Patent Docs

Supreme Court Preview — Oil States Energy Services, LLC v. Greene’s Energy Group, LLC

November 15, 2017

By Andrew Williams —

On November 27, 2017, the Supreme Court will hear arguments in two cases that were ultimately appealed from IPR Final Written Decisions issued by the PTAB. The first of these, Oil States Energy Services, LLC v. Greene's Energy Group, LLC, will analyze whether IPRs (and presumably other post-issuance proceedings) are constitutional. Specifically, the sole question to be considered by the Court is:

1. Whether inter partes review––an adversarial process used by the Patent and Trademark Office (PTO) to analyze the validity of existing patents––violates the Constitution by extinguishing private property rights through a non-Article III forum without a jury.

This case was appealed from a Federal Circuit Rule 36 affirmance, so there is no appellate decision for the Supreme Court to reference. However, as we reported at the time, the Federal Circuit did previously consider this constitutional issue in MCM Portfolio LLC v. Hewlett-Packard Co. In that case, a three-judge panel concluded that because patents are public rights and "the grant of a patent is primarily a public concern," Congress was able to create administrative procedures for assessing their validity. The outcome was similar to that in the Patlex Corp. v. Mossinghoff case, in which the Court had determined that patents were primarily a public concern, and correspondingly ex parte reexaminations did not violate Article III of the constitution. Nevertheless, not everyone agrees that patents are public rights, and this case will likely turn on whether the Supreme Court instead determines that issued patents are private rights that can only be reviewed in Article III courts. And what will be the outcome? On the one hand, it is not often that the Supreme Court affirms the Federal Circuit, which would suggest the Court will find the proceedings unconstitutional. But it is also difficult imagining this Court taking a decidedly pro-patent position by dismantling the very post-issuance procedures that are responsible for invalidating large numbers of allegedly "bad" patents. Perhaps the oral argument will provide some clarity.

The MCM Portfolio case may have been the last time the Federal Circuit spoke on the constitutionality issue, but various judges expressed their opinions in concurrences and dissents to a denial of a petition for initial hearing en banc. In Cascades Projection LLC v. Epson America, Inc., the Appellant had sought initial en banc review on the constitutionality issue because it believed that the MCM Portfolio case would be controlling on any other panel. Judge Newman concurred because even though she believed that the issue should ultimately be decided by the en banc Court, it would benefit from full consideration by another panel. Judge Dyk, author of the MCM Portfolio opinion, joined by the other two members of the panel (Chief Judge Prost and Judge Hughes), wrote in support of the denial because he believed the prior case was correctly decided (naturally), and wrote to address issues raised by the dissents. Judge O'Malley dissented without expressing any definitive opinion on the merits. Instead, she thought it was far from certain that patent rights are public rights, and therefore this issue deserved the attention of the full court. Finally, Judge Reyna provided a well-reasoned dissent advocating strongly for unconstitutionality. First, he believed that the Supreme Court precedent was clear that only Article III courts had the authority to set aside or annul a patent right. Second, he found the MCM Portfolio and Patlex Corp. decisions to be inconsistent and irreconcilable. Finally, he believed that separation of powers needs to be addressed, adding that the Court "should consider the constraints Article III imposes on the adjudication of patent rights by administrative authority." Of course, all of these opinions will be moot once the Supreme Court decides the present case.

Ultimately, this case may come down to how the Court understands the 1898 case of McCormick Harvesting Machine v. Aultman. In that case, the patentee had sought the add claims via reissuance. However, the Examiner found that at least some of the issued claims were invalid and sought to revoke the patent right. The Supreme Court at the time determined that the Patent Office did not have the authority to do so:

It has been settled by repeated decisions of this court that when a patent has received the signature of the secretary of the interior, countersigned by the commissioner of patents, and has had affixed to it the seal of the patent office, it has passed beyond the control and jurisdiction of that office, and is not subject to be revoked or canceled by the president, or any other officer of the government. It has become the property of the patentee, and as such is entitled to the same legal protection as other property.

The only authority competent to set a patent aside, or to annul it, or to correct it for any reason whatever, is vested in the courts of the United States, and not in the department which issued the patent.

Moreover, the Court stated that "to attempt to cancel a patent upon an application for reissue when the first patent is considered invalid by the examiner would be to deprive the applicant of his property without due process of law, and would be in fact an invasion of the judicial branch of the government by the executive." The Petitioner in the present case, as well as others that believe IPRs are unconstitutional, has taken the position that the statements in McCormick suggest that Congress could not establish any statutory process capable of cancelling or revoking patents once issued by the Office. On the other hand, Respondent Greene's Energy and the Federal Respondent, as well many others arguing for the persistence of IPRs, point out that Congress had not provided the Patent Office with the ability to revoke patents. As a result, the holding in that case turned on a lack of statutory authority, not constitutional authority. In addition, due process can be satisfied (according to this position) by the administrative proceedings, especially because there is the opportunity for appellate review by an Article III court. Interestingly, the McCormick case does not mention or invoke the constitution per se. Nevertheless, it does invoke due process concerns, and many of the cases it cited dealt with the constitutionality of property rights. Cynically, it would seem that the Supreme Court could defensibly adopt either position. Indeed, there are commentators that have noted that this case might be more about the Court's desire to make a pronouncement about the administrative state rather than its desire to control abuses by the Patent Office.

There was significant amicus support for both parties, as well as briefs filed in support of neither party. In the days leading to the argument, we will highlight some of the arguments made. Below is a listing of the filed briefs in the case, as well as links to copies of the briefs (copies of most briefs made available by the American Bar Association)

Merits Briefs

Brief of Petitioner Oil States Energy Services, LLC

Brief of Respondent Greene's Energy Group, LLC

Brief of Federal Respondent

Amicus briefs in support of Petitioner

Brief of 27 Law Professors

Brief of AbbVie, Inc. et al.

Brief of Alliacense Limited LLC

Brief of Biotechnology Innovation Organization (BIO) et al.

Brief of Cato Institute and American Conservative Union Foundation

Brief of Eagle Forum Education & Legal Defense Fund

Brief of Evolutionary Intelligence LLC

Brief of Gary Lauder et al.

Brief of IEEE – USA

Brief of InterDigital, Inc. et al.

Brief of J. Kenneth Blackwell et al.

Brief of LiquidPower Specialty Products Inc.

Brief of Pacific Legal Foundation et al.

Brief of the Pharmaceutical Research and Manufacturers of America

Brief of Professor Dmitry Karshtedt

Brief of Professor James W. Ely, Jr. et al.

Brief of Security People, Inc.

Brief of Thirty-Nine Affected Patent Owners

Brief of Unisone Strategic IP, Inc.

Brief of University of New Mexico

Brief of US Inventor, Inc. et al.

Amicus briefs in support of Respondent

Brief of 72 Professors of Intellectual Property Law

Brief of AARP and AARP Foundation

Brief of Act I The App Association

Brief of Alliance of Automobile Manufacturers

Brief of America's Health Insurance Plans

Brief of Apple Inc.

Brief of Arris Group, Inc. et al.

Brief of Askeladden LLC

Brief of BSA I The Software Alliance

Brief of Dell Inc. et al.

Brief of General Electric Company

Brief of Initiative for Medicines, Access & Knowledge (I-MAK)

Brief of Intel et al.

Brief of Internet Association et al.

Brief of Knowledge Ecology International

Brief of Mylan Pharmaceuticals Inc.

Brief of Professors of Administrative Law et al.

Brief of Public Knowledge et al.

Brief of Professor Lee A. Hollaar

Brief of Retail Litigation Center, Inc. et al.

Brief of SAP America et al.

Brief of Taiwan Semiconductor Manufacturing Co., Ltd.

Brief of U.S. Golf Manufacturers Council

Brief of Unified Patents Inc.

Brief of Volkswagen Group of America

Amicus briefs in support of neither party

Brief of 3M Company et al.

Brief of American Intellectual Property Law Association

Brief of Association for Accessible Medicines

Brief of the Association of Amicus Counsel

Brief of Boston Patent Law Association (BPLA)

Brief of The Civil Jury Project at New York University School of Law

Brief of H. Tomás Gómez-Arostegui and Sean Bottomley

Brief of Houston Intellectual Property Law Association

Brief of Intellectual Property Law Association of Chicago

Brief of Intellectual Property Owners Association

Brief of The Patent Trial and Appeal Board Bar Association

Brief of Shire Pharmaceuticals, LLC
Intellectual Ventures I LLC v. Erie Indemnity Co. (Fed. Cir. 2017)

November 14, 2017

By Michael Borella —

Intellectual Ventures I (IV) brought an action against Erie Indemnity Company in the Western District of Pennsylvania, alleging infringement of U.S. Patent No. 7,757,298. Erie filed a motion to dismiss under Rule 12(b)(6), contending that the claims of the '298 patent did not meet the eligibility requirements of 35 U.S.C. § 101. The District Court granted the motion and IV appealed.

The Supreme Court's Alice Corp. v. CLS Bank Int'l case 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 is directed to 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 generic computer implementation of an otherwise abstract process does not qualify as "significantly more." On the other hand, a claimed improvement to a computer or technological process is typically patent-eligible.

Claim 1 of the '298 patent recites:

A computer-implemented method for identifying and characterizing stored electronic files, said method comprising:
    under control of one or more configured computer systems:
        selecting a file from a plurality of files stored in a computer storage medium, wherein selecting the file is performed according to at least one of:
            selecting the file based on the size of the file by determining whether an aggregate size of plural identically-sized files exceeds a predetermined threshold;
            selecting the file based on whether content of the file matches a file type indicated by a name of the file; or
            selecting the file based on whether the file comprises data beyond an end of data marker for the file;
        generating an identification value associated with the selected file, wherein the identification value is representative of at least a portion of the content of the selected file;
        comparing the generated identification value to one or more identification values associated with one or more of a plurality of unauthorized files; and
        characterizing the file as an unauthorized file if the identification value matches one of the plurality of identification values associated with the unauthorized files.

According to the patent, the claimed invention "improve[s] upon the prior art by providing a method and apparatus to detect undesirable files stored on computer storage devices according to pre-set criteria." These detected files can be reviewed in order to reduce legal risk to a corporation. For instance, such an entity may be unknowingly or inadvertently storing files that contain copyrighted media or pornography. The patent purports to detect "various characteristics of files . . . that give away illegal, illicit, or offensive content . . . and in so doing, saves Web hosting services from criminal, copyright, or some other liability."

Notably, claim 1 includes three distinct file selection criteria claimed in the disjunctive: the size of the file matches the size of other files and their aggregate size exceeds a threshold (an indication that a potentially copyrighted media file has been broken into smaller chunks in order to hide its presence), the content of the file not matching the filename extension of the file (e.g., a *.jpg file should actually contain a JPEG image), and whether the file contains data beyond its end of file marker (an indication that this extra data may be illicit).

The District Court applied part one the Alice test and found that the '298 patent "merely claims a computerized solution to a longstanding problem that exists outside of computers: identifying and categorizing illicit files, the possession of which might subject an individual or organization to liability." The District Court further found the claimed invention analogous to "a librarian tasked with marking and removing books containing pornographic material from a library." IV asserted that the claims were not abstract because they "improve upon how computer systems detect unauthorized files by teaching a specific way of identifying unauthorized files using specific selection criteria that humans did not use." Indeed, the District Court's analogy is tortured at best, as each of the three selection criteria are specific to problems with computer files, and there are no clear or logical analogies to how a librarian would analyze books, CDs, or DVDs.

The Federal Circuit reviewed the claims and found them "directed to the identification of unwanted files in a particular field (i.e., a computer network) and otherwise concern data collection related to such identification." Based on previous Federal Circuit cases, such as Content Extraction & Transmission LLC v. Wells Fargo Bank, Nat'l Ass'n and FairWarning IP, LLC v. Iatric Systems, Inc., the Court ruled the claims abstract. To back up this decision, the Court pointed to how the specification admits that "selection of errant files generally could be performed by humans" with respect to the first two selection criteria. Regarding the third criterion, the Court noted that it had "found the idea of performing a search to ferret out sources with unwanted material based on characteristics of the source to be directed to an abstract idea." Thus, the Court ruled that the third criterion was also abstract.

In an interesting exchange, IV argued that the claimed invention was similar to that of McRO, Inc. v. Bandai Namco Games America Inc., where a software invention using rules to map audio phonemes to facial characteristics was found to be not abstract under part one of Alice. The Court admitted that "[i]n McRO, we held that, although the processes were previously performed by humans, the traditional process and newly claimed method produced results in fundamentally different ways." But then it went on to state, in a conclusory fashion, that "the claims of the '298 patent merely implement an old practice in a new environment." Perhaps this decision was based on IV not arguing that its claimed method was different from the ones used by humans. The Court also found that, unlike those of Enfish v. Microsoft, the claims of the '298 patent "are not directed to an improvement in the way computers operate," and instead merely use a computer to perform a task faster and more accurately.

IV further argued that the claims were similar to a patent-eligible example claim in the USPTO's Subject Matter Eligibility Guidelines. But the Court rapidly dismissed this point, stating that it was not bound by the Guidelines.

Turning to part two of Alice, the Court set out to decide whether the claim elements, "when viewed individually and as an ordered combination — contain an inventive concept sufficient to transform the claimed abstract idea into a patent-eligible application." The District Court answered this inquiry in the negative, holding that the claims recite "generic functions, even if performed by a computer, that are not inventive because selecting files based on identifiers and matching different files/identifiers is just what computers do." Furthermore, the District Court opined that even though the claims were allowed under the pre-Alice machine or transformation test, this test is "not sufficient to render a claim patent-eligible, as not all transformations or machine implementations infuse an otherwise ineligible claim with an inventive concept."

IV asserted that the claims "recite novel file identification software that analyzes and identifies files in unconventional ways — applying three specific selection criteria and then performing a digital-signature-based lookup process." The Federal Circuit, however, took a different view, finding that the generic computer components of the claims did not amount to significantly more than the abstract idea therein. It is unclear from the opinion whether the Court considered the claims as an ordered combination under part two.

As a consequence, the claims failed both parts of the Alice test and were found ineligible.

Over the last year and a half, the Federal Circuit has effectively compressed the two parts of the Alice test into one. According to Enfish and McRO, one can establish the non-abstractness of a claim, or that the claim contains an inventive concept, by showing that it improves the operation of a computer or a technological process. Here, IV lost this case on the analogies made during the part one analysis. Once the Court settled on the claimed invention being analogous to previously-performed human activity, it essentially ignored any assertion that the claimed invention provides a technological improvement. (Or if the Court did consider such improvements, it did not explain its reasoning in this opinion.)

And the analogies made in this case are . . . not good. Especially with respect to determining "whether the file comprises data beyond an end of data marker for the file," it appears that Erie painted with an overly broad brush, and the Federal Circuit bought into it. When viewed as a whole, the claim is clearly directed to and limited to solving a problem that specifically arises in computing. Maybe the claim is obvious, but the process it describes is not any more abstract than the eligible claim at issue in DDR Holdings v. Hotels.com.

But even if the Court did carefully consider the analogies and did come up with reasoning for why the claim is abstract, an explicit rendition of that reasoning is missing from the opinion. As a result, this is likely to become yet another case, like last year's Electric Power Group v. Alstom, where the USPTO, the district courts, and even the Federal Circuit itself, read the holding so broadly that virtually any method claim can be made to look abstract.

Intellectual Ventures I LLC v. Erie Indemnity Co. (Fed. Cir. 2017)
Nonprecedential disposition
Panel: Chief Judge Prost and Circuit Judges Reyna and Wallach
Opinion by Circuit Judge Wallach
PTAB Life Sciences Report

November 12, 2017

By John Cravero —

About the PTAB Life Sciences Report: Each month we will report on developments at the PTAB involving life sciences patents.

Sawai USA, Inc. v. Astellas Pharma Inc.

PTAB Petition: IPR2018-00079; filed October 16, 2017.

Patent at Issue: U.S. Patent No. 6,346,532 ("Amide derivatives or salts thereof," issued February 12, 2002) claims amide derivatives represented by a general formula or salts thereof which are useful in the treatment of diabetes mellitus and obesity.

Petitioners Sawai USA Inc. and Sawai Pharmaceutical Co. Ltd are challenging the '532 patent on two grounds as obvious under 35 U.S.C. § 103(a). View the petition here.

Related Matters: According to the petition, the '532 patent is the subject of the following patent infringement lawsuits: Astellas Pharma Inc., et al. v. Sawai USA, Inc., et al., No. 16-cv-954-SLR (D. Del. 2016) as consolidated with Astellas Pharma Inc., et al. v. Actavis Elizabeth LLC, et al., No. 16-cv-905- SLR (D. Del. 2016).

ThermiGen, LLC v. Viveve, Inc.

PTAB Petition: IPR2018-00088; filed October 20, 2017.

Patent at Issue: U.S. Patent No. 8,961,511 ("Vaginal remodeling device and methods," issued February 24, 2015) claims a method for remodeling a therapeutic zone within a target tissue, the target tissue comprising tissue underlying an epithelium of female genital tissue comprising at least one of vulva, introitus and vagina tissue, the method comprising: heating the target tissue, and remodeling the therapeutic zone of target tissue, wherein the heating includes heating a portion of the vagina extending from the introitus inwardly to a location from 1 cm to 3.5 cm in from the introitus.

Petitioners ThermiGen, LLC and ThermiAesthetics, LLC are challenging the '511 patent on two grounds as being anticipated under 35 U.S.C. § 102(b) (ground 1) or as obvious under 35 U.S.C. § 103(a) (ground 2). View the petition here.

Related Matters: According to the petition, the '511 patent is presently the subject of patent infringement lawsuit: Viveve Inc. v. ThermiGen, LLC, ThermiAesthetics, LLC, and Red Alinsod, M.D., Case No. 16-cv-1189 (E.D. Tex.). Petitioner concurrently filed a second petition for inter partes review of claims 43-58 of the '511 patent (IPR2018-00089; filed 10/20/2017; pending).

ThermiGen, LLC v. Viveve, Inc.

PTAB Petition: IPR2018-00089; filed October 20, 2017.

Patent at Issue: U.S. Patent No. 8,961,511 ("Vaginal remodeling device and methods," issued February 24, 2015) claims a method for remodeling a therapeutic zone within a target tissue, the target tissue comprising tissue underlying an epithelium of female genital tissue comprising at least one of vulva, introitus and vagina tissue, the method comprising: heating the target tissue, and remodeling the therapeutic zone of target tissue, wherein the heating includes heating a portion of the vagina extending from the introitus inwardly to a location from 1 cm to 3.5 cm in from the introitus.

Petitioners ThermiGen, LLC and ThermiAesthetics, LLC are challenging the '511 patent on two grounds as obvious under 35 U.S.C. § 103(a). View the petition here.

Related Matters: According to the petition, the '511 patent is presently the subject of the following patent infringement lawsuit: Viveve Inc. v. ThermiGen, LLC, ThermiAesthetics, LLC, and Red Alinsod, M.D., Case No. 16-cv-1189 (E.D. Tex.). Petitioner concurrently filed a second petition for inter partes review of claims 1-42 of the '511 patent (IPR2018-00088; filed 10/20/2017; pending).

Initiative for Medicines, Access & Knowledge, Inc. v. Gilead Pharmasset, Inc.

PTAB Petition: IPR2018-00103; filed October 25, 2017.

Patent at Issue: U.S. Patent No. 7,429,572 ("Modified fluorinated nucleoside analogues," issued September 30, 2008) claims a ((2'R)-2'-deoxy-2'-fluoro-2'-C-methyl nucleoside (β-D or β-L) or its pharmaceutically acceptable salt of the structure.

Petitioner Initiative for Medicines, Access & Knowledge, Inc. (I-MAK) is challenging the '572 patent on three grounds as being being anticipated under 35 U.S.C. § 102(b) (grounds 1 and 2) or as obvious under 35 U.S.C. § 103(a) (ground 3). View the petition here.

Related Matters: According to the petition, the '572 patent is not involved in any ongoing matters.

Initiative for Medicines, Access & Knowledge, Inc. v. Gilead Pharmasset, Inc.

PTAB Petition: IPR2018-00119; filed October 25, 2017.

Patent at Issue: U.S. Patent No. 7,964,580 ("Nucleoside phosphoramidate prodrugs," issued June 21, 2011) claims (S)-2-{[(2R,3R,4R,5R)-5-(2,4-Dioxo-3,4-dihydro-2H-pyrimidin-1-yl)-4-fluoro-3-hydroxy-4-methyl-tetrahydro-furan-2-ylmethoxy]-phenoxy-phosphorylam- ino}-propionic acid isopropyl ester or a stereoisomer thereof and method for treating subject infected by a virus by administering an effective amount of the compound or a stereoisomer thereof as claimed in claim 1.

Petitioner Initiative for Medicines, Access & Knowledge, Inc (I-MAK) is challenging the '580 patent on three grounds as being anticipated under 35 U.S.C. § 102(b) (ground 1) or as obvious under 35 U.S.C. § 103(a) (grounds 2 and 3). View the petition here.

Related Matters: According to the petition, the Petitioner concurrently filed another petition for inter partes review of the '580 patent (IPR2018-00120; filed 10/25/2017; pending).

Initiative for Medicines, Access & Knowledge, Inc. v. Gilead Pharmasset, Inc.

PTAB Petition: IPR2018-00120; filed October 25, 2017.

Patent at Issue: U.S. Patent No. 7,964,580 ("Nucleoside phosphoramidate prodrugs," issued June 21, 2011) claims (S)-2-{[(2R,3R,4R,5R)-5-(2,4-Dioxo-3,4-dihydro-2H-pyrimidin-1-yl)-4-fluoro-3-hydroxy-4-methyl-tetrahydro-furan-2-ylmethoxy]-phenoxy-phosphorylam- ino}-propionic acid isopropyl ester or a stereoisomer thereof and method for treating subject infected by a virus by administering an effective amount of the compound or a stereoisomer thereof as claimed in claim 1.

Petitioner Initiative for Medicines, Access & Knowledge, Inc (I-MAK) is challenging the '580 patent on two grounds as being obvious under 35 U.S.C. § 103(a). View the petition here.

Related Matters: According to the petition, the Petitioner concurrently filed another petition for inter partes review of the '580 patent (IPR2018-00119; filed 10/25/2017; pending).

Edwards Lifesciences Corp. v. Boston Scientific Scimed, Inc.

PTAB Petition: IPR2017-01295; filed April 19, 2017.

Institution of Inter Partes Review; entered October 25, 2017.

Patent at Issue: U.S. Patent No. 8,709,062 ("Stent delivery system having stent securement apparatus," issued April 29, 2014) claims a medical device and a system for delivering a medical device.

Petitioner Edwards Lifesciences Corp. is challenging the '062 patent on three grounds as obvious under 35 U.S.C. § 103(a). View the petition here. Administrative Patent Judges James A. Tartal, Robert L. Kinder, and Amanda F. Wieker (author) issued a decision instituting inter partes review of whether claims 1–7, 9–15, 17–21, and 23–26 are obvious under 35 U.S.C. § 103(a) over Rupp, Sugiyama, Jendersee, and the knowledge of a person of ordinary skill in the art.

Related Matters: According to the petition, the '062 patent is the subject of the following civil litigation: Boston Scientific Corp. & Boston Scientific SciMed Inc. v. Edwards Lifesciences Corp., No. 16-cv-730 (C.D. Cal.).

Initiative for Medicines, Access & Knowledge, Inc. v. Gilead Pharmasset, Inc.

PTAB Petition: IPR2018-00121; filed October 26, 2017.

Patent at Issue: U.S. Patent No. 8,334,270 ("Nucleoside phosphoramidate prodrugs," issued December 18, 2012) claims a compound and method for treating subject infected by a virus by administering an effective amount of the compound or a stereoisomer thereof as claimed in claim 1.

Petitioner Initiative for Medicines, Access & Knowledge, Inc (I-MAK) is challenging the '270 patent on three grounds as being anticipated under 35 U.S.C. § 102(b) (ground 1) or as obvious under 35 U.S.C. § 103(a) (grounds 2 and 3). View the petition decision.

Related Matters: According to the petition, the Petitioner concurrently filed another petition for inter partes review of the '270 patent (IPR2018-00122; filed 10/26/2017; pending).

Initiative for Medicines, Access & Knowledge, Inc. v. Gilead Pharmasset, Inc.

PTAB Petition: IPR2018-00122; filed October 26, 2017.

Patent at Issue: U.S. Patent No. 8,334,270 ("Nucleoside phosphoramidate prodrugs," issued December 18, 2012) claims a compound and method for treating subject infected by a virus by administering an effective amount of the compound or a stereoisomer thereof as claimed in claim 1.

Petitioner Initiative for Medicines, Access & Knowledge, Inc (I-MAK) is challenging the '270 patent on two grounds as being obvious under 35 U.S.C. § 103(a). View the petition here.

Related Matters: According to the petition, the Petitioner concurrently filed another petition for inter partes review of the '270 patent (IPR2018-00121; filed 10/26/2017; pending).
Conference & CLE Calendar

November 12, 2017

November 14, 2017 – Patent Quality Chat – "How is an Examiner’s Work Product Reviewed?" (U.S. Patent and Trademark Office) – 12:00 to 1:00 pm (ET)

November 14, 2017 - European biotech patent law update (D Young & Co) – 4:00 am, 7:00 am, and 12:00 pm (ET)

November 14, 2017 – "CRISPR Confusion: A Legal and Practical Analysis for IP Professionals" (Technology Transfer Tactics) – 11:00 am to 12:00 pm (ET)

November 16, 2017 – "Overcoming §103 Rejections for Biotech and Chemical Patents: Recent Decisions and USPTO Guidance" (Strafford) – 1:00 to 2:30 pm (EST)

November 16, 2017 – "Outsourcing Patent Work: Avoiding Pitfalls (Ethics)" (Intellectual Property Owners Association) – 2:00 to 3:00 pm (ET)

December 4, 2017 – "Aqua Products, Inc. v. Matal, Answers or More Questions?" – Part II (Federal Circuit Bar Association) – 1:00 to 2:00 pm

***Patent Docs is a media partner of this conference or CLE
USPTO Patent Quality Chat Webinar Series

November 11, 2017

The U.S. Patent and Trademark Office will be offering the next webinar in its Patent Quality Chat webinar series from 12:00 to 1:00 pm (ET) on November 14, 2017. The latest webinar, entitled "How is an Examiner’s Work Product Reviewed?" will be hosted by Sandie Spyrou, Supervisor, Office of Patent Quality Assurance, and Christyann Pulliam, Supervisor, Technology Center 2100, who will discuss how quality fits in to a patent examiner's performance appraisal plan and how the Office of Patent Quality Assurance (OPQA) reviews and provides feedback to examiners.

Instructions for viewing the webinar can be found here.

Additional information regarding the Patent Quality Chat webinar series can be found on the USPTO's Patent Quality Chat webpage.
European Biotech Patent Law Webinar

November 11, 2017

D Young & Co will be offering its next European biotech patent law update on November 14, 2017. The webinar will be offered at three times: 4:00 am, 7:00 am, and 12:00 pm (ET). D Young & Co European Patent Attorneys Simon O'Brien and Matthew Caines will provide an essential update and live Q&A on EPO biotechnology case law.

While there is no fee to participate, attendees must register in advance. Those wishing to register can do so here.
Webcast on Overcoming §103 Rejections for Biotech and Chemical Patents

November 11, 2017

Strafford will be offering a webcast entitled "Overcoming §103 Rejections for Biotech and Chemical Patents: Recent Decisions and USPTO Guidance" on November 16, 2017 from 1:00 to 2:30 pm (EST). Thomas L. Irving of Finnegan Henderson Farabow Garrett & Dunner, Amelia Feulner Baur of McNeill Baur, and Amanda K. Murphy of Finnegan Henderson Farabow Garrett & Dunner will provide guidance to patent counsel for overcoming §103 rejections for biotech and chemical patents, and review recent judicial and PTAB case law and offer insights to address §103 rejections. The webinar will review the following issues:

• What evidentiary support should counsel provide to bolster its assertion of validity/patentability?
• What tactics should patent counsel implement to overcome §103 rejections for biotech and chemical patents?
• How can patent counsel guide applicants during patent application drafting to reduce the likelihood of rejection?

The registration fee for the webcast is $297. Those interested in registering for the webinar, can do so here.
IPO Webinar on Outsourcing Patent Work

November 11, 2017

The Intellectual Property Owners Association (IPO) will offer a one-hour webinar entitled "Outsourcing Patent Work: Avoiding Pitfalls (Ethics)" on November 16, 2017 from 2:00 to 3:00 pm (ET). Mukundan Chakrapani of Clairvolex, Michael Gnibus of General Electric, and Michael McCabe of IP Ethics Law will examine the possible hazards that can trip up customers of patent services, and what due diligence and supervision is required to do outsourcing correctly.

The registration fee for the webinar is $135 (government and academic rates are available upon request). Those interested in registering for the webinar can do so here.
Webinar on CRISPR

November 11, 2017

Technology Transfer Tactics will be offering a webinar entitled "CRISPR Confusion: A Legal and Practical Analysis for IP Professionals" on November 14, 2017 from 11:00 am to 12:00 pm (ET). Patents Docs author Kevin E. Noonan of McDonnell Boehnen Hulbert & Berghoff LLP will cover the following topics:

• A brief overview of the technology
• A review of the patent positions of the parties
• A discussion of the arguments raised in the Interference
• An assessment of the PTAB's decision and its effect on the patents and applications
• Analysis of strategies for further appeal
• Impact on patent practice — claim strategy
• Impact on licensing
• Predictions regarding the patent and licensing landscape if the parties do not settle
• Likelihoods and advantages of settlement

The registration fee for the webinar is $197. Those interested in registering for the webinar, can do so here.
Bayer Pharma AG v. Watson Laboratories, Inc. (Fed. Cir. 2017)

November 9, 2017

By Kevin E. Noonan –

The Federal Circuit reversed a finding of non-obviousness on Friday based on clear error by the District Court on factual underpinnings of its obviousness determination, in Bayer Pharma AG v. Watson Laboratories, Inc. Such decisions are rare, in view of the relevant standard of review.

The standard of review after a bench trial on a district court's determination of whether a claim is obvious is clear error for factual questions and de novo review for questions of law (including obviousness itself). Pfizer, Inc. v. Apotex, Inc., 480 F.3d 1348, 1359 (Fed. Cir. 2007). Clear error is a relatively deferential standard; as enunciated by the Supreme Court:

"A finding is 'clearly erroneous' when[,] although there is evidence to support it, the reviewing court on the entire evidence is left with the definite and firm conviction that a mistake has been committed." United States v. U.S. Gypsum Co., 333 U.S. 364, 395 (1948).

The question arose in ANDA litigation over oral disintegration tablet (ODT) formulations of the erectile dysfunction drug vardenafil, wherein the formulation is an uncoated tablet that disintegrates rapidly when ingested orally; it is sold by Bayer as Staxyn^® (an alternative formulation to Bayer's brand name Levitra^® product).

Litigation ensued over Orange Book-listed U.S. Patent No. 8,613,950, with Bayer asserting claims 9 and 11:

8. A drug formulation in the form of an uncoated tablet which disintegrates rapidly in the mouth and releases the drug in the mouth without swallowing the tablet comprising vardenafil hydrochloride trihydrate, and at least two sugar alcohols.

9. The drug formulation according to claim 8, wherein said sugar alcohols are a mixture of sorbitol and mannitol.

11. The drug formulation of claim 8, wherein at least one sugar alcohol is sorbitol.

Watson adduced evidence of nine prior art references relevant to the ODT limitation recited in these claims, and another seven references asserted for the sorbitol and mannitol limitations. Watson argued that the skilled worker would be motivated to make an ODT formulation for vardenafil, choose sorbitol and mannitol as component sugar alcohols, and make the formulation an immediate release formulation (required by the limitation "releases the drug in the mouth without swallowing the tablet"). The District Court rejected Watson's arguments and also opined that the cited art taught away from immediate release ODT formulations and that the objective indicia supported its nonobviousness determination. As a consequence, the District Court held that Watson had not proven by clear and convincing evidence that asserted claims 9 and 11 would have been obvious.

The Federal Circuit reversed in an opinion by Judge Moore, joined by Judges Lourie and O'Malley. The opinion finds clear error in the factual findings of the District Court (although it leaves undisturbed the District Court's finding that the objective indicia support the nonobviousness decision). With regard to ODT vardenafil formulations, the opinion attributes the District Court's finding to the testimony of Bayer's expert, Dr. Wicks being more persuasive than Watson's expert, Dr. Jacobs. This testimony was directed to the absence of ODT formulations for erectile dysfunction drugs reflecting a general inapplicability of this formulation technology to be used with this class of drug. This conclusion was based on the scarcity of ODT formulations for these drugs on the presumptive filing date, and failure of others (such as Pfizer with its Viagra^® product) to market such drugs after announcing their intention to do so. The Federal Circuit found clear error in this conclusion, in the face of the nine references adduced by Watson to support its argument with regard to ODT formulations. In particular the opinion states:

Dr. Jacobs testified that the Chang reference states "drugs for [ED] would be good candidates for ODT formulation." He testified the Boolell and Fryburg references each disclose formulating vardenafil as an ODT. He testified that numerous companies had already begun formulating ODT versions of ED drugs: Pfizer filed the Bell-Huff patent application directed to sildenafil ODT; Eisai filed the Furitsu patent application claiming an ODT formulation of phosphodiesterase inhibitors; and Lavipharm filed the Chen international patent application, identifying ODT versions of sildenafil [citations to the record omitted].

And the nature of the District Court's contrary determination as clear error arose at least in substantial part because "[t]hese six references—Chang, Boolell, Fryburg, BellHuff, Furitsu, and Chen—are absent from the district court's decision."

Moreover, specific statements in the District Court's opinion relating to its determination that the recited claims were non-obvious were "contradicted by the references cited by Dr. Jacobs that the court failed to consider," according to the Court's opinion. The panel also identified positive statements from each of these references supporting the use of ODT formulations with vardenafil. In addition, the opinion noted that "more than one company" applied for patents on ODT vardenafil formulations (a almost "reverse" objective index) and that the cited references were particularly directed to ODT and rapid dissolving ED formulations. "All of these references indicate a person of ordinary skill in the art would have considered ODT formulations applicable to ED drugs," according to the opinion, and that some of them indicated that the skilled worker would have understood the references to apply particularly to vardenafil. And Bayer's expert, Dr. Wicks, did not "cast doubt" on the weight of Watson's evidence in this regard in the Federal Circuit's view. Rather, the opinion states that "[t]his case does not present a situation in which the district court's credibility determination can be understood to discount the prior art references it failed to address based on one expert's characterization of the prior art," citing Senju Pharm. Co. v. Lupin Ltd, 780 F.3d 1337, 1351 (Fed. Cir. 2015).

The panel recognized that "[i]t is understood [that the District Court] discount[ed] the prior art references it failed to address based on [Bayer's] expert's characterization of the prior art," citing FilmTec Corp. v. Hydranautics, 982 F.2d 1546, 1553 (Fed. Cir.1992). But the panel notes "a district court cannot, through a credibility determination, ignore the wealth of evidence, especially as in this case where the expert did not even address it." A specific failure by the District Court was its reliance in the absence of ODT formulations of ED on the market at the relevant time as evidence of nonobviousness, because "[t]he motivation to combine inquiry is not limited to what products are forthcoming or currently available on the market" (if only in this case because of the vagaries of navigating the regulatory pathway at the FDA). The motivation to prepare an ODT formulation of vardenafil was evident to the panel from the cited references, which were enough for the Federal Circuit to find clear error in the District Court's contrary determination.

With regard to the choice of sugar alcohol components of the claimed formulation, the opinion notes that it was known in the art to include a sugar alcohol in ODT formulations (regardless of the active ingredient). The dispute, according to the opinion, was whether the choice of sorbitol and mannitol as component sugar alcohols would have been obvious. As with the ODT limitation, the Federal Circuit characterized the District Court's factual findings on this issue to be based on the competing testimony of Drs. Wick (Bayer) and Jacobs (Watson). While not "question[ing] the district court's credibility determinations," here too the Federal Circuit found clear error in its conclusions. The error was once again the District Court's reliance and focus on commercial availability rather than what was taught in the art, in the panel's opinion. Part of that prior art was an off-the-shelf ODT excipient ("Pharmaburst") present in embodiments comprising mannitol alone or a combination of mannitol and sorbitol; the opinion notes that use of this excipient was taught in the '950 patent specification. The District Court's conclusion that "there was nothing in the prior art that would have given the [person of ordinary skill in the art] a reason to use sorbitol in addition to mannitol in an ODT" was clearly erroneous in light of this evidence, according to the opinion. The remainder of Watson's cited prior art was consistent with this understanding that mannitol or the combination of mannitol and sorbitol in ODT formulations was known in the prior art, and thus the District Court's determination to the contrary was clear error according to the Federal Circuit. Particularly in regard to the relevance of FDA approval on the question of obviousness for a pharmaceutical formulation, the opinion states that "[w]hile FDA approval may be relevant to the obviousness inquiry,[] a lack of FDA approval cannot negate an otherwise apparent motivation to formulate a product."

Finally, with regard to the question of whether it would have been obvious to develop an immediate-release ODT formulation of vardenafil, the District Court had held that the prior art taught away from making an oral immediate-release formulation based on expert testimony that vardenafil was bitter-tasting and that the expected increased bioavailability resulting from such a formulation would be deleterious for older men (an obvious target population for the drug). While leaving undisturbed these factual findings, the panel found clear error in "elevat[ing] these findings to teaching away" as the District Court had done. This error arose because the District Court's decision (in the panel's view) was based on whether the skilled worker would favor one formulation over another (e.g., delayed release), whereas the proper inquiry is whether the art taught that the alternative was "unlikely to be productive," citing Santarus, Inc. v. Par Pharm., Inc., 694 F.3d 1344, 1354 (Fed. Cir. 2012) (quoting Medichem, S.A. v. Rolabo, S.L., 437 F.3d 1157, 1165 (Fed. Cir. 2006). "When there are only two possible formulations and both are known in the art at the time, the fact that there may be reasons a skilled artisan would prefer one over the other does not amount to a teaching away from the lesser preferred but still workable option," and "obviousness 'does not require that the motivation be the best option, only that it be a suitable option from which the prior art did not teach away,'" according to the opinion, citing Par Pharm., Inc. v. TWI Pharm., Inc., 773 F.3d 1186, 1197–98 (Fed. Cir. 2014).

In addition to overturning the District Court's obviousness determination the Federal Circuit awarded costs to Watson.

Bayer Pharma AG v. Watson Laboratories, Inc. (Fed. Cir. 2017)
Panel: Circuit Judges Lourie, Moore, and O'Malley
Opinion by Circuit Judge Moore

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