loft angle relates to the orientation of its face and influences a hit ball's flight distance." Claim 7, which was deemed representative, recites:

A fitting method of a golf club, comprising the following steps of:
    creating a hit ball result database based on ball initial velocity prediction data, launch angle prediction data, and back spin prediction data, the ball initial velocity prediction data being data capable of predicting a ball initial velocity based on the dynamic loft and the blow angle, the launch angle prediction data being data capable of predicting a launch angle based on the dynamic loft and the blow angle, and the backspin prediction data being data capable of predicting a backspin based on the dynamic loft and the blow angle, wherein the hit ball result database is obtained by actual measurement and/or a simulation;
    measuring a subject's head speed, dynamic loft, and blow angle using a reference club;
    determining, by a processor, a suitable dynamic loft based on only the measured head speed, the measured dynamic loft, and the measured blow angle, the suitable dynamic loft being defined as a dynamic loft achieving a predetermined hit ball result, wherein the hit ball result database is used for determining the suitable dynamic loft, the hit ball result database includes correlation data between the dynamic loft and the blow angle which are created for each head speed, and the hit ball results in the dynamic lofts in the measured blow angle are compared using the hit ball result database;
    determining a dynamic loft difference from the suitable dynamic loft and the measured dynamic loft; and
    determining a recommended loft angle based on a loft angle of the reference club and the dynamic loft difference, wherein the hit ball result includes a flight distance.

The Examiner rapidly disposed of this claim, finding it directed to an abstract mental process, with all additional elements being well-understood, routine, and conventional. The PTAB generally agreed.

The PTAB began by stating that, under broadest reasonable interpretation, the claimed steps could be performed in the mind (the Guidance allows one to ignore general hardware — such as the claimed processor — when making this determination). Thus, the PTAB concluded that the claim recites an abstract idea.

Turning to the next step in the Alice part one inquiry, the PTAB considered whether the claim involves an improvement to a technology or technical field. The PTAB found that the golf club selection was a non-technical problem. Notably, the claim did not "improve how the measurements are taken or improve how the golf club is manufactured." The PTAB then reviewed the additional elements individually, finding that each is either a token element, is used for its intended purpose (and therefore is not improved), or embodies insignificant data collection. Therefore, the claim was found to be directed to an abstract idea under part one of the Alice test.

Applying part two (which is effectively quite similar to the second half of part one), the PTAB sought to determine whether the additional elements were just well-understood, routine, and conventional in the field. Indeed, the processor, database, and measurements (alone and in combination) were considered to fit this bill based on reasoning similar to why they failed to integrate the claimed abstract idea into a practical implementation.

Consequently the claim was deemed ineligible and the Examiner was affirmed.

Ex Parte Savescu (U.S. Patent App. No. 12/468,616)

Here, the claimed invention relates to software for creating "a life-cycle workflow for a project." Representative claim 1 recites:

A method for creating a life cycle workflow for a project comprising:
    creating one or more identifiable workflow stages for the project on a server computer, each of the one or more workflow stages corresponding to a specific sequence of workflow activities, wherein the creating further comprises using a workflow stage identifier as a property of the specific sequence of workflow activities for each of the one or more workflow stages;
    creating one or more identifiable workflow phases for the project on the server computer, each workflow phase includes one or more corresponding workflow stages;
    creating one or more project detail pages on the server computer, each project detail page being a web page that is made visible during a corresponding workflow stage;
    when a workflow stage is created, associating a workflow phase with the workflow stage, the workflow phase being selected from the one or more workflow phases on the server computer; and
    when the workflow stage is created, associating one or more project detail pages for the workflow stage.

The Examiner rejected the claim as being directed to an abstract idea without any additional elements that amount to significantly more than that idea. The PTAB affirmed the Examiner's rejections.

Applying the Guidance, the PTAB pointed to the business nature of the claim ("determining a project name, describing the project's purpose, defining a project's scope, among other things") as indicative of "a concept related to managing relationships or transactions between people." As such, the PTAB concluded that the claim recited certain methods of organizing human activity, one of the three categories of abstract ideas set forth in the Guidance.

Moving on the next phase of the first part of the Alice test, the PTAB identified the claimed server and the step of "creating one or more project detail pages on the server computer, each project detail page being a web page that is made visible during a corresponding workflow stage" as the additional elements. The PTAB found that the server was a generic computer, while the creation of project detail pages did not involve a technical improvement to how those pages were created. The PTAB also found that, at best, the claim automated a process that could have been carried out manually. All of this added up to a failure of the claim to integrate the abstract idea into a practical application.

Turning to part two of the Alice test, the PTAB looked to the additional elements again and found them to be well-understood, routine, and conventional features. Therefore, the claim did not provide an inventive concept, and was determined to be ineligible.

Analysis

There are a few lines of reasoning running through these four cases that are worth pointing out. For the two that were found meet the requirements of § 101, the claims therein are narrowly focused and provide a technical solution to a technical problem. For each, the technical problem and technical solution were described in the specification, and explicitly reflected in the claim language. On the other hand, for the two cases that failed the Alice test, the PTAB specifically stated that the claims were not addressing technical problems, and were broadly drafted.

This suggests that the PTAB may be following a variant of the European view that eligible subject matter must be directed to a technical solution to a technical problem. If so, that is problematic because there is no requirement in U.S. patent law that § 101 be applied so rigidly. In fact, the Federal Circuit found the claims in DDR Holdings v. Hotels.com to be eligible despite their being focused on a technical solution to a business (non-technical) problem.

Furthermore, a post-hoc evaluation of whether a claim is addressing a "technical" problem can be subjective. For example, an invention that provides real-time updating of graphical user interfaces that display data about service-level agreement compliance can be viewed as addressing a technical problem (real-time updating of the interfaces) or a non-technical problem (evaluating contractual conformity).

In any event, these four cases may help applicants determine whether a § 101 appeal to the PTAB makes sense. If your claims fall into the technical solution to a technical problem camp, then an appeal may be viable. Otherwise, you might be best off working a bit longer with the examiner.
Conference & CLE Calendar

July 28, 2019

August 15, 2019 – Technology Center 2800 customer partnership meeting (U.S. Patent and Trademark Office) – 11:30 am to 4:30 pm (ET) on

August 20, 2019 – "Section 101 Reform: Prospects and Pitfalls" (McDonnell Boehnen Hulbert & Berghoff LLP) – 10:00 am to 11:15 am (CT)

October 3-4, 2019 – Paragraph IV Disputes Master Symposium (American Conference Institute) – Chicago IL
MBHB Webinar on Section 101 Reform

July 27, 2019

McDonnell Boehnen Hulbert & Berghoff LLP will be offering a live webinar entitled "Section 101 Reform: Prospects and Pitfalls" on August 20, 2019 from 10:00 am to 11:15 am (CT). In this presentation, MBHB attorneys and Patent Docs authors Michael S. Borella and Kevin E. Noonan, and MBHB attorney Sarah E. Fendrick will discuss § 101 legislation introduced by Senators Tillis and Coons, and the process, politics, and prospects of meaningful legislative change, and the possible pitfalls in the legislation, from the political horse-trading certain to occur to the likelihood that the Supreme Court will find fault with any attempt to rein in their reconstruction of patent eligibility through judicial fiat. The webinar will address the following:

• The draft amendments to Sections 100, 101, and 112(f)
• The stakeholders positions: biotech, pharma, high tech, academics, "public interest groups"
• Issues solved and raised by the proposed amendments
• Likelihood of passage

While there is no fee to participate, attendees must register in advance. Those wishing to register can do so here. CLE credit is pending for the states of California, Illinois, New Jersey, New York, North Carolina, and Virginia.
USPTO to Hold TC 2800 Customer Partnership Meeting

July 27, 2019

The U.S. Patent and Trademark Office will be holding a customer partnership meeting of Technology Center 2800, related to examination of circuits and optics, from 11:30 am to 4:30 pm (ET) on August 15, 2019. The meeting will include discussions of the following topics:

• Quality
• TC 2800 Quality Initiatives
• Appeal and Pre-Appeal
• Interview Practice for Productive Prosecution
• Clarity Round Table
• Question and Answer Panel

The meeting will be held at the USPTO's Clara Barton Auditorium, 600 Dulany Street, Alexandria, VA. Those wishing to attend the meeting can register here. Additional information regarding the customer partnership meeting, including how to participate via WebEx, can be found here.
ACI Paragraph IV Disputes Master Symposium

July 27, 2019

American Conference Institute (ACI) will be holding its 7th Annual Paragraph IV Disputes Master Symposium on October 3-4, 2019 in Chicago IL. The conference will offer presentations on the following topics:

• A "Town Hall" Q&A Session — with industry leaders regarding what in-house counsel want from outside lawyers in Hatch-Waxman litigation
• Analysis of Hatch-Waxman Reform Proposals
• The Effects of Recent FDA Initiatives on Generic Drug Access and ANDA Litigation
• Written Description and Subject Matter Eligibility challenges in Paragraph IV Litigation
• Doctrine of Equivalents and its Effect on Hatch-Waxman Litigation
• Magistrate Judge Town Hall on Role of Magistrates in Paragraph IV Proceedings
• View from the Bench on trends, settlements, and timing from District Court Judge Chesler (D.N.J.)
• Breakfast with three PTAB Judges
• The Interplay between District Court ANDA Litigation and IPRs before the PTAB
• FTC Keynote: Antitrust Developments Concerning Brands & Generics
• Practical Strategies and Tactics for Effective Settlement Negotiations
• The Global Approach to Pharmaceutical Patent Litigation
• Understanding the Federal Circuit's "Blocking Patent" Doctrine post Acorda
• "Unique" Pleadings Requirements for Rule 12(b) and 12(c) Motions in Hatch-Waxman Actions
• Ethics: The Ethical Practice of Paragraph IV Litigation: New Developments Impacting Professional Responsibility in the Hatch-Waxman Arena

In addition, two post-conference workshops will be offered on October 2, 2019. The first, entitled "The Three C's: An Intimate Discussion on the Expectations of In-house Counsel from their Law Firm Partners" by the Hatch-Waxman Series Advisory Board will be offered from 9:00 am to 12:00 pm, and the second, entitled "Working Group on Biosimilars for the Hatch-Waxman Litigator" will be offered from 1:00 to 4:30 pm.

The agenda for the Paragraph IV Disputes Master Symposium can be found here. More information regarding the workshops can be found here and here. A complete brochure for this conference, including an agenda, detailed descriptions of conference sessions, list of speakers, and registration form can be obtained here.

The registration fee for the conference alone is $2,195 (or a special $1,595 in-house rate for pharmaceutical), or $3,295 ($2,695) for the conference and both workshops if registered before July 26th. Patent Docs readers are entitled to a 10% discount off of registration using discount code D10-815-815DX01. Those interested in registering for the conference can do so here, by e-mailing CustomerService@AmericanConference.com, or by calling 1-888-224-2480.

Patent Docs is a media partner of ACI's 7th Annual Paragraph IV Disputes Master Symposium.
The Proper Role of the Federal Circuit

July 25, 2019

By Kevin E. Noonan —

There has been much commentary, some of it incendiary, regarding whether the Court of Appeals for the Federal Circuit is fulfilling its responsibilities under its enabling statute or failing to provide the proper pro-patent perspective in its response and implantation of the Supreme Court's jurisprudence regarding subject matter eligibility under 35 U.S.C. § 101. The problem is illustrated by the comments provided by two members of the Court, Judges Lourie and O'Malley, in their concurrence and dissent, respectively, with the Court's per curiam denial of en banc review in Athena Diagnostics Inc. v. Mayo Collaborative Services, LLC.

Judge Lourie voices the view, first enunciated by Judge Linn in Ariosa Diagnostics, Inc. v. Sequenom, Inc., that as an inferior appellate court, its hands are tied by the Supreme Court's decisions in Mayo Collaborative Services v. Prometheus Laboratories, Inc., Alice Corp. Pty. Ltd. v. CLS Bank Int'l, and Association for Molecular Pathology v. Myriad Genetics, Inc.:

If I could write on a clean slate, I would write as an exception to patent eligibility, as respects natural laws, only claims directed to the natural law itself, e.g., E=mc2, F=ma, Boyle's Law, Maxwell's Equations, etc. I would not exclude uses or detection of natural laws. The laws of anticipation, obviousness, indefiniteness, and written description provide other filters to determine what is patentable. . . . But we do not write here on a clean slate; we are bound by Supreme Court precedent.

This view is apparently shared by seven of the Court's twelve members. Judge O'Malley enunciates the countervailing view regarding what the Court should do to change this state of affairs, stating her opinion that the Court has gone astray in slavishly and too stringently applying the Supreme Court's precedent to unnecessarily restrict the scope of what is eligible (particularly with regard to diagnostic method claims, including the ones at issue before the Court in Athena):

I agree with all my dissenting colleagues that our precedent applies the Supreme Court's holding in Mayo Collaborative Services v. Prometheus Laboratories, Inc., 566 U.S. 66 (2012) too broadly. I write separately, however, because I believe that confusion and disagreements over patent eligibility have been engendered by the fact that the Supreme Court has ignored Congress's direction to the courts to apply 35 U.S.C. sections 101, et seq ("Patent Act") as written. Specifically, the Supreme Court has instructed federal courts to read into Section 101 an "inventive concept" requirement—a baffling standard that Congress removed when it amended the Patent Act in 1952. I encourage Congress to amend the Patent Act once more to clarify that it meant what it said in 1952.

It is clear that Congress is the ultimate (or perhaps only) solution. But if Judge O'Malley identifies the Federal Circuit's complicity in engendering the current situation, Judge Newman in dissent enumerates the Court's application of Supreme Court precedent to diagnostic method claims, all of these decisions invalidated the patents at issue:

1. In re BRCA1- & BRCA2-Based Hereditary Cancer Test Patent Litigation, 774 F.3d 755 (Fed. Cir. 2014). The claimed invention is a method for screening for genes linked to inherited breast and ovarian cancer, by analyzing for certain mutations in the DNA. The court held the claims ineligible under section 101 as directed to a law of nature, and also held that identifying genetic mutations is an ineligible abstract idea.

2. Ariosa Diagnostics, Inc. v. Sequenom, Inc., 788 F.3d 1371 (Fed. Cir. 2015). The claimed invention is a method for detecting paternally-inherited fetal abnormalities by analyzing the blood or serum of a pregnant female. The court held the claims ineligible under section 101, while recognizing that "detecting cffDNA in maternal plasma or serum that before was discarded as waste material is a positive and valuable contribution to science." Id. at 1380.

3. Genetic Technologies Ltd. v. Merial L.L.C., 818 F.3d 1369 (Fed. Cir. 2016). The claimed invention is a method for detecting a coding region of DNA based on its relationship to non-coding regions, by amplifying genomic DNA with a primer spanning a non-coding sequence in genetic linkage to an allele to be detected. The court stated that "the patent claim focuses on a newly discovered fact about human biology," id. at 1376, and that this is a law of nature and is ineligible subject matter under section 101.

4. Cleveland Clinic Foundation v. True Health Diagnostics LLC, 859 F.3d 1352 (Fed. Cir. 2017). The claimed invention is a method for diagnosing risk of cardiovascular disease by analyzing for the enzyme myeloperoxidase ("MPO"). The court held that even though prior methods for detecting MPO were inferior, the discovery of how to directly analyze for MPO, and discovery of the relation to the risk of cardiovascular disease, although "groundbreaking, 'even such valuable contributions can fall short of statutory patentable subject matter.'" Id. at 1363 (quoting Ariosa, 788 F.3d at 1380).

5. Roche Molecular Systems, Inc. v. CEPHEID, 905 F.3d 1363 (Fed. Cir. 2018). The claimed invention is a method for detecting the pathogenic bacterium Mycobacterium tuberculosis ("MTB"), based on nucleotide content and a novel method of analysis. The court stated that the method is new, unobvious, and "both faster and more accurate than the traditional MTB detection methods," id. at 1366, but held that the method is ineligible under section 101.

6. Cleveland Clinic Foundation v. True Health Diagnostics LLC, 760 F. App'x 1013 (Fed. Cir. 2019). The claimed invention is the novel immunoassay to detect the correlation between blood MPO levels and cardiovascular disease. The court held that the claims are for a law of nature and ineligible under section 101.

(Including Athena there are seven such cases.) (Conversely, as Judge Newman notes in her dissent, the Federal Circuit has repeatedly affirmed eligibility of "method of treatment" claims, in Rapid Litigation Management Ltd. v. CellzDirect, Inc.; Vanda Pharmaceuticals Inc. v. West-Ward Pharmaceuticals International Ltd.; Natural Alternatives Int'l, Inc. v. Creative Compounds, LLC; and Endo Pharmaceuticals Inc. v. Teva Pharmaceuticals USA, Inc.)

Both Judge Moore (writing in dissent) and Judge Chen (concurring) also recognize the problematic nature of the Court's jurisprudence on patent eligibility. And each agree with Judge O'Malley that Congress alone can address the issue, Judge Moore stating that:

In the wake of Mayo, we have painted with a broad brush, suggesting that improved diagnostic techniques are not patent eligible. Mayo did not go so far, and given the import of diagnostic techniques, we should reconsider this case and clarify our precedent. Because my colleagues have declined to do so, there are no more options at this court for diagnostic patents. My colleagues' refusal deflates the Amici's hopeful suggestion that our precedent leaves the eligibility of a diagnostic claim in front of the Federal Circuit "uncertain." It is no longer uncertain. Since Mayo, every diagnostic claim to come before this court has been held ineligible. While we believe that such claims should be eligible for patent protection, the majority of this court has definitively concluded that the Supreme Court prevents us from so holding. No need to waste resources with additional en banc requests.

For those keeping score, it appears that all (or almost all) of the members of the Court believe that their patent eligibility cases have been wrongly decided. Chief Judge Prost, joined by Judges Lourie, Dyk, Reyna, Hughes, Taranto, and Chen believe the Court's hands are tied by Supreme Court precedent, while Judges Newman, Moore, O'Malley, Wallach, and Stoll believe the Federal Circuit has the basis to distinguish Supreme precedent and hold these claims (or at least claims 7-9 of Athena's claims at issue) are patent eligible.

Judge O'Malley provides an additional avenue for Congressional intervention, related to the Supreme Court's resurrection of the "inventive concept" trope many believed was relegated to the dustbin of history by Section 103 in Giles Sutherland Rich's revision resulting in the 1952 Patent Act. She provides an alternative to Senator Tillis' and Coons' proposed statutory abrogation of the judicial exceptions (which raises its own issues on Congressional authority and the Supreme Court's oversight on ultra vires legislative actions). Judge O'Malley's suggestion is direct:

Had the Supreme Court not disregarded Congress's wishes for a second time [by introducing "inventive concept" into its Section 101 calculus], perhaps the outcome in this case would be different. . . . Indeed, claims directed to uses of natural laws rather than the natural laws themselves would be eligible under § 101 as written. Because the Supreme Court judicially revived the invention requirement and continues to apply it despite express abrogation, I dissent to encourage Congress to clarify that there should be no such requirement read into § 101; to clarify that concepts of novelty and "invention" are to be assessed via application of other provisions of the Patent Act Congress designed for that purpose.

The issue for the Federal Circuit is not just that their views are so fractured, but that the dissension between the Judges regarding whether they should simply apply Supreme Court precedent (even incorrectly) until such time as the Supreme Court deign to address the issue, or whether their "special expertise" and Congressional mandate creates a responsibility to distinguish the Supreme Court's precedent when it does not properly apply, at least to provide incentive to the Supreme Court to provide (in its view) the correct interpretation of what is and what is not patent eligible. In at least the view of five of the judges (and many in the patent bar) the Federal Circuit has failed in exercising it responsibility, to the extent that many openly speculate whether we need the Federal Circuit at all.
Indivior Inc. v. Dr. Reddy’s Laboratories, S.A. (Fed. Cir. 2019)

July 24, 2019

By Kevin E. Noonan —

Last month, the Federal Circuit affirmed decisions from four separate trials in the District of Delaware involving seven different defendants regarding validity and infringement of patents directed to an opioid addiction treatment in Indivior Inc. v. Dr. Reddy's Laboratories, S.A.

The case arose in ANDA litigation over Indivior's suboxone film product Suboxone®, a rapidly dissolving film formulation of two active ingredients: buprenorphine, which decreases a patient's need for opioids, and naloxone, which deters abuse. The challenge for such formulations is drug content uniformity, i.e., having the ingredients homogeneously distributed in the films, which are produced from larger sheets that are cut into individual dosage units based on a particular size and shape to provide the appropriate dose of each drug. U.S. Patent Nos. 8,017,150, 8,603,514, and 8,900,497, licensed by Indivior from Aquestive Therapeutics, Inc., disclose methods for mixing the drugs with a polymer, casting the mixture to produce a wet film, and then "controllably drying the film to produce a solid sheet having less than ten percent variance in active ingredient throughout any given area." Relevant to the issues before the Court, prior art methods (involving drying the films by applying warm air to only the top surface) were inadequate to achieve content uniformity, with films produced in this manner having a "rippled" surface. The invention overcame these limitations by "applying heat to the bottom of the film, introducing controlled microwaves, controlling the air flow above and beneath the film, and employing furnace filters." A fourth patent, U.S. Patent No. 8,475,832, claims film formulations per se and is owned by Indivior.

The specification of the '514 patent disclosed that "drug content uniformity is required by regulatory authorities yet difficult to achieve in practice because of problems in manufacturing the films" and "[m]ultiple factors in the film-making process can affect uniformity." According to the claims of the '514 patent, "(1) the viscosity of the matrix must be "sufficient to aid in substantially maintaining non-self-aggregating uniformity" of the active ingredients (the "viscosity limitation"); and (2) the matrix must be "capable of being dried without loss of substantial uniformity of the active [ingredients]" (the "drying limitation"). The specification further discloses that "using conventional drying methods, which apply hot air to the top of the film, produces nonuniform films." To overcome these issues, "the specification discloses controlled drying processes that differ from conventional techniques" that include "controlled bottom drying or controlled microwave drying." The '150 patent is directed to uniform pharmaceutical films themselves and components thereof.

Indivior brought suit against Dr. Reddy's Laboratories (S.A and Inc. entities); Watson Laboratories Inc.; Actavis Laboratories UT, Inc.; Teva Pharmaceuticals USA Inc.; Par Pharmaceuticals, Inc.; Intelgenx Technologies Corp.; and Alvogen Pine Brook, LLC. The parties had engaged in ANDA litigation involving the '514, '497, and 150 patents brought in the District of Delaware. Claim 62 of the '514 patent and claim 1 of the '150 patent are informative:

62. A drug delivery composition comprising:
    (i) a cast film comprising a flowable water-soluble or water swellable film-forming matrix comprising one or more so substantially water soluble or water swellable polymers; and a desired amount of at least one active;
    wherein said matrix has a viscosity sufficient to aid in substantially maintaining non-self-aggregating uniformity of the active in the matrix;
    (ii) a particulate active substantially uniformly stationed in the matrix; and
    (iii) a taste-masking agent selected from the group consisting of flavors, sweeteners, flavor enhancers, and combinations thereof to provide taste- masking of the active;
    wherein the particulate active has a particle size of 200 microns or less and said flowable water-soluble or water swellable film-forming matrix is capable of being dried without loss of substantial uniformity in the stationing of said particulate active therein; and
    wherein the uniformity subsequent to casting and drying of the matrix is measured by substantially equally sized individual unit doses which do not vary by more than 10% of said desired amount of said at least one active.

1. A mucosally-adhesive water-soluble film product comprising:
    an analgesic opiate pharmaceutical active; and
    at least one water-soluble polymer component consisting of polyethylene oxide in combination with a hydrophilic cellulosic polymer;
    wherein:
        the water-soluble polymer component comprises greater than 75% polyethylene oxide and up to 25% hydrophilic cellulosic polymer;
        the polyethylene oxide comprises one or more low molecular weight polyethylene oxides and one or more higher molecular weight polyethylene oxides, the molecular weight of the low molecular weight polyethylene oxide being in the range 100,000 to 300,000 and the molecular weight of the higher molecular weight polyethylene oxide being in the range 600,000 to 900,000; and
        the polyethylene oxide of low molecular weight comprises about 60% or more in the polymer component.

Indivior accused Dr. Reddy's Labs of infringing the '514 and '150 patents, and both Dr. Reddy's Labs and Watson of infringing the '497 patent; Watson of infringing the '514 and '832 patents; and Alvogen of infringing the '514 and '497 patents. (In a footnote, the opinion identifies the '514 patent claims asserted by Indivior against the various defendants: claims 62–65, 69, 71, and 73 against Dr. Reddy's Labs; claims 62, 64, 65, 69, and 73 against Watson; and claims 62, 63, 65, 69, 71, and 73 against Alvogen.)

In four bench trials the District Court found the '514, '497, and '150 patents were not invalid for obviousness and the '514 patent was not invalid for indefiniteness. Regarding infringement, the Court found Watson infringed the '514 patent under 35 U.S.C. § 271(e)(2), but that Dr. Reddy's Laboratories did not infringe the '514 patent nor the '150 patent, and Alvogen Pine Brook did not infringe the '514 patent. Finally, the District Court found claims 15-19 of the '832 patent to be invalid. (The Patent Trial and Appeal Board held claims 15–19 unpatentable as anticipated and obvious in a separate, parallel inter partes review proceeding.)

The Federal Circuit affirmed all the District Court's determinations but vacated invalidation of claims 15-19 of the '872 patent as moot in view of the PTAB's IPR decision, in a decision by Judge Lourie joined by Judge Newman; Judge Mayer dissented based on his differing reading of the references asserted by Defendants against both the ‘514 and ‘150 patents. The opinion sets forth its basis for affirming the District Court's finding of non-infringement of the '514 patent by Dr. Reddy's Laboratories and Alvogen based on claim construction of the drying limitation. In both cases, the District Court construed the drying limitation of the '514 patent claims to mean "dried without solely employing conventional convection air drying from the top," and further that patentee's specification disclaimed (indeed, disparaged; see "Indivior Inc. v. Dr. Reddy's Laboratories, S.A. (Fed. Cir. 2018)") conventional convection air drying from the top surface of the film. Similarly, the Court found that Alvogen's film manufacturing process dries the films primarily from the top and does not satisfy the drying limitation recited in the '514 patent claims. Finding that Defendants used conventional convection air drying from the top surface of the film, the District Court found that Defendants did not infringe and the Federal Circuit affirmed.

Regarding the District Court's determination that Watson infringed the '514 patent, the Federal Circuit held that the District Court did not abuse its discretion when it properly refused to reopen its judgment under Federal Rule of Civil Procedure 59. Watson had amended its ANDA to eliminate bottom heating sources, but had not requested construction of the drying limitation in the claims of the '514 patent. On these facts, the Federal Circuit found "no manifest injustice" in the District Court's decision despite the different outcomes for two generic versions of Indivior's patented films. Separate trials had utilized separate strategies: Dr. Reddy's Labs and Watson challenged the drying limitation in one case, but Watson did not in the other, and this justified the disparate outcomes regarding infringement. The Federal Circuit opinion noted that "it is neither unusual nor unjust for a party to be bound by its litigation decisions, particularly here where Watson was fully aware of but did not request the claim construction it now seeks." In addition, accepting the broader construction of this term strengthened Watson's invalidity position but at the expense of its noninfringement case. On the merits, the District Court found that the viscosity of Watson's generic films fell "squarely within the most preferred range identified in the '514 patent." The Federal Circuit found no clear error in this determination and affirmed.

Regarding infringement of the '150 patent claims under Indivior's doctrine of equivalents contentions, the opinion notes that claim 1 of the '150 patent recites a pharmaceutical film with: (1) "at least one water-soluble polymer component consisting of polyethylene oxide [PEO] in combination with a hydrophilic cellulosic polymer [HCP]"; wherein (2) "the water-soluble polymer component comprises greater than 75% [PEO] and up to 25% [HCP]"; (3) the PEO comprises at least one L-PEO and at least one H-PEO; and (4) the L-PEO "comprises about 60% or more in the polymer component." It was undisputed that Dr. Reddy's Labs substituted polyvinyl pyrrolidone for hydrophilic cellulosic polymer, and the District Court held that Indivior could not capture these formulations under the doctrine of equivalents because embodiments of the claimed films comprising PVP were disclosed in the '150 patent specification but not claimed. Hence these embodiments were dedicated to the public according to the District Court, citing Johnson & Johnston Assocs. Inc. v. R.E. Serv. Co., 285 F.3d 1046, 1054 (Fed. Cir. 2002) (en banc). The Federal Circuit found no clear error in this determination and affirmed.

Turning to Defendants' various invalidity contentions, the Federal Circuit affirmed the District Court's finding that the claims of the '514 patent were not indefinite. The basis for Watson's indefiniteness contention focused on the claim term "cast film comprising a flowable water-soluble or water swellable film-forming matrix" because the film is not "flowable" in its final dosage form. Watson's position was that the recited property needed to be possessed by accused infringing article, but the District Court disagreed and analogized to the Gemtron Corp. v. Saint-Gobain Corp., 572 F.3d 1371, 1375–76 (Fed. Cir. 2009) case, where the claimed property was only present during assembly. The Federal Circuit characterized as nonsensical the argument (which Watson and Teva advanced at trial) that the finished film product needed to be flowable to fall within the scope of the claim. The Federal Circuit agreed with the District Court that "a product claim may recite elements 'in the state in which they exist during manufacture, before the final product exists'" and thus the claims were not indefinite.

The Court also affirmed the District Court's decision that the claims of the '514 patent were not obvious. Dr. Reddy's Labs asserted three prior art references at trial: U.S. Patent Nos. 4,849,246 ("Schmidt"), 6,552,024 ("Chen"), and 5,881,476 ("Strobush"). The '246 patent discloses methods for making pharmaceutical films but Indivior proffered persuasive expert testimony that the uniformity of the film not assessed. The '024 patent taught top-air drying pharmaceutical films. And the '476 patent taught methods for drying non-pharmaceutical films without introducing "mottle." The District Court found insufficient motivation to combine these references on two grounds. First, there was no evidence that the '246 and '024 patents disclosed uniform drug content as a property of the disclosed films (a property required of the claimed invention), and second, the status of pharmaceutical films was "nascent." In addition, the Court noted that there was even less motivation to combine the '476 patent because this reference did not disclose not a pharmaceutical film. Finally, Indivior asserted evidence of secondary considerations that supported its nonobviousness position.

The Federal Circuit found no clear error on these facts. It found Dr. Reddy's Labs' arguments disputing the level of skill in the art used by the District Court to be "nitpicking," and that the District Court properly relied on expert testimony regarding the relationship between "mottle" in the prior art and uniformity as recited in the '514 patent claims. The assertion by Dr. Reddy's Labs of the skilled artisan's expectation of success was undercut, in the Court's view, by the "multiple factors throughout the manufacturing process that contribute to the uniformity of pharmaceutical films, that adjusting the various factors would have been unintuitive, and that the field was still emergent at the time of invention." The Federal Circuit found no clear error in District Court's finding regarding the totality of the evidence for these facts and affirmed the nonobviousness of the '514 patent claims.

Finally the Federal Circuit affirmed the District Court's determination that Watson had not established by clear and convincing evidence that the claims of the '150 patent were obvious. This determination rested on whether the '150 patent was entitled to the priority date of the earlier-filed U.S. Provisional Patent Application No. 60/473,902, i.e., whether that application satisfied the disclosure requirements of 35 U.S.C. § 112 for the '150 patent claims. The District Court held that the priority claim was proper (and thus the '150 patent claims were not obvious), relying expressly on the following disclosure in the '902 application:

For instance, certain film properties, such as fast dissolution rates and high tear resistance, may be attained by combining small amounts of high molecular weight PEOs with larger amounts of lower molecular weight PE[O]s. Desirably, such compositions contain about 60% or greater levels of the lower molecular weight PEO in the PEO-blend polymer component.

To balance the properties of adhesion prevention, fast dissolution rate, and good tear resistance, desirable film compositions may include about 50% to 75% low molecular weight PEO, optionally combined with a small amount of a high molecular weight PEO, with the remainder of the polymer component containing a hydrophilic cellulosic polymer (HPC or HPMC).

The Federal Circuit found no clear error in this determination by the District Court because "the application discloses that a polymer component with 60% L-PEO has desirable properties and that the remainder of the component may include H-PEO and HCP," consistent with '150 patent claims.

Indivior Inc. v. Dr. Reddy's Laboratories, S.A. (Fed. Cir. 2019)
Panel: Circuit Judges Newman, Mayer, and Lourie
Opinion by Circuit Judge Lourie; dissenting opinion by Circuit Judge Mayer
Mayne Pharma Int’l v. Merck Sharp & Dohme Corp. (Fed. Cir. 2019)

July 23, 2019

By Kevin E. Noonan —

The Federal Circuit continued its explication of the circumstances wherein an inter partes review petition is time-barred under 35 U.S.C. § 315(b) in Mayne Pharma Int'l v. Merck Sharp & Dohme Corp., decided earlier this month, and as a bonus, illustrated how including disclosure in a specification for completeness and expanded claim scope can result in an invalidated claim when that scope unnecessarily encompasses the prior art.

The case arose as an appeal from the decision of the Patent Trial and Appeal Board (PTAB) in inter partes review of U.S. Patent No. 6,881,745 that claims 2, 6, and 9-14 are invalid as anticipated or obvious. The '745 patent claims pharmaceutical formulations of azole antifungal drugs having the distinguishing feature that they are almost insoluble in water. This limits their therapeutic effectiveness because it results in poor bioavailability inter alia due to low absorption. The claims of the '745 patent are directed to formulations having improved bioavailability; claim 9 is representative:

A pharmaceutical composition, consisting essentially of:
    about 100 mg of an azole antifungal drug; and
    one or more polymer[s] having acidic functional groups; and
    optionally one or more additional ingredients selected from the group consisting of a disintegrant, a diluent, a filler, an inert solid carrier, an inert solid matrix, a lubricant, a glidant, a colouring agent, a pigment, a flavour, water, ammonia, an alkaline agent, and methylene chloride,
    wherein in vivo the composition provides a mean CMAX of at least 100 ng/ml, after administration in the fasted state.

(where the italicized claim terms are relevant for the issues before the Court). Claims 6, 12, 13, and 14 further require a mean area under the curve (AUC) value of at least 800 ng-h/ml. Although the Board instituted on three grounds, Mayne Pharma cancelled claims 1, 3, 5, and 6, rendering one of the grounds moot. The remaining grounds decided by the PTAB were: 1) that claims 2, 6, 9, 11, 12, and 14 were anticipated by a scientific journal article to Kai, and 2) that these claims and claims 10 and 13 were obvious over the combination of Kai with two additional references (PCT Publication No. WO 98/00113 and European Patent Application No. EP 1027866). Mayne appealed, arguing: 1) that the PTAB had erred because the IPR was time barred under § 315(b), and 2) by not limiting the claims to non-toxic embodiments of the claimed formulations.

The Federal Circuit affirmed, in an opinion by Judge Lourie, joined by Judges Dyk and O'Malley. The circumstances surrounding Mayne Pharma's assertion of the § 315(b) time bar were that the real party in interest was Merck & Co. instead of Merck Sharp & Dohme Corp. (relevant because of earlier litigation outside the one-year limit for instituting an IPR after a complaint alleging patent infringement lawsuit has been served). Mayne Pharma raised this issue throughout the proceedings before the PTAB, starting at the institution phase and throughout the review proceedings. The Board eventually acquiesced, but refused to change the petition filing date, on the grounds that this would both "promote[] the core functions" from the PTAB Trial Practice Guide as well as "serv[ing] the interests of justice." Mayne Pharma argued that the PTAB's own rules, specifically 37 C.F.R. § 42.104, permitted amendments to the petition without penalty regarding the filing date only for "clerical or typographical mistakes," which was not the case here. Merck argued that the issue was beyond the scope of Federal Circuit review under § 314(d) and consistent with the Supreme Court's decision in Cuozzo Speed Technologies, LLC v. Lee, 136 S. Ct. 2131 (2016). In the alternative, Merck argued that the Board ruled within the scope of its discretion in deciding not to alter the petition filing date when adding MCI as the real party in interest. The issue is sufficiently important to the PTAB that the PTO intervened in the appeal in support of Merck's position.

The panel decided that there was no need to address the appealability issue because the § 314(d) bar is not a jurisdictional issue. And in any event, the panel opined that the Board "committed no reversible error" and thus appealability is not an issue. On the merits, the Federal Circuit made reference to the Trial Practice Guide for the purpose of identifying the real party in interest, which is to "identify[] conflicts and assure[] proper application of statutory estoppel." The Board properly found (according to the panel opinion) that there was no evidence of "bad faith, or prejudice to a patent owner caused by the delay," or "intentional concealment, . . . bad faith on MSD's part, [an] attempt to circumvent the estoppel rules, or any other material benefit to it in its delay," permitting amendment to the identify of the real party in interest was "in the interest of justice under § 42.5(c)(3)." After citing the provisions of the Leahy-Smith America Invents Act granting the PTO the discretion to promulgate rules to effectuate Congressional intent regarding inter partes review, and the principles regarding proper judicial deference to administrative agency rulemaking pursuant to Chevron, U.S.A., Inc. v. Natural Resources Defense Council, Inc., 467 U.S. 837 (1984), the panel affirmed the Board's decision based on the "interests of justice." These interests would not be promoted, in the Court's opinion, by "unwinding the proceedings" and reversing the Board's decision. And the Court further found that the primacy of § 42.104(c) purported by Mayne Pharma in support of reversing the Board was inconsistent with the Board having expressly determined that a petitioner could change the real party in interest without changing the petition filing date in Elekta Inc. v. Varian Med. Sys., Inc., No. IPR 2015-01401, 2015 WL 9898990, at *5 (P.T.A.B. Dec. 31, 2015), and Lumentum Holdings, Inc. v. Capella Photonics, Inc., No. IPR2015-00739, 2016 WL 2736005, at *3 (P.T.A.B. Mar. 4, 2016), as well as the Court's own precedent, citing Wi-Fi One, LLC v. Broadcom Corp., 878 F.3d 1364 (Fed. Cir. 2018).

Turning to the merits of the Board's invalidation decision, the panel noted that the Board had given the claims their broadest reasonable interpretation regarding the term "pharmaceutical composition." Specifically, under this construction the Board considered both toxic and substantially non-toxic embodiments of azole antifungal drugs. Mayne argued that their proffered construction was consistent with the parameters for the claimed formulations set forth in the "wherein" clauses of the challenged claims (referring to the pharmacokinetic characteristics of the claimed formulations in humans). The Board had based its construction on the presence in the specification of toxic azole antifungal drugs such as saperconazole as well as (relatively) non-toxic azole antifungal drugs such as itraconazole. And the "wherein" clauses were not limiting because their effect on claim scope was to limit the claims to "in vivo" applications, which could encompass administration to animals as well as human beings.

Applying this construction to Merck's anticipation and obviousness contentions, the Board found that Kai disclosed all the elements of the claimed formulation as administered to beagle dogs. Regarding the obviousness case, the Board found sufficient motivation to combine the cited references, and a reasonable expectation of success. Finally, the Board considered and rejected secondary considerations of non-obviousness asserted by Mayne Pharma.

The Federal Circuit also affirmed this portion of the Board's decision, applying the substantial evidence standard to the factual portions of the decision and reviewing claim construction de novo. The panel agreed that the claims were not limited to non-toxic azole antifungal formulations, despite the modifier in the claims that these were "pharmaceutical" compositions based on (in hindsight, ill-advised) language in the specification. In view of this language, and the panel's understanding that "few pharmaceuticals are free of toxic effects in some circumstances and dosages," the Federal Circuit found no basis to import a limitation of non-toxicity into the claim. The opinion also credits the Board's understanding that extrinsic evidence supports the Board's construction. Similarly, the panel affirmed the Board's construction not to be limited to administration to humans, in the face of a rather creative argument by Mayne Pharma that "in vivo" applies to plants as well as animals, and the pharmacokinetic properties recited in the claims are "irrelevant" to plants. The Board's construction was consistent with the broadest reasonable interpretation of these claims, according to the opinion, based again on the express language in the specification. The correctness of the Board's claim construction being the only bases for error asserted by Mayne Pharma, the Federal Circuit affirmed the Board's invalidation of the claims of the '745 patent.

Mayne Pharma Int'l v. Merck Sharp & Dohme Corp. (Fed. Cir. 2019)
Panel: Circuit Judges Lourie, Dyk, and O'Malley
Opinion by Circuit Judge Lourie
Yu v. Apple Inc. (N.D. Cal. 2019)

July 22, 2019

Patent Claims for Digital Camera Are Not Patent Eligible

By Joseph Herndon —

In two related actions in the U.S. District Court for the Northern District of California brought by Yanbin Yu and Zhongxuan Zhang (patentee), Apple Inc. and Samsung Electronics Co., Ltd. were sued for infringement of U.S. Patent No. 6,611,289, entitled "Digital Cameras Using Multiple Sensors with Multiple Lenses". The dispute is over use of dual-lens cameras in cell phones. Yu alleged that the dual-lens cameras in Apple and Samsung cell phones infringe the '289 patent.

Apple moved to dismiss for patent ineligibility under 35 U.S.C. § 101, and Samsung joined the motion. In Defendants' view, the asserted claims cannot be patented because they "are directed to the abstract idea of creating an image by using one image to enhance another image," without any saving inventive concept. The Court agreed and dismissed the complaints.

The '289 Patent

The '289 patent issued August 26, 2003, and is directed to improving digital photos that were said to lack resolution and dynamic color range of traditional film images. The patent claims an invention of a digital camera capable of producing high resolution images with better colors and details in a greater range through an arrangement of multiple image sensors, lenses, and a processor to produce high quality and film-like true color digital images.

Claim 1 is representative and recites:

1. An improved digital camera comprising:
    a first and second image sensor closely positioned with respect to a common plane, said second image sensor sensitive to a full region of visible color spectrum;
    two lenses, each being mounted in front of one of said two image sensors;
    said first image sensor producing a first image and said second image sensor producing a second image;
    an analog-to-digital converting circuitry coupled to said first and said second image sensor and digitizing said first and said second intensity images to produce correspondingly a first digital image and a second digital image;
    an image memory, coupled to said analog-to-digital converting circuitry, for storing said first digital image and said second digital image; and
    a digital image processor, coupled to said image memory and receiving said first digital image and said second digital image, producing a resultant digital image from said first digital image enhanced with said second digital image.

Patent Ineligibility under Section 101

For the merits of the Section 101 issue, the scope of patentable subject matter includes "any new and useful process, machine, manufacture, or composition of matter, or any new and useful improvement thereof." 35 U.S.C. § 101. But, of course, abstract ideas are specific exceptions to § 101's broad patent-eligibility principles. According to Alice, Courts must distinguish between patents that claim the building blocks' of human ingenuity and those that integrate the building blocks into something more, because overbroad patent protection would risk disproportionately tying up the use of the underlying ideas.

Applying the two-step analysis of Alice, the District Court first determined whether the claims at issue are directed to a patent-ineligible concept such as an abstract idea.

Claim 1 recites a digital camera, comprising "[1] a first and a second image sensor closely positioned with respect to a common plane . . . [2] two lenses . . . [3] said first image sensor producing a first image and said second image sensor producing a second image . . . [4] an analog-to-digital converting circuitry coupled to said first and said second image sensor . . . [5] an image memory . . . and [6] a digital image processor . . . producing a resultant digital image from said first digital image enhanced with said second digital image."

The Court concluded that this plain language makes clear that claim 1 is drawn to the abstract idea of taking two pictures and using those pictures to enhance each other in some way. The Court stated that since the earliest years of the photographic medium, those having skill in the art have used multiple exposures, or the combining of multiple images, to enhance images.

From a patent attorney's viewpoint, however, if the issue is that it has been known for some time to use multiple exposures, surely that issue would be better addressed under 35 U.S.C. § 102 or 35 U.S.C. § 103 as a prior art issue, and not as a patent eligibility issue. But I digress.

Next, the Court noted that the claims here are defined only in terms of their functions. For support of this statement, the Court noted that the '289 patent does not require special hardware or software, but instead, describes that "there is a great need for a generic solution that makes digital cameras capable of producing high resolution images without enormously incurring the cost of photosensitive chips with multimillion photocells."

This is an odd statement by the Court, however, since the claim explicitly recites structure of the camera (e.g., a first and second image sensor closely positioned with respect to a common plane, . . . two lenses, each being mounted in front of one of said two image sensors), so the claim in fact is not "only" defined in terms of function.

The patentee attempted to equate Thales Visionix Inc. v. United States, 850 F.3d 1343 (Fed. Cir. 2017), to the present case. Thales upheld a patent that dealt with an arrangement of sensors, and Yu contends the result should be the same here because the '289 patent similarly instructs a "particular configuration" of sensors. The Court, however, found that Thales is distinguishable because its patent-in-suit stated why and how the "particular configuration" of sensors contributed to an advancement over the prior art. In contrast, the only configuration to which "benefits and advantages" are attributed in the specification in the '289 patent is the mere use of multiple lenses and sensors.

The Court noted that the '289 patent expressly eschews any special hardware or software in favor of a "generic solution," and other components in the claim are described at a high level and lack detail (the analog-to-digital circuitry is described simply as "digitiz[ing] the output signals"; the image processor is described functionally as "[u]sing a set of digital image processes embedded in a digital signal processing chip, images . . . are processed . . . and subsequently produce high quality and film-like true color digital images.").

Thus, it would appear that the Court found the claim directed to an abstract idea due to lack of a detailed description having a technical effect. This is generally a European requirement or standard, and is not a requirement in the U.S. The claim clearly recites structure or a configuration of tangible components, and it would seem that the claim should have been found to have satisfied step 1.

Since the Court found the patent to be directed to a patent-ineligible concept under step 1, the Court turned to the second step in Alice to look for an "'inventive concept'—i.e., an element or combination of elements that is sufficient to ensure that the patent in practice amounts to significantly more than a patent upon the ineligible concept itself."

The Court found that there were no allegations that the asserted combination and arrangement of "well-understood, routine and conventional" digital camera components goes beyond the abstract idea of using multiple images to enhance one image. The Court stated that once the abstract idea is removed from the claim, all that is left here is the "conventional technology" of a digital camera, such as image sensors, lenses, circuitry, memory, and a processor being used in conventional ways.

Thus, the Court found that because the '289 patent is directed to an abstract idea and does not add an inventive concept, the patent was directed to ineligible patent subject matter and the complaints were dismissed. Since the motion was decided at this early stage, the Court dismissed the complaints with leave to file amended complaints with more detail.

Yu v. Apple Inc. (N.D. Cal. 2019)
Order Re Motion to Dismiss by District Judge Donato

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