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  • IPRs Threatened/Filed as Money-Making Strategy

    By Joseph Herndon —

    Silver Star CapitalOn March 10, 2016, Silver Star Capital, LLC filed a petition for Inter Partes Review of U.S. Patent No. 6,212,079 (IPR2016-00736).  The patent owner is Power Integrations, Inc.  On its face, this seems like another IPR filed using the post grant review process of the AIA as intended.  However, the patent owner's preliminary response indicates otherwise, as the Principal of Silver Star Capital, LLC is Kevin Barnes.

    The '079 patent relates generally to switched mode power supplies and, more specifically, to a method and apparatus for improving efficiency in a switching regulator at light loads.  The IPR petition alleges that the '079 patent is anticipated by or obvious over a number of prior art references.

    Power IntegrationsIn the patent owner's preliminary response, the patent owner indicated that Silver Star is not in the semiconductor business, nor in the switching regulator integrated circuit ("IC") business which is the specific semiconductor product at issue in this IPR, but that Silver Star filed its Petition simply for the purpose of extorting a settlement from Patent Owner in return for not filing its Petition, and after its filing, for withdrawing the Petition.

    This extortion is being perpetrated by Kevin Barnes, Principal of Silver Star, who is certainly not new to this type of extortion.  See e.g., Ferrum Ferro Capital, LLC v. Allergan Sales, LLC, IPR2015-00858.

    Attached to the patent owner's preliminary response were many exhibits, including four letters that highlight the story here.

    First, an important fact in the story is that the '079 patent is the subject of two patent infringement litigation cases pending in the Northern District of California, Civil Actions Nos. 09-cv-5235-MMC and 15-cv-4854-MMC (e.g., Power Integrations, Inc. v. Fairchild Semiconductor International, Inc. et al., 3:09-cv-05235 (CAND); Power Integrations, Inc. v. Fairchild Semiconductor International, Inc. et al., 3:15-cv-04854 (CAND)).

    The first letter, from Mr. Barnes at Silver Star Capital to the President and CEO of Power Integrations, indicates that Silver Star has prepared an Inter Partes Review petition demonstrating the invalidity of specific claims of the '079 Patent, and that Silver Star is aware that institution of an IPR petition can potentially be denied if the real-party in interest is otherwise time-barred under the 12-month litigation threshold.  Silver Star indicated that it is in no way affiliated or in privity with Fairchild Semiconductor Corp/, System General Corp., or any other previously accused infringers of the '079 Patent.  Nevertheless, upon Silver Star filing the '079 IPR with the USPTO, formerly time-barred entities, including Fairchild Semiconductor, will have the opportunity to join Silver Star's IPR proceedings challenging the '079 Patent once the claims are instituted and aid in the prosecution to invalidity.  The first letter ends with an invitation to Power Integrations to have a discussion to determine if Silver Star should consider alternatives to its contemplated '079 IPR Petition strategy.

    The second letter, written as a response to Mr. Barnes from counsel for Power Integrations, declined the invitation and called the event a "shakedown effort".

    The third letter, written by counsel for Power Integrations as a response to a telephone call from Mr. Barnes, declined a so-called proposed "settlement".  Apparently, the settlement to forego the IPR with respect to Power Integrations' '079 patent included one of:

    • Pay Mr. Barnes $600,000 up front + 10% gross of any damages PI collects for infringement of the '079 patent going forward; or

    • Pay Mr. Barnes $1,800,000 up front + 3% gross of any damages PI collects.

    In the fourth letter, written by Mr. Barnes at Silver Start Capital to counsel for Power Integrations, Mr. Barnes put forth allegations of invalidity of the '079 patent, and noted that in a recent PTAB ruling dated September 25, 2015 (IPR2015-01169, Paper No. 21) (Coalition for Affordable Drugs VI, LLC v. Celgene Corp), in a decision denying sanctions, the judge stated:

    Profit is at the heart of nearly every patent and nearly every inter partes review.  As such, an economic motive for challenging a patent claim does not itself raise abuse of process issues.  We take no position on the merits of short-selling as an investment strategy other than it is legal, and regulated.

    Thus, Silver Star appeared on sound ground with its strategy for attempting to extract money from Power Integrations.

    As we see, instead of only targeting biopharma companies as he has in the past, Mr. Barnes is now targeting hi-tech companies.

    Previously, Mr. Barnes, the sole principal of Ferrum Ferro Capital LLC, tried a similar attempt to "shakedown" Allergan (see links below), and he has also brought more drug IPRs under different names (e.g., Gray Square Pharmaceuticals LLC), and once as an "IPR partner" of a St. Louis-based virtual generic company (Generico LLC (which collaborated on its IPR with an entity called "Flat Line Capital," whose principal is Kevin Barnes)).

    The entity called "Silver Star Capital LLC" seems to have been formed for going after valuable high tech patents that have been successfully asserted in litigation by their owners.  The strategy is simple — provide Mr. Barnes a large payment and share of the infringement damages award or Mr. Barnes will file an IPR.  And if you do not pay off Mr. Barnes, you may be in for a long batter because once the IPR is filed, formerly time-barred entities (such as the defendants being sued by the patent owner) will have the opportunity to join Silver Star's IPR proceedings challenging the '079 Patent to aid in the prosecution to invalidity.  What this means is that the defendant, who has undoubtedly spent more time, money, and effort, and who has a substantial interest to invalidate the patent, can join teams with Mr. Barnes in the IPR.

    The IPR between Silver Star and Power Integrations is on-going now, as are the two pending litigations in California.  It will be interesting to see who wins this battle, but at this stage, it would appear that Power Integrations is not backing down.

    For additional information regarding this topic, please see:

    • "Ferrum Ferro Capital Files Motion to Strike Allergan's Complaint Alleging Misuse of IPR Process," August 12, 2016
    • "Allergan Fights Back, Files Complaint Against Venture Fund That Filed IPR Petition," July 13, 2016

  • In re Aqua Products, Inc. — CAFC Grants Rehearing En Banc to Consider PTAB Motions to Amend

    By Andrew Williams —

    Federal Circuit SealOn Friday, August 13, 2016, the Federal Circuit granted a petition for rehearing en banc filed in the In re Aqua Products, Inc. case to consider two questions related to the PTAB's treatment of Motions to Amend in IPR proceedings.  Specifically, the Court requested that Appellant (Aqua Products, Inc.) and Intervenor (the Director of the U.S. Patent and Trademark Office) file supplemental briefs directed to the following two questions:

    (a) When the patent owner moves to amend its claims under 35 U.S.C. § 316(d), may the PTO require the patent owner to bear the burden of persuasion, or a burden of production, regarding patentability of the amended claims as a condition of allowing them?  Which burdens are permitted under 35 U.S.C. § 316(e)?

    (b) When the petitioner does not challenge the patentability of a proposed amended claim, or the Board thinks the challenge is inadequate, may the Board sua sponte raise patentability challenges to such a claim?  If so, where would the burden of persuasion, or a burden of production, lie?

    Aqua's supplemental brief is due by noon, September 26, 2016.  Any party wishing to file an amicus brief supporting Aqua's position or supporting neither position must be filed by noon, October 5, 2016.  The Patent Office must file its supplemental brief by noon, October 26, 2016, and any amicus briefs in support of the Office must be filed by noon, November 2, 2016.  Finally, Aqua's reply brief is due by noon, November 10, 2016.  Oral argument will be Friday, December 9, 2016 at 10:00 am.

    As readers of this blog are aware, these questions have previously been addressed by various three-judge panels on the Court.  The first case to squarely address the issue of the PTAB's practice related to motions to amend was Microsoft Corporation v. Proxyconn, Inc.  In that case, the Federal Circuit approved the PTAB's interpretation of its regulations as found in the early, "informative" decision, Idle Free Sys., Inc. v. Bergstrom, Inc., IPR2012-00027, Paper 26 (PTAB June 11, 2013).  Specifically, the Board in Idle Free had indicated that the burden is on the patent owner to show "a patentable distinction over the prior art of record and also prior art known to the patent owner."  Among other reasons, the Court found that this interpretation was consistent with the very nature of IPR proceedings — because if the motion to amend is granted, the claims will be added to an issued patent without further examination.  The Microsoft case was decided by Chief Judge Prost, Circuit Judge Lourie, and District Judge Gilstrap (sitting by designation).

    Likely due to outcries from the patent community, the Board subsequently appeared to relax the patent owner's burden to amend the claims in MasterImage 3D, Inc. v. RealD Inc., IPR2015-00040, Paper 42 (PTAB July 15, 2015).  In this case, instead of requiring the patent owner to identify how its claim amendments were patentable over all prior art, it only had to show patentability over the "prior art of record," which could include "any material art in the prosecution history of the patent."  The MasterImage 3D opinion was ultimately designated as precedential by the Board.  The Federal Circuit, in Nike v. Adidas (Fed. Cir. 2016), also acknowledged the clarification of Idle Free as made by the MasterImage 3D decision.  In the Nike case, the Board had rejected a motion to amend because Nike had failed to address prior art references that were not of record in the case.  That rejection occurred before the decision in MasterImage 3D, and the Patent Office conceded during the Federal Circuit oral argument that its reading of the Idle Free decision had been too aggressive.  Correspondingly, the Federal Circuit found the Board's ground for denying the motion to amend improper and remanded for further proceedings.  Nevertheless, the Court found the Board's interpretation of its regulations was still consistent with the statutory framework, even if it required the patentee to demonstrate the patentability of the substitute claims.  The Nike case was decided by Circuit Judges Chen, Mayer, and Stoll.

    Not every Federal Circuit judge, however, has been approving of the PTAB's motion-to-amend practice.  In Prolitec Inc. v. Scentair Technologies, Inc. (Fed. Cir. 2015), a case from late 2015, Judge Newman authored a scathing dissent for the Court's apparent acquiescence to the Board with regard to the burden shift for motions to amend.  "[T]he purpose of [the] post-grant review [system] is not to stack the deck against the patentee, but to achieve a correct and reliable result–for innovative enterprise is founded on the support of a system of patents," Judge Newman emphasized.  She had at least four main arguments.  First, she thought the America Invents Act limits the reasons that a motion can be denied, and that none of the reasons existed in the present case.  Second, Judge Newman complained that the placement of burden of proof for claim amendments on the patentee was contrary to the statute.  Third, she criticized the Court for using the "substantial evidence" standard to review these motion denials instead of reviewing these cases to determine whether the "preponderance of the evidence" standard had been correctly applied.  Finally, Judge Newman did not believe that MasterImage 3D was being followed because it had not yet been designated precedential by the Board.  Interestingly, a petition for rehearing en banc was also pending in the Prolitec case.  That petition was stayed by the Aqua order pending resolution of the issues in that case.

    For its part, the sole issue in the Aqua Federal Circuit opinion (which was vacated by the order) turned on the denial of the motion to amend.  The technology at issue in the case involved automated swimming pool cleaners.  Specifically, the patent disclosed cleaners that used angled jet drive propulsion systems to move the system in a controlled manner.  This was a less expensive alternative to cleaners in the art that required the use of motor-driven wheels.  Moreover, the motorless prior art cleaners that did exist allegedly used suction or water jets, which caused the units to move erratically.

    The three judge panel that rendered the Aqua opinion was Chief Judge Prost, Circuit Judge Reyna, and Chief District Judge Stark (sitting by designation).  The opinion did note that the because of the precedent of Microsoft and Nike, "this panel cannot revisit the question of whether the Board may require the patentee to demonstrate the patentability of substitute claims over the art of record."  Instead, the Court only considered whether the Board abused its discretion by not evaluating "objective indicia of non-obviousness and various new limitations in the proposed claims . . . ."  Ultimately, the Federal Circuit affirmed the PTAB because the Court found that the Board adequately rebutted Aqua's argument that a new limitation related to the downward vector force rear of the front wheels would make the claims patentable over the two cited prior art references.  And the Court concluded that because Aqua's arguments rested exclusively on this limitation, the Board need not have addressed the other amendments or the objective indicia of non-obviousness.

    The activity of amici should be substantial in this case.  Patent owners have been concerned about the low rates of motions to amend.  In fact, the PTAB commissioned a study to look into the issue that issued a report dated April 30, 2016.  As of the date of the study, the Board reported instituting and completing 1539 trials.  And in those cases, the Board decided the merits of a motion to amend in 118 trials (8%).  Of those, the motions were granted (or granted-in-part) in only six.  This amounts to 5% of the cases in which a motion was filed, and significantly less when considering all PTAB trials to that date.  And, even though no amicus briefs were filed in support of en banc review in the Aqua case, the Biotechnology Innovation Organization did file an amicus brief in the Prolitec case in an effort to obtain review of these issues.  Of course, the presence of a dissent in the Prolitec case made it the more conventional type of case to hope for review by the full court.  Now that an en banc petition has been granted, it would not be surprising to see a significant number of amicus briefs filed in this case.  Patent Docs will continue to monitor this case and provide any updates as warranted.

  • In re Magnum Oil Tools Int’l, Ltd. (Fed. Cir. 2016)

    By Michael Borella —

    Federal Circuit SealMcClinton Energy Group filed an inter partes review (IPR) petition against all claims of U.S. Patent No. 8,079,413, owned by Magnum Oil Tools International, Ltd.  The USPTO's Patent Trial and Appeal Board (PTAB) instituted the IPR, and eventually rendered a final decision finding that all challenged claims of the '413 patent were obvious.  Magnum appealed to the Federal Circuit and the USPTO intervened in the proceeding.

    The '413 patent is directed to downhole wellbore plugs that can be used to facilitate hydraulic fracturing ("fracking").  Since our interest in the case is focused on its procedural aspects, we will ignore the technology, including what the challenged claims of the '413 patent actually recite, as well as the teachings of the prior art.

    In its petition for review, McClinton argued in detail that all claims were obvious over three references, which we will call "A", "C", and "K".  McClinton had also contended that another reference, which we will call "L", disclosed the same relevant features as the primary reference, A.  Accordingly, McClinton also asserted that the claims were obvious over L, C, and K, but in doing so largely incorporated by reference its earlier arguments for A, C, and K, but with L replacing A.

    An IPR proceeding has two distinct phases.  First, the PTAB reviews the challenger's petition for review, and determines whether, and on what grounds, review should be instituted.  If the petitioner offers multiple grounds for review, the PTAB is permitted to institute on some, all, or none of these grounds.  If the review is instituted, an abbreviated trial is then held before the PTAB, and that body ultimately decided whether to cancel any of the claims under review.

    In this case, the PTAB instituted the IPR based on references L, C, and K, and eventually found the challenged claims obvious over this combination of references.  Magnum requested a rehearing on the basis that the PTAB had improperly relied on a new ground of rejection in its obviousness determination.  Magnum also argued that "there was no evidence supporting the [PTAB's] finding that a skilled artisan would have had a reasonable expectation of success" in combining the L and C references.  The PTAB denied the request, holding that "McClinton had explained adequately why a skilled artisan would have had a reasonable expectation of success and a motivation" to make this combination.

    Before the Federal Circuit, Magnum's main line of reasoning was that McClinton never established a prima facie case that the claims were obvious over L, C, and K.  Specifically, Magnum took the position that the PTAB erred because McClinton has not explained why one of ordinary skill in the art would have been motivated to combine L with C and K.

    At this point in the case, McClinton had dropped out due to a settlement with Magnum, and the USPTO intervened.  The USPTO countered, stating that since the IPR was instituted, the PTAB had concluded that McClinton's petition demonstrated the requisite reasonable likelihood of success.  The USPTO further argued that this finding (i.e., the decision to institute) shifted the burden to Magnum, and that Magnum had to produce evidence of non-obviousness as a result.  Essentially, the USPTO was arguing that the Board's institution decision (finding a reasonable likelihood of success that at least one challenged claim is invalid) is equivalent to establishment of a prima facie case of obviousness for all challenged claims.

    The Court disagreed.  As an initial step, the Court pointed out that:

    [T]here are two distinct burdens of proof: a burden of persuasion and a burden of production.  The burden of persuasion is the ultimate burden assigned to a party who must prove something to a specified degree of certainty, such as by a preponderance of the evidence or by clear and convincing evidence . . . .  A distinct burden, the burden of production may entail producing additional evidence and presenting persuasive argument based on new evidence or evidence already of record.

    Referring to 35 U.S.C. § 316(e), the Court observed that "[i]n an inter partes review, the burden of persuasion is on the petitioner to prove unpatentability by a preponderance of the evidence," and that this burden never shifts to the patent owner.  In contrast, patent application prosecution before the USPTO involves a burden-shifting framework in which the burden of proving claims non-obvious shifts to the applicant once the USPTO makes its prima facie case.  But, in the Court's view, such a framework does not apply in IPR proceedings.

    The burden of production, on the other hand, shifts between the petitioner and patent owner when the PTAB institutes an IPR.  For instance, if the patent owner is attempting to disqualify prior art by establishing an earlier conception and reduction to practice than the patent's filing date, the burden of production naturally falls on the patent owner.  The Court noted that "the shifting of the burden of production is warranted because the patentee affirmatively seeks to establish a proposition not relied on by the patent challenger and not a necessary predicate for the unpatentability claim asserted—effectively an affirmative defense."

    The Court stated that "the ultimate burden of persuasion of obviousness must remain on the patent challenger and a fact finder must consider all evidence of obviousness and non-obviousness before reaching a determination."  Further, the Court observed that "[t]he PTO's proposed burden shifting framework is also directly at odds with our precedent holding that the decision to institute and the final written decision are two very different analyses, and each applies a qualitatively different standard."  Particularly, a decision to institute is a preliminary, non-binding determination made without the PTAB considering the full record.  It is also non-appealable.  But, after an IPR is instituted, the PTAB is free to change its mind in view of the full record.

    Looking to the facts of the present case, Magnum's position was that the PTAB instituted the IPR based on the combination of references L, C, and K, but McClinton had only presented a prima facie case of obviousness for the combination of A, C, and K.  This, according to Magnum, amounted to the PTAB improperly incorporating by reference McClinton's arguments based on A into the conclusion that L, C, and K rendered the claims obvious.  The USPTO argued that the differences between A and L were irrelevant, and that "it is not error for the Board to rely on an unpatentability theory that could have been included in a properly-drafted petition, but was not."

    The Court concluded that the PTAB improperly shifted the burden to Magnum to disprove obviousness, essentially because the PTAB assumed without deciding that McClinton proved that L, C, and K rendered the claims obvious.  As a result, the PTAB did not require McClinton to support its claim of obviousness by a preponderance of the evidence.

    Further, the Court rejected the USPTO's position that "the Board is free to adopt arguments on behalf of petitioners that could have been, but were not, raised by the petitioner during an IPR."  Instead, the PTAB "must base its decision on arguments that were advanced by a party, and to which the opposing party was given a chance to respond."

    When drafting an IPR petition, which has a 14,000-word limit, it can be tempting to incorporate earlier arguments by reference in later grounds for institution.  This case instructs us that doing so can be fraught with danger for the petitioner.  Instead, the petitioner should attempt to make out a full prima facie case of invalidity for each of its asserted grounds.

    Additionally, the patent owner should be on the lookout for improper burden shifting and the PTAB adopting grounds of invalidity not set forth by the petitioner.  The patent owner should also take every opportunity to remind the PTAB that the burden of persuasion always remains with the petitioner.

    In re Magnum Oil Tools Int'l, Ltd. (Fed. Cir. 2016)
    Panel: Circuit Judges Newman, O'Malley, and Chen
    Opinion by Circuit Judge O'Malley

  • Conference & CLE Calendar

    CalendarAugust 16, 2016 – "Attorney's Fees in Patent and Trademark Litigation: Best Practices Two Years After Octane and Highmark" (American Bar Association Center for Professional Development) – 1:00 to 2:00 pm (EST)

    August 17, 2016 – "Navigating Patent Eligibility: Leveraging New USPTO Guidance and the Enfish and TLI Communications Decisions" (Strafford) – 1:00 to 2:30 pm (EDT)

    August 17, 2016 – "AIA Post-Grant Proceedings: Uncovering the Implications of the New AIA Review Rules" (The Knowledge Group) – 12:00 to 2:00 pm (EST)

    August 18-19, 2016 - Advanced Patent Prosecution Workshop 2016: Claim Drafting & Amendment Writing (Practising Law Institute) – San Francisco, CA

    August 25, 2016 – "The Next Wave of Data Privacy: What the GDPR, Privacy Shield and Brexit Mean for U.S. Intellectual Property Litigation" (McDonnell Boehnen Hulbert & Berghoff LLP) – 10:00 am to 11:15 am (CT)

    September 1, 2016 – "Drafting and Prosecuting Patent Applications to Withstand PTAB Scrutiny — Building Reasonable Claim Construction to Avoid Unpatentability and Using Declarations to Survive Post-Grant Proceedings" (Strafford) – 1:00 to 2:30 pm (EDT)

    September 7, 2016 – "USPTO's Subject Matter Eligibility: A 2016 Update" (The Knowledge Group) – 12:00 to 2:00 pm (EST)

    September 8, 2016 – "After-Final Practice: Navigating Expanding PTO Options to Compact Patent Prosecution — Utilizing Post-Prosecution Pilot Program (P3), After-Final Consideration Pilot 2.0, Pre-Appeal Conference and More" (Strafford) – 1:00 to 2:30 pm (EDT)

    September 8, 2016 – "Europe's Unified Patent Court and Patents with Unitary Effect: Status, Perspectives and Impact of Brexit" (Practising Law Institute) – 1:00 to 2:00 pm (Eastern)

    September 11-13, 2016 - 44th Annual Meeting (Intellectual Property Owners Association) – New York, NY

    September 14-15, 2016 - Advanced Patent Prosecution Workshop 2016: Claim Drafting & Amendment Writing (Practising Law Institute) – Chicago, IL

    September 15, 2016 – "On Sale and Public Use Bars to Patentability: Leveraging Recent Developments — Minimizing Risk of Patent Ineligibility or Invalidation" (Strafford) – 1:00 to 2:30 pm (EDT)

    September 20, 2016 – "The Shifting Landscape of Bio/Pharma Litigation: The Influence of PTAB Proceedings" (McDonnell Boehnen Hulbert & Berghoff LLP) – 10:00 am to 11:15 am (CT)

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

  • Webinar on Influence of PTAB Proceedings on Bio/Pharma Litigation

    MBHB Logo 2McDonnell Boehnen Hulbert & Berghoff LLP will be offering a live webinar entitled "The Shifting Landscape of Bio/Pharma Litigation: The Influence of PTAB Proceedings" on September 20, 2016 from 10:00 am to 11:15 am (CT).  In this presentation, MBHB attorneys Alison J. Baldwin and Paula S. Fritsch, Ph.D. will discuss the following topics:

    • A look at who is using PTAB proceedings to challenge bio/pharma patents;
    • A review of how bio/pharma patents have fared before the PTAB, since inception and more recently;
    • An analysis of how PTAB proceedings are impacting ANDA and biosimilar litigations; and
    • A discussion of the potential future impact of PTAB invalidity proceedings in the bio/pharma space.

    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.

  • Webcast on AIA Post-Grant Proceedings

    The Knowledge GroupThe Knowledge Group will offer a live webcast entitled "AIA Post-Grant Proceedings: Uncovering the Implications of the New AIA Review Rules" on August 17, 2016 from 12:00 to 2:00 pm (EST).  Thomas M. Croft of Dunlap Bennett & Ludwig PLLC and Barry J. Schindler of Greenberg Traurig, LLP will cover the following topics:

    • Patent Owner Submission of New Testimonial Evidence with Preliminary Response
    • Proper Use of new (non-petition cited) evidence in post-grant proceedings
    • Phillips-Like Claim Construction for Patent Claims that Expire Before the Proceeding Concludes
    • Sufficiency of evidence to show a motivation to combine to establish a prima facie case of obviousness
    • Practice Tips For Expert Declarations In AIA Post Grant Proceedings
    • Strategic consideration regarding petitioner’s expert rebuttal declaration
    • Word-Count Limits Instead of Page-Count Limits for Major Briefing
    • Strategic considerations in preparing for oral argument
    • Rule 11-Type Certifications for Papers Filed in Proceeding

    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.

  • Webinar on On Sale and Public Use Bars to Patentability

    Strafford #1Strafford will be offering a webinar/teleconference entitled "On Sale and Public Use Bars to Patentability: Leveraging Recent Developments — Minimizing Risk of Patent Ineligibility or Invalidation" on September 15, 2016 from 1:00 to 2:30 pm (EDT).  Daniel G. Brown of Latham & Watkins and Doris Johnson Hines and Thomas L Irving of Finnegan Henderson Farabow Garrett & Dunner will examine the on sale and public use bars to patentability/validity and the impact of the AIA on these statutory bars, discuss recent court treatment, and offer best practices to minimize the risk of patent ineligibility or invalidation.  The webinar will review the following issues:

    • How do AIA changes impact the on sale bar and the public use bar?
    • How are courts treating the on-sale bar and the public use bar?
    • What best practices can counsel employ to adapt patent prosecution and enforcement strategies?

    The registration fee for the webinar is $297.  Those registering by August 19, 2016 will receive a $50 discount.  Those interested in registering for the webinar, can do so here.

  • Webcast on Europe’s Unified Patent Court and Patents with Unitary Effect

    PLI #1Practising Law Institute (PLI) will be offering a one-hour webcast entitled "Europe's Unified Patent Court and Patents with Unitary Effect: Status, Perspectives and Impact of Brexit" on September 8, 2016 from 1:00 to 2:00 pm (Eastern).  Francesca Giovannini of Osha Liang SARL and Jeffery P. Langer of Osha Liang LLP will:

    • Provide a status of the process for the ratification of the Agreement on the Unified Patent Court;
    • Provide an overview and discuss the pros and cons of European patents with unitary effect and Unified Patent Court; and
    • Highlight strategic considerations when deciding on opting out European patents from the exclusive jurisdiction of the Unified Patent Court in the transitional period.

    The registration fee for this webcast is $299.  Those interested in registering for the webcast, can do so here.

  • Court Report

            By Sherri Oslick —

    Gavel About Court Report:  Each week we will report briefly on recently filed biotech and pharma cases.

    Takeda Pharmaceutical Co. Ltd. v. Lee
    1:16-cv-00852; filed July 1, 2016 in the Eastern District of Virginia

    Review and correction of the patent term adjustment calculation made by the U.S. Patent and Trademark Office for U.S. Patent No. 8,900,638 ("Solid Preparation Comprising Alogliptin and Metformin Hydrochloride," issued December 2, 2014).  View the complaint here.


    Alcon Pharmaceuticals Ltd. et al. v. Imprimis Pharmaceuticals, Inc.
    1:16-cv-00563; filed June 30, 2016 in the District Court of Delaware

    • Plaintiffs:  Alcon Pharmaceuticals Ltd.; Alcon Research, Ltd.
    • Defendants:  Imprimis Pharmaceuticals, Inc.

    Infringement of U.S. Patent Nos. 6,716,830 ("Ophthalmic Antibiotic Compositions Containing Moxifloxacin," issued April 6, 2004) and 7,671,070 ("Method of Treating Ophthalmic Infections with Moxifloxacin Compositions," issued March 2, 2010) based on Imprimis' manufacture and sale of moxifloxacin ophthalmic products, similar to Alcon's Vigamox® (moxifloxacin hydrochloride, used to treat bacterial conjunctivitis).  View the complaint here.


    Horizon Therapeutics, Inc. v. Par Pharmaceutical, Inc.
    1:16-cv-03910; filed June 30, 2016 in the District Court of New Jersey

    Infringement of U.S. Patent Nos. 9,095,559 ("Methods of Therapeutic Monitoring of Nitrogen Scavenging Drugs," issued August 4, 2015), 9,254,278 (same title, issued February 9, 2016), and 9,326,966 (same title, issued May 3, 2016) following Par's filing of an ANDA to manufacture a generic version of Horizon's Ravicti® (glycerol phenylbutyrate oral liquid, used as a nitrogen binding agent for chronic management of adult and pediatric patients ≥ 2 years of age with urea cycle disorders that cannot be managed by dietary protein restriction and/or amino acid supplementation alone).  View the complaint here.


    Genzyme Corp. et al. v. Zydus Pharmaceuticals (USA) Inc.
    1:16-cv-03905; filed June 30, 2016 in the District Court of New Jersey

    • Plaintiffs:  Genzyme Corp.; Sanofi-Aventis U.S. LLC
    • Defendant:  Zydus Pharmaceuticals (USA) Inc.

    Infringement of U.S. Patent Nos. 7,897,590 ("Methods to mobilize progenitor/stem cells" issued March 1, 2011) and 6,987,102 ("Methods to mobilize progenitor/stem cells" issued January 17, 2006) following a Paragraph IV certification as part of Zydus' filing of an ANDA to manufacture a generic version of Genzyme's Mozobil® (plerixafor solution for injection, used in combination with granulocyte-colony stimulating factor to mobilize hematopoietic stem cells to the peripheral blood for collection and subsequent autologous transplantation in patients with non-Hodgkin's lymphoma and multiple myeloma).  View the complaint here.  [NB: The complaint was later voluntarily dismissed without prejudice.]


    Genzyme Corp. et al. v. Amneal Pharmaceuticals LLC
    2:16-cv-03892; filed June 29, 2016 in the District Court of New Jersey

    • Plaintiffs:  Genzyme Corp.; Southern Research Institute; Sanofi-Aventis U.S. LLC
    • Defendant:  Amneal Pharmaceuticals LLC

    Infringement of U.S. Patent No. 5,661,136 ("2-Halo-2'-Fluoro ARA Adenosines as Antinoplastic Agents," issued August 26, 1997) following a Paragraph IV certification as part of Amneal's filing of an ANDA to manufacture a generic version of Genzyme's Clolar® (clofarabine injection, used to treat acute lymphoblastic leukemia).  View the complaint here.

  • Appistry, Inc. v. Amazon.com, Inc. (W.D. Wash. 2016)

    By Joseph Herndon —

    W.D. WashLast month, the U.S. District Court for the Western District of Washington granted Defendant Amazon.com's Motion to Dismiss for Invalidity under 35 U.S.C. § 101 on the grounds that the two patents asserted by Plaintiff Appistry, Inc. cover ineligible subject matter.

    This case concerns U.S. Patent Nos. 8,682,959 and 9,049,267, both of which are child patents of U.S. Patent Nos. 8,200,746 and 8,341,209.  The '746 and '209 Patents have since been held to be invalid under 35 U.S.C. § 101 (Appistry I), and so the result here for the child patents is not all that surprising.

    The '959 and '267 Patents have the same inventors, figures, and "Detailed Descriptions" as the '746 and '209 Patents.  Generally, all four patents relate to using a hive of computing machines to process information.  To do so, the claimed inventions use a system of a plurality of networked computers to process a plurality of processing jobs in a distributed manner enlisting "a request handler, a plurality of process handlers, and a plurality of task handlers."

    Defendants Amazon.com filed a Motion to Dismiss for Invalidity under 35 U.S.C. § 101 on the grounds that the '959 and '267 patents asserted by Plaintiff Appistry, Inc. cover ineligible subject matter.  The '959 and '267 contain a large number of claims (187 in total).  Claim 1 of the '267 Patent is representative and reproduced below.

    1.  A system for processing information, the system comprising:
        a plurality of networked computers for processing a plurality of processing jobs in a distributed manner, the plurality of networked computers comprising a request handler, a plurality of process handlers, and a plurality of task handlers, the process handlers being resident on a plurality of different networked computers, the task handlers being resident on a plurality of different networked computers, the processing jobs having a plurality of associated process flows, the process flows including (1) a plurality of processing tasks and (2) logic configured to define a relationship between the processing tasks of the same process flow;
        the request handler configured to (1) receive a plurality of service requests for the processing jobs, (2) store state information for the processing jobs, and (3) communicate data relating to the processing jobs to a plurality of the process handlers;
        the process handlers to which the data relating to the processing jobs were communicated being configured to (1) analyze the state information for the processing jobs to determine whether any processing tasks in the process flows remain to be performed based on the logic for the process flows, (2) in response to the state information analysis indicating that a processing task remains for the process flow of a processing job, identify a processing task to be performed for the process flow having the remaining processing task, and (3) in response to the state information analysis indicating that no processing tasks remain for the process flow of a processing job, determine that the processing job corresponding to the process flow with no remaining processing tasks has been completed; and
        the task handlers configured to perform the identified processing tasks to generate a plurality of task results; and
        wherein the request handler is further configured to store updated state information for the processing jobs, the updated stored state information being based on the task results.

    The District Court followed the traditional two-step § 101 analysis, and first determined whether the claims at issue are directed to an abstract idea.

    The Appistry I Court confronted claims virtually identical to those asserted here and found that they were directed to "the abstract idea of distributed processing akin to the military's command and control system."  The District Court here adopted that finding for the claims in the '959 and '267 Patents.

    There are differences between the claims in the '959 and '267 Patents and those in the earlier '209 and '746 Patents.  However, the District Court found those differences to be minor.  For example, the '959 and '267 Patents require that the "process handlers" and "task handlers" be resident on "different networked computers."  However, the earlier '209 and '746 Patents require no such thing.  The '959 and '267 Patents also differ in that they include the claim element "the processing jobs having a plurality of associated process flows, the process flows including . . . (2) logic configured to define a relationship between the processing tasks of the same process flow."

    The Plaintiff contended that the claims here are not directed to abstract ideas, but instead to a new computer (or, more specifically, a more efficiently and reliably distributed configuration of multiple computers), resulting in better performance.  While the District Court noted that the Federal Circuit has held that where a "claimed solution is necessarily rooted in computer technology in order to overcome a problem specifically arising in the realm of computer networks," it is not necessarily directed to an abstract idea (DDR Holdings, LLC v. Hotels.com, L.P., 773 F.3d 1245, 1257 (Fed. Cir. 2014)), the District Court disagreed with Plaintiff's contention.

    It was clear, to the District Court, that the networked computers utilized in the '959 and '267 Patents are merely generic computers tasked with performing generic functions.  In other words, the claims are not directed to solving a technological problem or to solve a challenge particular to a specific environment, nor do they contemplate some "new" type of computer.

    The District Court then turned to the second step of the § 101 analysis to determine if the claims are nevertheless patentable because they contain an "inventive concept" sufficient to "transform the claimed abstract idea into a patent-eligible application."

    Disregarding all well-understood, routine, conventional activities previously known to the industry, the District Court found that that whether viewed individually or as an ordered combination, the claims of the '959 and '267 Patents do not contain an inventive concept.

    Because the claims do little more than task generic computers with generic functions, the claims simply provide for completing a task or process by distributing it downward via a hierarchical series of "handlers" located on generic computers spread throughout a generic network.  The District Court found nothing inventive about that.

    Despite the fact that the claims recite "novel" arrangements of computing devices that likely result in more efficient processing and better performance, it seems that because the parts of the sum are conventional (e.g., using generic computers), then the sum as a whole will be deemed uninventive.  The patents here are quite detailed, and as some possible ammunition to combat such §101 attacks, it may be beneficial to build into the description actual examples of problems that the invention solves here that specifically arise in computer networks.

    Appistry, Inc. v. Amazon.com, Inc. (W.D. Wash. 2016)
    Order by District Judge Richard A. Jones