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  • Bayer CropScience AG and Bayer S.A.S. v. Dow Agrosciences LLC (Fed. Cir. 2017)

    By Donald Zuhn —

    Federal Circuit SealLast week, in Bayer CropScience AG and Bayer S.A.S. v. Dow Agrosciences LLC, the Federal Circuit determined that the District Court for the District of Delaware did not abuse its discretion in determining that, under the totality of the circumstances, the case was an exceptional one, and the Federal Circuit therefore affirmed the District Court's grant of attorney fees to Dow Agrosciences LLC.

    An earlier appeal involving the same parties focused on the scope of Bayer's license to Dow's business partner M.S. Technologies, LLC ("MS Tech"), and more specifically, whether the license granted MS Tech a broad license to commercialize and sublicense the licensed technology (i.e., soybeans genetically engineered to tolerate herbicide).  Bayer's position was that it had only licensed MS Tech rights to non-commercial exploitation of the technology, and Dow countered that the Bayer-MS Tech agreement conveyed broad rights to MS Tech, including the right to commercialize the licensed technology.  The District Court agreed with Dow's interpretation of the Bayer-MS Tech agreement and granted summary judgment in Dow's favor.  The Federal Circuit affirmed that decision in Bayer CropScience AG v. Dow AgroSciences LLC, 580 F. App’x 909 (Fed. Cir. 2014) (Bayer I).

    The case was returned to the District Court, where the Court awarded Dow attorney fees pursuant to 35 U.S.C. § 285.  In characterizing that decision, the Federal Circuit explained that "[t]he district judge examined the full duration of the litigation and concluded that, in her view, Bayer's weak positions on the merits and litigation conduct supported a finding that this was an exceptional case," adding that "the district judge emphasized that 'Bayer's own witnesses as well as key documents contradicted Bayer's contorted reading of the contract'" and that "'Bayer's conduct in litigating this case in the face of evidence that contradicted its contorted reading of the Agreement was objectively unreasonable.'"

    Bayer had relied on an exception clause in the licensing agreement that granted "a worldwide, fully paid-up, exclusive license [to MS Tech] with the exception of the rights to increase, market, distribute for sale, sell and offer for sale, granted to STINE by separate agreement."  The separate agreement to Stine referenced in the exception clause concerned a non-exclusive license Bayer gave to Stine Seed Farm, Inc. Bayer contended that the exception clause carved all commercialization rights completely out of the MS Tech license, while Dow argued that the provision indicated that the MS Tech license was not exclusive with respect to the separate license rights Stine had been granted.  The District Court, however, determined that "[t]he positions Bayer took to support their contract interpretation arguments were directly contradicted by the record evidence Bayer had obtained through early discovery and Bayer should have made every effort to discover before filing suit" adding that "[h]ad Bayer done any due diligence, it would have learned that no witness supported Bayer's construction of the Agreement and this case [] should never have been filed."

    In affirming the District Court's grant of attorney fees, the Federal Circuit noted that in Octane Fitness, LLC v. ICON Health & Fitness, Inc., 134 S. Ct. 1749, 1756 (2014), the Supreme Court had clarified what constitutes an exceptional case, namely:

    [A]n "exceptional" case is simply one that stands out from others with respect to the substantive strength of a party's litigating position (considering both the governing law and the facts of the case) or the unreasonable manner in which the case was litigated.  District courts may determine whether a case is "exceptional" in the case-by-case exercise of their discretion, considering the totality of the circumstances.

    The Federal Circuit determined that the District Court had not abused its discretion in finding the case to be exceptional and had applied the correct legal test under § 285, examining the totality of the circumstances to determine whether the case stood out from others.  The panel opinion notes, for example, that "[o]ne Bayer executive at the time of the deal testified that Bayer did not retain commercial rights because 'it was relatively black and white certainly in my mind that we were divesting these assets,'" and that same executive further testified that "'[i]t seems incongruous that we would sell an asset to somebody, receive remuneration for the sale, and then somehow prevent the acquirer from making use of the asset he just acquired.'"

    The Federal Circuit also determined that the District Court did not abuse its discretion in concluding that Bayer failed to perform a diligent pre-suit investigation of its claims against Dow, indicating that "Bayer's own witnesses testified against its contract interpretation," and stating that "[w]e cannot say that the district court erred in reasoning that had Bayer conducted a more searching pre-suit investigation—at least of its own easily-obtainable evidence—it would have not filed suit."  The Federal Circuit therefore held that the District Court had not abused its discretion in determining that this was an exceptional case, and affirmed the District Court's grant of attorney fees.

    Bayer CropScience AG and Bayer S.A.S. v. Dow Agrosciences LLC (Fed. Cir. 2017)
    Panel: Circuit Judges Newman, Chen, and Stoll
    Opinion by Circuit Judge Stoll

  • SCA Hygiene Products Aktiebolag v. First Quality Baby Products, LLC (2017)

    By Kevin E. Noonan —

    Supreme Court Building #2The U.S. Supreme Court overturned another Federal Circuit decision today (this one having been decided en banc by the appellate court), in SCA Hygiene Products Aktiebolag v. First Quality Baby Products, LLC.  The outcome was not a surprise, at least because 1) the decision was consistent with the Court's decision in Petrella v. Metro-Goldwyn-Mayer, Inc., decided three years ago; 2) the Justices' questioning at oral argument presaged how they were thinking; and 3) it was, after all, a Federal Circuit decision.  The decision was not unanimous, however; Justice Breyer dissented, in an opinion consistent with his general suspicion regarding bad behavior by patentees and his penchant for having the Court make policy judgments that his brethren (at least in this instance) believe are within the province of Congress.

    The case arose over infringement of SCA's patent (U.S. Patent No. 6,375,646) on adult incontinence products, which First Quality contended was invalid over its own prior art patent (U.S. Patent No. 5,415,649).  Following ex parte reexamination of SCA's patent and a finding by the USPTO that the claims were patentable over First Quality's patent, SCA brought suit (about 7 years after SCA first notified First Quality regarding its allegations of infringement).  The District Court ruled by summary judgment that SCA's suit was barred by laches (an equitable doctrine that prevents a patentee from "sleeping on her rights" by undue delay in filing a patent infringement suit).  A sharply divided Federal Circuit (6-5) affirmed en banc, based on its reasoning that although Congress enacted a six-year time limitation on money damages in the statute (35 U.S.C. § 286), the provisions of 35 U.S.C. § 282, which states that "[n]oninfringement, absence of liability for infringement or unenforceability" are available as defenses, and "unenforceability" includes within its scope the equitable doctrine of laches.  One source of the division on the appellate court was the Supreme Court's intervening Petrella decision, barring laches as a defense in copyright infringement actions based on a three-year statute of limitations enacted by Congress; the majority relied on its own earlier decision in A. C. Aukerman Co. v. R. L. Chaides Constr. Co. to the contrary.

    The Supreme Court's decision (authored by Justice Alito and joined by all but Justice Breyer) vacating the Federal Circuit's affirmance was based in part on its Petrella decision, but also on the Court's analysis of the practice at law and in equity stemming from the time when these two actions were maintained separately and when they were merged in 1938.  The Court "spoke broadly" in Petrella according to the majority, so that laches was barred as a defense whenever Congress enacted an express statute of limitations (in that case, in 17 U.S.C. § 507(b)).  The reasons for the Court's Petrella decision included "separation-of-powers principles" (wherein the judiciary does not have the power to override Congressional decisions in its statutes; see, e.g., National Federation of Independent Business v. Sebelius), according to the opinion.  Specifically Justice Alito wrote:

    When Congress enacts a statute of limi­tations, it speaks directly to the issue of timeliness and provides a rule for determining whether a claim is timely enough to permit relief.  []  The enactment of a statute of limitations necessarily reflects a congressional decision that the timeliness of covered claims is better judged on the basis of a generally hard and fast rule rather than the sort of case-specific judicial determination that occurs when a laches defense is asserted.  Therefore, applying laches within a limitations period specified by Congress would give judges a "legislation­ overriding" role that is beyond the Judiciary's power.

    In addition, the Court in Petrella (and here) considered the "traditional role of laches in equity" and its interaction with legal principles like statutes of limitations.  And here, as in Petrella, the Court determined that there was no basis for the Federal Circuit's decision that laches could contradict the statute of limitations provisions of § 286.

    With regard to the traditional role of laches in equity suits, the Court opined that this doctrine was developed for situations where Congress had not specified a fixed time for bringing suit, and thus was a "gap-filling" doctrine to cure in equity what the law did not expressly provide.  When, as here, Congress has provided an express statute of limitations "there is no gap to fill" and thus no purpose for laches according to Justice Alito’s opinion.

    The Court first rejected First Quality's contention that § 286 was not a "true" statute of limitations because it "ran backwards" from the time suit is filed to limit the temporal extent of damage rather than "run[ning] forward from the time a cause of action accrues."  Then the opinion turned to the Federal Circuit's rationale regarding the relationship between § 286 and § 282, and specifically whether § 282 satisfies the qualifying phrase from § 286 that the section governs "[e]xcept as otherwise provided by law."  The Court deigned not to parse out whether § 282 provided some measure of laches as a defense; rather, Justice Alito refused to countenance interpretation of the statute to include laches as a defense that would defeat the express statute of limitations found in § 286.  This determination was supported by a survey of cases (from both before and after enactment of the Patent Act in 1952).  In rejecting the Federal Circuit's conclusion, the opinion states that "[t]he most prominent feature of the relevant legal landscape at the time of enactment of the Patent Act was the well-established general rule, often repeated by this Court, that laches cannot be invoked to bar a claim for damages incurred within a limitations period specified by Congress," citing Holmberg v. Armbrecht; United States v. Mack; and Wehrman v. Conklin; and Cross v. Allen.  None of these were patent cases, but the opinion rejects the significance of this distinction on the grounds that "[p]atent law is governed by the same common-law principles, methods of statutory interpretation, and procedural rules as other areas of civil litigation" according to the dissent in the Federal Circuit.  Justice Alito states that "nothing less than a broad and unambiguous consensus of lower court decisions could support the inference that §282(b)(1) codi­fies a very different patent-law-specific rule," and, as is the Court's wont he finds no evidence of such a patent-law-specific rule in the cases cited by either the Federal Circuit or First Quality.  These cases included those:  "decided by equity courts before 1938" ("unpersuasive for several, often overlapping reasons"; "too few to establish a settled, national consensus"); "decided by law courts before 1938" ("even if all of these cases squarely held that laches could be applied to a damages claim at law within the limitations period, they would still constitute only a handful of decisions out of the corpus of pre­1952 patent cases, and that would not be enough to over­come the presumption that Congress legislates against the background of general common-law principles"); and "decided after the merger of equity and law in 1938" ("First Quality's evidence is scant").

    Finally, the majority rejected First Quality's invitation to make its decision based on policy considerations ("we cannot overrule Congress's judgment based on our own policy views") and suggests that other doctrines (such as equitable estoppel) may provide relief.

    Justice Breyer dissented, based on many of the policy arguments made by Respondent and amici.  Unlike the majority, the Justice sees a "gap to fill," specifically when a patentee can delay to permit an infringer to develop a product in a way that maximizes infringement damages (which would constitute "harmful and unfair legal consequences").  For example, under the provisions of § 286 "a patentee, after learning of a possible in­fringement in year 1, might wait until year 10 or year 15 or year 20 to bring a lawsuit.  And if he wins, he can col­lect damages for the preceding six years of infringement."  This "gap" could permit an infringer (including an unknowing infringer according to the dissent) to "in­vest[] heavily in the development of the infringing product (of which the patentee's invention could be only a small component), while evidence that the infringer might use to, say, show the patent is invalid disappears with time."  This is particularly pernicious in circumstances where the infringer is "locked in," i.e., when "business-related circumstances make it difficult or impos­sible for the infringer to abandon its use of the patented invention."

    Besides these policy concerns, Justice Breyer believes that the 1952 Patent Act was intended merely to codify existing law, and part of that existing law includes laches.  This law included a number of cases that the Justice sets forth expressly in the dissenting opinion, including:

    Lukens Steel Co. v. American Locomotive Co. [] (CA2 1952); Chicago Pneumatic Tool Co. v. Hughes Tool Co. [] (CA10 1951); Brennan v. Hawley Prods. Co. [] (CA7 1950); Shaffer v. Rector Well Equip. Co. [] (CA5 1946); Rome Grader & Mach. Corp. v. J. D. Adams Mfg. Co. [] (CA7 1943); France Mfg. Co. v. Jefferson Elec. Co. [] (CA6 1939); Universal Coin Lock Co. v. American Sanitary Lock Co. [] (CA7 1939); Union Shipbuild­ing Co. v. Boston Iron & Metal Co. [] (CA4 1938); Gillons v. Shell Oil Co. of Cal. [] (CA9 1936); Holman v. Oil Well Supply Co. [] (CA2 1936) (per curiam); Dock & Term. Eng. Co. v. Pennsylvania R. Co. [] (CA3 1936); Banker v. Ford Motor Co. [] (CA3 1934); Westco-Chippewa Pump Co. v. Delaware Elec. & Supply Co. [] (CA3 1933); Window Glass Mach. Co. v. Pittsburgh Plate Glass Co. [] (CA3 1933); Dwight & Lloyd Sintering Co. v. Greenawalt [] (CA2 1928); George J. Meyer Mfg. Co. v. Miller Mfg. Co. [] (CA7 1928); Wolf Mineral Process Corp. v. Minerals Separation N. Am. Corp. [] (CA4 1927); Cummings v. Wilson & Willard Mfg. Co. [] (CA9 1925); Ford v. Huff [] (CA5 1924); Wolf, Sayer & Heller, Inc. v. United States Slicing Mach. Co. [] (CA7 1919); A. R. Mosler & Co. v. Lurie [] (CA2 1913); Safety Car Heating & Lighting Co. v. Consolidated Car Heating Co. [] (CA2 1909) (per curiam); Richardson v. D. M. Osborne & Co. [] (CA2 1899); and Woodmanse & Hewitt Mfg. Co. v. Williams [] (CA6 1895).

    To the majority's rejoinder that these cases "prove[] nothing" because they are decisions from courts of equity, the Justice says "Good reply But no cigar" because:  in 1897, Congress enacted a limited statute of limitations in patent cases that could be used against claims brought in equity courts; in 1870, Congress gave equity courts the power to award damages in patent cases; Congress recognized that patent cases were brought (at that time) in courts of equity; and finally that in the (admittedly) few cases pre-merger that considered whether laches could bar suits at law, those courts held that they could.  And those cases relied upon by the majority to the contrary were not patent cases, Justice Breyer notes, and thus "do not prevent Congress from enacting a statute that, recognizing patent litigation's history, combines a statute of limitations with a laches defense," which in the Justice's opinion is what Congress did.

    The dissent illustrates the significance of where the burden is placed on convincing the Court with earlier cases:  here, the dissent contends that the majority was "unable to identify a single case—not one—from any court of ap­peals sitting in law or in equity before the merger, or sitting after the merger but before 1952 holding that laches could not bar a patent claim for damages."  Of course the majority considered the converse, that Respondents and amici did not show sufficient cases that laches could provide such a bar.  And the Justice notes that every Court of Appeals case considering the question since enactment of the 1952 Patent Act had found that laches can bar damages claims, contrary to the majority's decision.

    The dissent also distinguished Petrella, relying on legal as well as practical differences between patent and copyright.  And the dissent ends with an aphorism ironic in view of the pen that has written it:

    [T]he majority remains "determined to stay the course and continue on, travelling even further away," Mathis v. United States, 579 U. S. ___, ___ (2016) (ALITO J., dissenting) (slip op., at 9), from Congress' efforts, in the Patent Act, to promote the "Progress of Science and useful Arts," U. S. Const., Art. I, §8, cl. 8.  Trite but true: Two wrongs don't make a right.

    SCA Hygiene Products Aktiebolag v. First Quality Baby Products, LLC (2017)
    Opinion of the Court by Justice Alito, joined by Chief Justice Roberts and Justices Kennedy, Thomas, Ginsburg, Sotomayor, and Kagan;
    Dissenting opinion by Justice Breyer

  • PTAB Life Sciences Report — Part IV

    By John Cravero and Richard Martin —

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

    Smith & Nephew, Inc. v. ConforMIS, Inc.

    PTAB Petition:  IPR2017-00510; filed December 20, 2016.

    Patent at Issue: U.S. Patent No. 7,981,158 ("Patient selectable joint arthroplasty devices and surgical tools," issued July 19, 2011) claims methods of generating, making, designing, and using a patient-matched surgical tool.

    Petitioner Smith & Nephew, Inc. is challenging the '158 patent on four grounds as obvious under 35 U.S.C. § 103(a).  View the petition here.

    Related Matters:  According to the petition, the '158 patent is the subject of a litigation captioned ConforMIS, Inc. v. Smith & Nephew, Inc., No. 1:16-cv-10420- IT (D. Mass.).  Also, Petitioner is filing a petition concurrently for inter partes review of the '158 patent (IPR2017-00511).


    Smith & Nephew, Inc. v. ConforMIS, Inc.

    PTAB Petition:  IPR2017-00511; filed December 20, 2016.

    Patent at Issue:  U.S. Patent No. 7,981,158 ("Patient selectable joint arthroplasty devices and surgical tools," issued July 19, 2011) claims methods of generating, making, designing, and using a patient-matched surgical tool.

    Petitioner Smith & Nephew, Inc. is challenging the '158 patent on two grounds as obvious under 35 U.S.C. § 103(a).  View the petition here.

    Related Matters:  According to the petition, the '158 patent is the subject of a litigation captioned ConforMIS, Inc. v. Smith & Nephew, Inc., No. 1:16-cv-10420- IT (D. Mass.).  Also, Petitioner is filing a petition concurrently for inter partes review of the '158 patent (IPR2017-00510).


    Lexion Medical LLC. v. SurgiQuest, Inc.

    PTAB Petition:  IPR2017-00518; filed December 21, 2016.

    Patent at Issue:  U.S. Patent No. 9,095,372 ("System and method for improved gas recirculation in surgical trocars with pneumatic sealing," issued August 5, 2015) claims a system for insufflation and recirculation of insufflation fluid in a surgical procedure.

    Petitioner Lexion Medical LLC is challenging the '372 patent on one ground as obvious under 35 U.S.C. § 103(a).  View the petition here.

    Related Matters:  According to the petition, the '372 patent is the subject of litigation captioned ConMed Corporation et al. v. Lexion Medical LLC., No. 6:16-cv-944-DNH/ATB (E.D. NY.).


    Smith & Nephew, Inc. v. ConforMIS, Inc.

    PTAB Petition:  IPR2017-00544; filed December 27, 2016.

    Patent at Issue:  U.S. Patent No. 7,534,263 ("Surgical tools facilitating increased accuracy, speed and simplicity in performing joint arthroplasty," issued May 19, 2009) claims tools and methods of making tools for repairing articular surfaces repair materials and for repairing an articular surface.

    Petitioner Smith & Nephew, Inc. is challenging the '263 patent on five grounds as obvious under 35 U.S.C. § 103(a).  View the petition here.

    Related Matters:  According to the petition, the '263 patent is the subject of a litigation captioned ConforMIS, Inc. v. Smith & Nephew, Inc., No. 1:16-cv-10420- IT (D. Mass.).  Also, Petitioner is filing a petition concurrently for inter partes review of the '263 patent (IPR2017-00545).


    Smith & Nephew, Inc. v. ConforMIS, Inc.

    PTAB Petition:  IPR2017-00545; filed December 27, 2016.

    Patent at Issue:  U.S. Patent No. 7,534,263 ("Surgical tools facilitating increased accuracy, speed and simplicity in performing joint arthroplasty," issued May 19, 2009) claims tools and methods of making tools for repairing articular surfaces repair materials and for repairing an articular surface.

    Petitioner Smith & Nephew, Inc. is challenging the '263 patent on five grounds as obvious under 35 U.S.C. § 103(a).  View the petition here.

    Related Matters:  According to the petition, the '263 patent is the subject of a litigation captioned ConforMIS, Inc. v. Smith & Nephew, Inc., No. 1:16-cv-10420- IT (D. Mass.).  Also, Petitioner is filing a petition concurrently for Inter Partes Review of the '263 patent (IPR2017-00544).


    Kaz USA, Inc. v. Exergen

    PTAB Petition:  IPR2016-01186; filed July 14, 2016.

    PTAB Trial Instituted Document filed December 27, 2016.

    Patent at Issue:  U.S. Patent No. 7,346,386 ("Temporal artery temperature detector," issued March 18, 2007) claims a body temperature detector.

    Petitioner KAZ USA, Inc. is challenging the '386 patent on six grounds as being anticipated under 35 U.S.C. § 102(b) (ground 1) or obvious under 35 U.S.C. § 103(a) (grounds 2 through 6).  View the petition here.  Administrative Patent Judges Phillip J. Kauffman (author), Meredith C. Petravick, and William V. Saindon issued a decision instituting inter partes review of claims 1 and 2 as being anticipated under 35 U.S.C. § 102(b) by Pompei '813; claims 3, 4, 22, and 24 as obvious under 35 U.S.C. § 103(a) over Pompei '813 and Pompei '091; claims 1 and 2 as obvious under 35 U.S.C. § 103(a) over Banke and Houdas; and claims 3, 4, 22, and 24 as obvious under 35 U.S.C. § 103(a) over Banke, Houdas, and Pompei '091.

    Related Matters:  According to the petition, the '386 patent is involved in the litigation captioned Exergen Corp. v. Microlife Corp. et al., No. 1:15-cv-13387 (D. Mass).

  • Bayer CropScience AG v. Dow Agrosciences LLC (Fed. Cir. 2017)

    By Donald Zuhn —

    Federal Circuit SealEarlier this month, in Bayer CropScience AG v. Dow Agrosciences LLC, the Federal Circuit concluded that the District Court for the Eastern District of Virginia correctly confirmed an international arbitration tribunal's award of $455 million, modified the judgment such that post-judgment interest accrues at the federal statutory rate, and affirmed the judgment as modified.

    At the center of the dispute between Bayer CropScience NV and Bayer CropScience AG ("Bayer") and Dow Agrosciences LLC, Mycogen Plant Science, Inc., Agrigenetics, Inc., and Phytogen Seed Co. ("Dow") was a 1992 cross-licensing agreement between Hoechst AG (Bayer's predecessor) and Lubrizol Genetics, Inc. (Dow's predecessor), in which Hoechst granted Lubrizol Genetics licenses to the Leemans patent family (which describes and claims various technologies related to the pat gene, which confers resistance to the herbicide glufosinate) and the Strauch patent family.  Bayer CropScience NV now owns or co-owns the Leemans patent family as a successor of Plant Genetic Systems NV.  Bayer CropScience AG owns the Strauch patent family as a successor of Hoechst AG.  Article 4 of the 1992 agreement restricted the parties' use of the licensed technology, and Article 12 of the 1992 agreement stated that the agreement was to be governed by and construed in accordance with French law and that disputes were to be decided by arbitration in accordance with the Rules of Conciliation and Arbitration of the International Chamber of Commerce.

    Dow AgroSciences LLC produces the Enlist E3, Enlist E3+IR, Enlist Soybean, Enlist Cotton, Widestrike, and Widestrike 3 products, each of which contains the pat gene, through its subsidiaries, Mycogen Plant Science, Inc., Agrigenetics, Inc., and Phytogen Seed Co.  Between 2007 and 2008, Dow entered into a series of agreements with MS Technologies, LLC regarding the pat gene, and this collaboration resulted in the creation of the Enlist E3 products.

    In 2012, Bayer terminated the 1992 agreement with Dow, accusing Dow of materially breaching Article 4 of the agreement.  Bayer then sued Dow for infringement of several patents involved in the 1992 agreement.  Dow moved to dismiss or stay the action based on Article 12 of the agreement, and the District Court stayed the action.  Dow also filed six requests for inter partes reexamination of several patents involved in the 1992 agreement and one reissue patent corresponding to a patent involved in the agreement, alleging inter alia that certain claims of the patents were invalid for obviousness-type double patenting over two of the Strauch patents and a third patent.  (The opinion notes that the inter partes reexaminations remain pending before the U.S. Patent and Trademark Office and did not alter the Court's resolution of the appeal.)

    In 2015, an arbitral tribunal entered an award, finding that (1) Dow breached the 1992 agreement by effectively sublicensing the pat gene to MS Tech; (2) Dow infringed various claims of the Leemans patents by its creation and other activities involving the Enlist and Widestrike products; (3) certain asserted claims were not invalid for inadequate written description or lack of enablement; and (4) certain asserted patents were not invalid for obviousness-type double patenting over the Strauch patent.  The tribunal awarded Bayer $455,459,187 in damages, including $374,731,000 in lost-opportunity damages under French law for breach of contract and $67,837,000 in reasonable-royalty damages under U.S. law for patent infringement, and also awarded Bayer pre-award interest using a rate of 8% and declared that the same rate would apply to "post-award interest."

    Bayer moved the District Court to confirm the arbitral award, and Dow cross-moved to vacate the award.  Dow also moved to amend the judgment such that post-judgment interest would accrue at the rate specified by 28 U.S.C. § 1961(a) and not at the tribunal's 8% rate for "post-award interest."  The District Court confirmed the arbitral award and denied Dow's motion to amend the judgment, and Dow appealed to the Federal Circuit.

    The Federal Circuit, after concluding that it had jurisdiction under 28 U.S.C. § 1295(a)(1), turned to the arbitral award, stating that:

    Judicial review of the arbitral award at issue here is very limited even if, as we assume for present purposes, the standards governing both international and domestic arbitration apply.  In numerous ways, the relevant federal statutes and precedents make clear that ordinary legal or factual error is not a ground for disturbing an arbitral award like the one at issue here.

    The Court also noted that "[a] challenger must meet related, and similarly high, standards to support a refusal to confirm an award as contrary to public policy."

    In view of the strict limits for disturbing an arbitral award, the Federal Circuit rejected Dow's arguments attacking the arbitral award as counter to U.S. law or policies governing double patenting and post-patent-expiration royalties.  With respect to Dow's double patenting argument, the Federal Circuit stated that "[t]he tribunal carefully scrutinized Dow's argument," and "concluded that the patents were not commonly owned because Bayer CropScience AG and Bayer CropScience NV were different entities and Dow had not provided sufficient evidence to pierce the corporate veil separating them."  The Court also rejected Dow's argument that the tribunal's contract-damages award is partially unenforceable because it violates U.S. patent law limits on the recovery of post-expiration royalties for practicing a patent, determining that:

    Under the standards for public-policy and manifest-disregard challenges, we conclude, Dow has not established that the contract award—more precisely, the portion of the award reaching past the 2023 expiration of the RE’962 reissue patent—must be vacated based on Brulotte.

    The Court noted that in Brulotte v. Thys Co., 379 U.S. 29 (1964), the Supreme Court held unenforceable a licensing agreement that required the licensee to pay royalties after the expiration of the patent.

    The Federal Circuit also rejected a number of other arguments presented by Dow for vacating the arbitral award, including the arbitral tribunal's (1) rejection of Dow's written description and enablement defenses, (2) ruling on Bayer's reissue patent, (3) misconstruction of relevant contract provisions, and (4) imposition of an 8% rate for pre-award interest.  With respect to Dow's written description and enablement defenses, the Court noted that "its arguments amount to no more than allegations of ordinary legal error," and determined that "[t]he tribunal's analysis shows no manifest disregard of law or other error meeting the standards for rejection of arbitral determinations."  The Court also determined that none of Dow's other arguments warranted vacating the arbitral award.

    Although the Federal Circuit affirmed the District Court's decision to confirm the arbitral award, the Federal Circuit concluded that the District Court abused its discretion in denying Dow's motion to amend the judgment to use the federal statutory rate for post-judgment interest for the period beginning with the entry of the District Court's judgment.  The Federal Circuit therefore exercised its discretion under 28 U.S.C. § 2106 to "affirm, modify, vacate, set aside or reverse any judgment, decree, or order of a court lawfully brought before it for review," and modified the District Court's judgment to include the relief requested by Dow's motion to amend (i.e., post-judgment interest accruing from the date on which the District Court entered judgment at the rate established in § 1961).  The Federal Circuit then affirmed the judgment as modified.

    Bayer CropScience AG v. Dow Agrosciences LLC (Fed. Cir. 2016)
    Nonprecedential disposition
    Panel: Circuit Judges Moore, Taranto, and Chen
    Opinion by Circuit Judge Taranto

  • Conference & CLE Calendar

    CalendarMarch 21, 2017 – "USPTO Examiner Interview Strategies: Preparing for and Conducting Interviews to Advance Patent Prosecution" (Strafford) – 1:00 to 2:30 pm (EDT)

    March 21, 2017 – Post-argument discussion on Impression Products, Inc. v. Lexmark International, Inc. case (American University Washington College of Law Program on Information Justice & Intellectual Property) – 4:15 to 5:45 pm (Eastern), American University Washington College of Law in Washington, DC

    March 22, 2017 – "Patent Infringement: A Legal and Economic Outlook" (The Knowledge Group) – 3:00 to 5:00 pm (EST)

    March 30, 2017 – "Latest PTAB Decisions: Leveraging Trends in Institution and Final Written Decisions, Understanding Federal Circuit Scrutiny To Date" (Strafford) – 1:00 to 2:30 pm (EDT)

    ***Patent Docs is a media partner of this conference or CLE

  • Washington College of Law Post-Argument Discussion of Impression Products v. Lexmark International

    Washington College of LawAs part of its ongoing Supreme Court series, the American University Washington College of Law Program on Information Justice & Intellectual Property will be hosting a post-argument discussion on the Impression Products, Inc. v. Lexmark International, Inc. case from 4:15 to 5:45 pm (Eastern) on March 21, 2017 at the American University Washington College of Law in Washington, DC.  The panel discussion will be moderated by Prof. Michael Carroll, American University Washington College of Law, with a panel consisting of Paul Hughes of Mayer Brown, Counsel for Petitioner; and Ariel Lavinbuk of Robins, Russell, Englert, Orseck, Untereiner & Sauber LLP, representing Costco Wholesale Corp. on amicus brief.

    Additional information about the post-argument discussion, including registration/CLE information, can be found here.

  • Webinar on Latest PTAB Decisions

    Strafford #1Strafford will be offering a webinar/teleconference entitled "Latest PTAB Decisions: Leveraging Trends in Institution and Final Written Decisions, Understanding Federal Circuit Scrutiny To Date" on March 30, 2017 from 1:00 to 2:30 pm (EDT).  Thomas L. Irving, Joshua L. Goldberg, and Cory C. Bell of Finnegan Henderson Farabow Garrett & Dunner will analyze the latest precedential and other notable Patent Trial and Appeal Board (PTAB) decisions in 2016 as well as PTAB outcomes at institution and final disposition, and offer IP counsel insight into what these decisions mean going forward and offer best practices for handling inter partes reviews (IPRs), covered business methods (CBMs), and other matters before the PTAB.  The webinar will review the following issues:

    • What are the latest developments regarding PTAB rulings on IPRs, CBMs and other matters?
    • What impact will these developments have on PTAB practice?
    • How have recent Federal Circuit opinions impacted practice at the PTAB?
    • What trends are anticipated for 2017—and how will this change PTAB practice?

    The registration fee for the webinar is $297.  Those interested in registering for the webinar, can do so here.

  • Webcast on Patent Infringement Damages

    The Knowledge GroupThe Knowledge Group will offer a live webcast entitled "Patent Infringement: A Legal and Economic Outlook" on March 22, 2017 from 3:00 to 5:00 pm (EST).  Michael A. Einhorn, Ph.D., Economic Consultant and Expert Witness and author of "Media, Technology, and Copyright: Integrating Law and Economics"; Jeffery A. Stec, Vice President, Charles River Associates; and Clifford Chad Henson of Nelson Bumgardner PC will provide attendees with an in-depth analysis of patent infringement in legal and economic perspective, and also discuss recent court opinions and their impact on the current landscape of patent infringement litigation.  The panel will cover the following topics:

    • Basics of Patent Infringement Damages
    • Analytic Frameworks for Estimating Damages
    • Determining the Royalty Base
    • Understanding the Entire Market Value Rule
    • Calculating a Reasonable Royalty Rate
    • Standards for Proving Lost Profits Damages
    • Effect of FRAND Obligations and Competition Law on Patent Damages
    • Impact of Recent Court Decisions on Patent Damages Calculation

    The registration fee for the webcast is $299 (regular rate) or $199 (government/nonprofit rate).  Those interested in registering for the webinar can do so here.

  • PTAB Life Sciences Report — Part III

    By John Cravero and Richard Martin —

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

    Smith & Nephew, Inc. v. ConforMIS, Inc.

    PTAB Petition:  IPR2017-00487; filed December 14, 2016.

    Patent at Issue:  U.S. Patent No. 9,295,482 ("Patient selectable joint arthroplasty devices and surgical tools," issued March 29, 2016) claims joint arthroplasty system for repairing a diseased or damaged joint of a patient.

    Petitioner Smith & Nephew, Inc. is challenging the '482 patent on six grounds as being obvious under 35 U.S.C. § 103(a).  View the petition here.

    Related Matters:  According to the petition, the '482 patent is the subject of a litigation captioned ConforMIS, Inc. v. Smith & Nephew, Inc., No. 1:16-cv-10420-IT (D. Mass.).  Also, Petitioner is filing a petition concurrently for Inter Partes Review of the '482 patent (IPR2017-00488).


    Smith & Nephew, Inc. v. ConforMIS, Inc.

    PTAB Petition:  IPR2017-00488; filed December 14, 2016.

    Patent at Issue:  U.S. Patent No. 9,295,482 ("Patient selectable joint arthroplasty devices and surgical tools," issued March 29, 2016) claims joint arthroplasty system for repairing a diseased or damaged joint of a patient.

    Petitioner Smith & Nephew, Inc. is challenging the '482 patent on six grounds as being obvious under 35 U.S.C. § 103(a).  View the petition here.

    Related Matters:  According to the petition, the '482 patent is the subject of a litigation captioned ConforMIS, Inc. v. Smith & Nephew, Inc., No. 1:16-cv-10420-IT (D. Mass.).  Also, Petitioner is filing a petition concurrently for Inter Partes Review of the '482 patent (IPR2017-00487).


    Acclarent, Inc. v. Ford D Albritton IV

    PTAB Petition:  IPR2017-00498; filed December 15, 2016.

    Patent at Issue:  U.S. Patent No. 9,011,412 ("Apparatus, system and method for manipulating a surgical catheter and working device with a single hand," issued April 21, 2015) claims a system, methods of use, and an apparatus of a guide catheter insertable through an external body passage of a subject.

    Petitioners Acclarent, Inc. and Johnson & Johnson are challenging the '412 patent on five grounds as being anticipated under 35 U.S.C. § 102(b) (grounds 1, 3, and 4) or obvious under 35 U.S.C. § 103(a) (grounds 2 and 5).  View the petition here.

    Related Matters:  According to the petition, the '498 patent is the subject of litigation captioned Dr. Ford Albritton IV v. Acclarent, Inc., No. 3:16-cv-03340-D (N.D. Texas).  Also, the '498 patent was the subject of a breach of contract and declaratory judgement case filed by Petitioner captioned Acclarent Inc. v. Ford Albritton IV, No. 5:16-cv-06919 (N.D. Cal.), which was dismissed without prejudice.


    Fisher & Paykel Healthcare Ltd    . v. ResMed Ltd.

    PTAB Petition:  IPR2017-00501; filed December 16, 2016.

    Patent at Issue:  U.S. Patent No. 9,027,556 ("Mask system," issued May 12, 2015) claims a mask system for delivery of a supply of gas at positive pressure to a patient for medical treatment.

    Petitioner Fisher & Paykel Healthcare Ltd. is challenging the '556 patent on twelve grounds as being obvious under 35 U.S.C. § 103(a).  View the petition here.

    Related Matters:  According to the petition, the '556 patent is the subject of litigation captioned Fisher & Paykel Healthcare Ltd. v. ResMed Corp., No. 3:16-cv-02068-DMS-WVG (S.D. Cal.).  Also, Petitioner is filing a petition concurrently for Inter Partes Review of the '556 patent (IPR2017-00504).


    Insys Development Co., Inc. v. GW Pharma Ltd.

    PTAB Petition:  IPR2017-00503; filed December 16, 2016.

    Patent at Issue:  U.S. Patent No. 9,066,920 ("Use of one or a combination of phyto-cannabinoids in the treatment of epilepsy," issued June 30, 2015) claims a method of treating partial seizure comprising administering cannabidiol (CBD), to a patient wherein the CBD is present in a specified amount or with tetrahydrocannabinol.

    Petitioner Insys Development Company, Inc. is challenging the '920 patent on three grounds as being obvious under 35 U.S.C. § 103(a).  View the petition here.

    Related Matters:  According to the petition, there are no related maters.


    Fisher & Paykel Healthcare Ltd. v. ResMed Ltd.

    PTAB Petition:  IPR2017-00504; filed December 16, 2016.

    Patent at Issue:  U.S. Patent No. 9,027,556 ("Mask system," issued May 12, 2015) claims a mask system for delivery of a supply of gas at positive pressure to a patient for medical treatment.

    Petitioner Fisher & Paykel Healthcare LTD. is challenging the '556 patent on ten grounds as being obvious under 35 U.S.C. § 103(a).  View the petition here.

    Related Matters:  According to the petition, the '556 patent is the subject of litigation captioned Fisher & Paykel Healthcare Ltd. v. ResMed Corp., No. 3:16-cv-02068-DMS-WVG (S.D. Cal.).  Also, Petitioner is filing a petition concurrently for Inter Partes Review of the '556 patent (IPR2017-00501).


    Merck Sharp & Dohme Corp. v. Mayne Pharma International Pty Ltd.

    PTAB Petition:  IPR2016-01186; filed June 11, 2016.

    PTAB Trial Instituted Document filed December 19, 2016.

    Patent at Issue:  U.S. Patent No. 6,881,745 ("Pharmaceutical compositions for poorly soluble drugs," issued April 19, 2005) claims a pharmaceutical composition consisting of an antifungal drug.

    Petitioner Merck Sharp & Dohme Corp. challenged the '745 patent on eleven grounds as being anticipated under 35 U.S.C. § 102(b) (grounds 1-9) or obvious under 35 U.S.C. § 103(a) (grounds 10 and 11).  View the petition here.  Administrative Patent Judges Toni R. Scheiner (author), Erica A. Franklin, and Jacqueline T. Harlow issued a decision instituting inter partes review of whether claims 1–3, 5–7, 9, 11, 12, and 14 are anticipated under 35 U.S.C. § 102 by Kai; claims 1, 3, 5, and 7 are anticipated under 35 U.S.C. § 102 by Thorpe; and claims 1–3, 5–7, and 9-14 are obvious under 35 U.S.C. § 103 over Kai, Sangekar, and Babcock.

    Related Matters:  According to the petition, the '745 patent is involved in a litigation captioned Mayne Pharma International Pty Ltd. v. Merck & Co., Inc., Case No. 15-cv-00438 (D. Del.).

  • Judge Bryson Rules That Jury Need Not Be Apprised of Presumption of Validity Standard for Granted Claims

    By Kevin E. Noonan —

    District Court for the Eastern District of TexasThis is a time when the eternal verities are routinely called into question, particularly in patent law.  For example, Judge Linn can state in a concurrence that, while there is no reason "in policy or statute" why the claims in Sequenom v. Ariosa are not patent eligible, he must rule that they are not based on binding Supreme Court precedent.  And earlier this week, Judge Bryson, sitting by designation in the District Court for the Eastern District of Texas (Marshall Division) ruled in a motion in limine in Erfindergemeinschaft Uroprep GbR v. Eli Lilly & Co. that a jury need not receive an instruction regarding the presumption of validity enshrined in the patent statute at 35 U.S.C. § 282 (Memorandum Opinion and Order).

    The basis for Eli Lilly's motion was that a jury might be confused by an instruction on the presumption, and Judge Bryson noted in his decision that district court cases have come down on "each side of the question."  In this case he decided to exclude evidence regarding the presumption, stating:

    In the Court's judgment, the use of the phrase "presumption of validity" would add little to the jury's understanding of the burden of proof on the validity issues.  Moreover, the phrase might be confusing to the jury, to the extent that the jury is required to consider both that phrase and the Court's instructions on the burden of proof.  At minimum, the use of the term "presumption" would require a further definitional instruction by the Court, without leading to any greater insight on the jury's part as to the nature of the burden of proof on the validity issues.  Accordingly, the Court will exclude the use of the phrase "presumption of validity" and instead will address the burden of proof in its instructions to the jury.

    The Court based its decision on Federal Circuit precedent, specifically Chiron Corp. v. Genentech, Inc., 363 F.3d 1247, 1258-59 (Fed. Cir. 2004).  In that case the issue was framed differently:  in particular, the question was whether instructions on the burden of proof were error for not including an instruction on the presumption of validity.  The Chiron court found no error because "the presumption of validity and heightened burden of proving invalidity 'are static and in reality different expressions of the same thing — a single hurdle to be cleared,'" citing Am. Hoist Derrick Co. v. Sowa Sons, Inc., 725 F.2d 1350, 1360 (Fed. Cir. 1984).  Perhaps more germane to Judge Bryson's decision, the Chiron court went on to say that "the presumption is one of law, not fact, and does not constitute `evidence' to be weighed against the challenger's evidence," citing Avia Group Int'l Inc. v. L.A. Gear Cal., Inc., 853 F.2d 1557, 1562 (Fed. Cir. 1988).  The Chiron court's reasoning, however, was that the instruction that the jury should apply the "clear and convincing" standard to the evidence made exclusion of an instruction on the presumption of validity not to be error.

    Judge Bryson's reasoning suggests that should Uroprep pursue an instruction on the proper evidentiary standard, his ruling should not affect the outcome.  It seems curious, however, that such a fundamental principle regarding the implication of the patent grant — that a patent is statutorily entitled to the presumption — should be kept from the fact-finder.  These are strange days indeed.