Patent Docs

TriVascular, Inc. v. Samuels (Fed. Cir. 2016)

March 29, 2016

By Kevin E. Noonan —

Early last month, the Federal Circuit addressed an important question regarding the interplay between a decision to institute inter partes review before the Patent Trial and Appeal Board and the ultimate determination by the Board regarding whether claims are invalid for the reasons contained in the petition, in TriVascular v. Samuels.

The IPR involved U.S. Patent No. 6,007,575, which claimed intraluminal stents, particularly vascular stents, and specifically such stents that can be "affixed" to vascular walls using an inflatable cuff (designated 17 in this drawing):

wherein the cuff can inflate and deflate by introducing or withdrawing fluid into circumferential ridges 25.

Claim 1 is representative:

1. An inflatable intraluminal stent adapted to be secured to the interior of a tubular structure within the human body comprising:
    a) an inflatable and deflatable cuff of generally hollow cylindrical continuation having a collapsible lumen, an inner surface, an inlet, an outlet and a friction enhancing outer surface, said friction-enhancing outer surface featuring inflatable protrusion(s) including at least one circumferential ridge disposed about the inflatable cuff, said friction-enhancing outer surface engaging the interior of the tubular structure without penetration to prevent the cuff from moving in a longitudinal direction with respect to the tubular structure when said cuff is in a fully inflated condition;
    b) means for injecting an inflation material into said cuff to inflate it; and
    c) a valve integral with the inflatable cuff for permitting entry of the inflation material from the means for injecting and thereafter sealing said cuff to prevent deflation.

TriVascular filed its IPR petition in response to an infringement action by Samuels, with the Board instituting the IPR on obviousness grounds over the combination of an earlier Samuels patent (U.S. Patent No. 5,423,851) in view of a patent to Todd (U.S. Patent No. 5,423,745) and separately over the combination of a patent to Lazarus (U.S. Patent No. 5,693,088) and the Todd patent.

At the initiation stage, the PTAB construed the term "circumferential ridge" to mean "raised strip disposed circumferentially about the outer surface of the inflatable cuff." Under that construction, the Board held that the Samuel's '851 patent did not teach away from the circumferential ridges taught in the '575 patent by teaching "penetrating anchoring barbs" and also that removing the barbs (by substituting the circumferential ridges) would not "destroy the objective" of the '851 patent.

Nevertheless, the Board held that TriVascular had not carried its burden of showing the claims to be obvious by a preponderance of the evidence. Specifically, the Board further construed the term "inflatable protrusions" to mean "protrusions that are themselves inflatable, i.e., expandable by being filled with fluid" and that these were not disclosed in the prior art (nor would there be a motivation to combine the art to achieve the invention claimed in the '575 patent). The Board also found that, under its construction the circumferential ridges were continuous and cannot be discontinuous inflatable protrusions as disclosed in the cited art. Under its claim construction and in view of expert evidence adduced during trial, the Board held that TriVascular had not carried its burden that the claims were obvious by a preponderance of the evidence.

The Federal Circuit affirmed, in a decision by Judge O'Malley, joined by Judges Moore and Wallach. The Court applied de novo review to the ultimate question of obviousness but deferred to the Board on it factual determinations. With regard to the Board's claim construction, the Court noted that the Board had used the broadest reasonable interpretation standard in assessing whether the ridges should be construed to include discontinuous embodiments. Specifically, the opinion noted that it is not reasonable to construe individual words in a claim out of context (i.e., as would be understood to be the ordinary and customary meaning of the term to one of ordinary skill in the art). In reaching its factual determinations, the Board relied upon the specification and dictionary definitions, from which it held that TriVascular's reading that the claims encompasses "discontinuous" circumferential ridges was inconsistent with the customary and ordinary meaning of the term. (In an amusing sidenote, the opinion recited that TriVascular alluded to the Blue Ridge Mountains to illustrate that a "ridge" can be discontinuous; the panel first gently castigated the petitioner for not providing any basis for imputing a "topological or cartographical" definition of the word, and in a footnote finding that the meaning of Blue Ridge Mountain did not use the word "ridge" to modify the word "mountain.") The panel also noted in a footnote that it was issuing its decision rather than await the Supreme Court's decision in In re Cuozzo Speed Tech. LLC v. Lee, because TriVascular was arguing for a broader rather than narrower construction.

TriVascular also argued the existence of prosecution history disclaimer, on the ground that during prosecution Samuels distinguished its '851 prior art patent based on continuous inflatable ridges but that the word "continuous" was not in the claims as granted. The Board found that the claims were deemed allowable after further amendment and prosecution ignored by TriVascular and that omitting the word "continuously" in favor of the phrase "at least one circumferential ridge disposed about the inflatable cuff" was not "clear and unmistakable" disclaimer. As reviewed by the Court, TriVascular bore the burden of showing "clear and unmistakable" disclaimer in order to prevail, citing Elbex Video, Ltd. v. Sensormatic Elecs. Corp., 508 F.3d 1366, 1371 (Fed. Cir. 2007).

The Court agreed with the Board that TriVascular had not met this burden, saying that the "continuous" limitation was one of several Samuels offered to distinguish over the prior art and that the Examiner never adopted this amendment as the basis for allowing the claims (indeed, the panel understood that the Examiner allowed the claims in view of amendments other than the "continuous" amendment). The panel also rejected TriVascular's argument that, to overcome prosecution history disclaimer "there must be 'written evidence' to contradict an applicant's concessions made in an amendment, and that '[w]here the record is devoid of any written documentation, no inferences can be made as to what the examiner relied upon or understood,'" purportedly relying on Litton Systems, Inc. v. Whirlpool Corp., 728 F.2d 1423 (Fed. Cir. 1984); Genzyme Corp. v. Transkaryotic Therapies, Inc., 346 F.3d 1094 (Fed. Cir. 2003); and Rohm & Haas Co. v. Crystal Chemical Co., 722 F.2d 1556 (Fed. Cir. 1983), calling that reliance "misplaced." The opinion states in this regard that this case did not involve nondisclosure of the contents of an examiner interview (Litton), nor introduction of a last-minute amendment that omitted a limitation that had been relied upon throughout prosecution (Genzyme), nor a charge of inequitable conduct based on intentional misrepresentations (Rohm), and thus none of this precedent supported TriVascular's argument.

Turning (at last) to the obviousness issue, the panel found no error in the Board's distinguishing the claimed invention from the prior art. The Samuels '851 patent disclosed stents comprising inflatable protrusions containing penetrating spikes illustrated in Fig.3 (inflated) and Fig.4 (deflated) of the patent:

while the Todd patent showed "non-penetrating 'gripping protuberances' on the outer surface of the stent," illustrated in Fig.7 (wherein the panel noted these protuberances were solid instead of inflatable:

For the panel, "a key point of distinction between the '575 patent and the prior art is that the '575 patent teaches the use of inflatable, circumferential ridges that do not penetrate the vessel wall" (emphasis in opinion). The Court agreed with the Board's decision that TriVascular had not carried its burden of showing obviousness based, inter alia, on its understanding that substituting the barbs in the Samuels '851 patent with the ridges from the Todd patent "would destroy the basic objective of the barbs, which is to penetrate the surrounding tissue" (emphasis in opinion). This in view of other distinctions (such as that the Todd patent's ridges are not inflatable) convinced the Court that there was substantial evidence supporting the Board's decision that TriVascular had not established obviousness for the claims at issue.

The most significant portion of the opinion involves the panel's rejection of TriVascular's argument that, having decided to implement the IPR, the Board was under an obligation to explain its "inconsistent" decision that the claims were not obvious:

Contrary to TriVascular's assertions, the Board is not bound by any findings made in its Institution Decision. At that point, the Board is considering the matter preliminarily without the benefit of a full record. The Board is free to change its view of the merits after further development of the record, and should do so if convinced its initial inclinations were wrong. To conclude otherwise would collapse these two very different analyses into one, which we decline to do. If those determinations were somehow binding with respect to the Board's final decision, as TriVascular urges, the patentee's appeal rights as to that second determination would be close to illusory. TriVascular's argument also fails to appreciate that there is a significant difference between a petitioner's burden to establish a "reasonable likelihood of success" at institution, and actually proving invalidity by a preponderance of the evidence at trial. Compare 35 U.S.C. § 314(a) (standard for institution of inter partes review), with 35 U.S.C. § 316(e) (burden of proving invalidity during inter partes review). The Board's findings in its Final Written Decision were thus not inconsistent with those in its Institution Decision; they were made under a qualitatively different standard (emphasis in opinion).

These differences in the record supporting the Board's nonobviousness determination included expert testimony and an appreciation that the art provided no basis for substituting just the barbs in the Samuels '851 patent with the protuberances of Todd, particularly because even if substituted the Todd protuberances would not satisfy the limitation that the circumferential ridges be inflatable.

TriVascular, Inc. v. Samuels (Fed. Cir. 2016)
Panel: Circuit Judges Moore, O'Malley, and Wallach
Opinion by Circuit Judge O'Malley
The VENUE Act — A Last-Ditch Attempt at Patent Reform?

March 28, 2016

By Andrew Williams —

It has been some time since we have heard serious discussions about patent reform legislation from Congress. Sure, the Innovation Act (H.R. 9) is still pending in the House, and the Patent Act (S. 1137) is still pending in the Senate. But even though these bills resemble the Innovation Act (H.R. 3309), which was passed by the House of Representatives by an overwhelming margin on December 5, 2013 (see "Innovation Act Passed By House — A Closer Examination"), and even though everyone predicted that the Republican's success in the mid-term elections would resolve the patent reform deadlock (see "Patent Litigation Reform — Will the Outcome of the Mid-Term Elections Matter, and Is Reform Still Necessary?"), further Congressional action has been almost non-existent. Therefore, it came as a bit of a surprise that on March 17, 2016, Sen. Flake of Arizona introduced S. 2733, the "Venue Equity and Non-Uniformity Elimination Act of 2016," on behalf of himself, Sen. Gardner of Colorado, and Sen. Lee of Utah (all Republicans). This VENUE bill (wherein the "V" stands for venue) is limited to one single issue – amending Section 1400 of title 28 of the United States Code to limit the venues in which patent holders could bring patent infringement lawsuits.

We have written extensively on the patent reform initiatives that have been percolating in Congress over the past few years. One of the main concerns that has been expressed regarding these "omnibus" patent reform bills (such as the Innovation Act) is that they contain many provisions that are not narrowly tailored to address the perceived problem of "Patent Trolls." Instead, these initiatives were more akin to blunt instruments that would have impacted all patent owners regardless of whether they were asserting their patents in an abusive manner. In fact, we have even questioned whether patent reform is still necessary in view of the recent opinions by the Supreme Court in the past few years and the rise of IPR and CMB patent proceedings before the Patent Trial and Appeal Board (see "Patent Litigation Reform — Will the Outcome of the Mid-Term Elections Matter, and Is Reform Still Necessary?").

The Venue bill itself is more narrowly tailored to one particular perceived problem — the use of the Eastern District of Texas as the venue of choice by patent trolls. Currently, venue for patent litigation is controlled by 28 U.S.C. § 1400(b), as understood in view of 28 U.S.C. § 1391(c):

Any civil action for patent infringement may be brought in the judicial district where the defendant resides, or where the defendant has committed acts of infringement and has a regular and established place of business.

28 U.S.C. § 1400(b). And, even though that appears clear on its face, the Federal Circuit has concluded that 28 U.S.C. § 1391(c) controls:

(2) an entity with the capacity to sue and be sued in its common name under applicable law, whether or not incorporated, shall be deemed to reside, if a defendant, in any judicial district in which such defendant is subject to the court's personal jurisdiction with respect to the civil action in question and, if a plaintiff, only in the judicial district in which it maintains its principal place of business.

28 U.S.C. § 1391(c). So, basically, any judicial district in which a corporation is subject to personal jurisdiction is considered to be an appropriate venue.

Of course, the problem with this approach is that certain district courts can become popular for patent infringement litigation, even when the relationship to the alleged action appears tenuous at best. This is exactly what has happened in the Eastern District of Texas — this venue is often cited as the poster child for patent abuse by every anti-patent advocate. This bill, however, does not call out the Eastern District of Texas specifically, but instead mandates that patent infringement suits (or related patent invalidity actions) can only be brought in a judicial district that has a tie to the action in some way. The Act does this by first amending the statute to read "(b) Notwithstanding subsections (b) and (c) of section 1391 . . . ." This is apparently necessary to avoid the more expansive reading of what constitutes proper venue (as interpreted by the Federal Circuit). Then, the act adds language to dictate that patent litigation can only be brought based on actions of the alleged infringer (such as where the corporation is located, or where it committed the acts that lead to the lawsuit), actions of the inventor (such as where the research and development of the invention occurred), and even actions of a Plaintiff that did not originally obtain the patent, provided that party has done something in the district related to the suit (such as manufacturing products covered by the patent). The act also makes it easier to seek mandamus relief, and clarifies that teleworkers in a particular location do not subject the corporation to proper venue there.

In general, this bill appears to be less controversial than the previous bills, and therefore stands a decent chance of passing. That is, of course, if the groundswell of support for such patent reform still exists. Moreover, its passage will help minimize the need for the more comprehensive bills that are currently pending. With regard to whether this bill will be successful at accomplishing its goal if it passes, it can be safely assumed that it will likely result in fewer patent infringement suits properly brought in the Eastern District of Texas. However, it will be interesting to see if this will deter other "patent troll"-like activity. Or, will this bill just require patent trolls to file in several different districts (some of which might not be as patent owner friendly). The one thing that is sure is that the likely outcome if passed is that this bill will cause an uptick in the number of cases filed in Delaware. This is because the bill allows infringement actions to take place in the states where defendants are incorporated, and many companies are incorporated in Delaware. It probably does not help that Delaware is seen as more patent friendly than most.

Interestingly, this legislation comes on the heels of the oral argument at the Federal Circuit for In re TC Heartland LLC case. The defendant of the Kraft Foods Group Brands LLC v. TC Heartland, LLC litigation had petitioned the appeals court for a writ of mandamus to the U.S. District Court for the District of Delaware in order to have the case transferred to Indiana. TC Heartland is asking the Court to consider statutory changes that were previously made to the above-referenced sections. The argument is that Congress amended the venue statute recently, thereby making § 1400(b) controlling. As such, it should be more difficult for patent holders to bring suits wherever they want. In essence, TC Heartland is asking the Federal Circuit to make changes to the understanding of what is proper venue that are similar to those found in the recently introduced bill. Most likely a function of coincidence, Judge Moore during oral argument commented that the changes TC Heartland is seeking might be more appropriately made by Congress. Within days of that comment, the Venue bill was introduced.

We will continue to monitor the progress (if any) of this bill, and will have a more completely report of the In re TC Heartland case after the Federal Circuit renders its decision.
Purdue Pharma L.P. v. Depomed, Inc. (Fed. Cir. 2016)

March 27, 2016

By Kevin E. Noonan —

Last Thursday, the Federal Circuit handed down its non-precedential decision in Purdue Pharma v. Depomed, reviewing the decision of the Patent Trial and Appeal Board on three related inter partes reviews. While not quite a unicorn, the PTAB decision was unusual in that it affirmed the validity of all claims at issue over a challenge for obviousness.

The challenged patents, U.S. Patent Nos. 6,340,475 and 6,635,280, claimed "controlled-release oral dosage form[s] of a soluble drug and a method of use thereof," which comprised drug dispersed within a solid polymeric matrix. Such dosage forms were structured so that, after administration, the matrix would swell in the stomach (from absorbing water) and as a consequence remain in the stomach in the presence of food. As a result, release of the drug from the matrix and adsorption by the body is delayed, which reduces the risk of overdose and controls drug dosage over an extended period of time at safer and more effective levels.

The three IPRs were directed to the following claims, all asserted to be invalid for obviousness: (1) claims 1, 8–10, 13–15, 43, 45, and 46 of the '280 patent; (2) claims 1, 8–10, 13–15, 61, and 62 of the '475 patent; and (3) claims 43, 54, 55, 57, 58, and 66 of the '475 patent. Claims 1 and 43 of the '475 patent are representative:

1. A controlled-release oral drug dosage form for releasing a drug whose solubility in water is greater than one part by weight of said drug in ten parts by weight of water,
    said dosage form comprising a solid polymeric matrix with said drug dispersed therein at a weight ratio of drug to polymer of from about 15:85 to about 80:20,
    said polymeric matrix being one that swells upon imbibition of water thereby attaining a size large enough to promote retention in the stomach during said fed mode ["the swelling limitation"],
    that releases said drug into gastric fluid by the dissolution and diffusion of said drug out of said matrix by said gastric fluid,
    that upon immersion in gastric fluid retains at least about 40% of said drug one hour after such immersion and releases substantially all of said drug within about eight hours after such immersion,
    and that remains substantially intact until all of said drug is released ["the substantially intact limitation"].

43. A method of administering to a subject a drug that is therapeutic to said subject when absorbed in the stomach where said drug has at least one ionized group in the pH range 5 through 8,
    said method comprising orally administering to said subject a dosage form of said drug while said subject is in a fed mode,
    said dosage form comprising a solid polymeric matrix with said drug dispersed therein at a weight ratio of drug to polymer of from about 0.01:99.99 to about 80:20,
    said polymeric matrix being one that:
    (a) swells upon imbibition of gastric fluid to a size large enough to promote retention in the stomach during said fed mode ["the swelling limitation"],
    (b) releases said drug into gastric fluid by the dissolving of said drug by said gastric fluid and either erosion of said matrix or diffusion of said dissolved drug out of said matrix,
    (c) retains at least about 40% of said drug one hour after such immersion in gastric fluid,
    (d) releases substantially all of said drug within about ten hours after such immersion, and
    (e) remains substantially intact until all of said drug is released ["the substantially intact limitation"],
    thereby extending the release rate of said drug with time during said fed mode while releasing substantially all of said drug within said stomach where said drug is maintained in an acidic environment.

Petitioner Purdue Pharma asserted several prior art references, only two of which were relevant to the PTAB's decision and reviewed by the Federal Circuit: a scientific journal article by Baveja et al., Zero-Order Release Hydrophilic Matrix Tablets of β-Adrenergic Blockers, 39 Int'l J. Pharmaceutics 39 (1987) ("Baveja"), and U.S. Patent No. 5,582,837 ("Shell").

The PTAB held that Purdue had failed to establish that the claims were invalid for obviousness by a preponderance of the evidence, the Board standard in IPRs. It agreed with Purdue that the Baveja reference disclosed delayed release drug formulations but failed to disclose the "swelling" and "substantially intact" limitations, and that the Shell patent disclosed drug formulations comprising these missing limitations. Nevertheless, the Board held that Purdue failed to show that the art provided "a reasoned basis for combining these references with a reasonable expectation of success" at achieving the claimed formulations. Specifically, the Board held that Purdue had failed to show the "how or why" the skilled worker would have combined the features from the Shell patent in the Baveja formulation. In addition, the PTAB held that insofar as the motivation to combine the cited references was determined by the problem to be solved it constituted hindsight reconstruction and thus was not a proper basis for finding the claims to be obvious.

In addition, the Board found that Purdue had not established that there would have been a reasonable expectation by the skilled worker of success, based on expert testimony proffered by the patentee on the number of variables involved in combination with inventor testimony regarding how long it had taken to achieve the claimed formulation. In addition, the Board held that Purdue had not shown that adding the swelling and substantially intact features would not change the other properties of the formulation.

The Federal Circuit affirmed, in an opinion by Judge Lourie, joined by Chief Judge Prost and Judge Newman. The Court reviewed the Board's legal conclusion of obviousness de novo and its factual determinations for substantial evidence (citing In re Gartside). Moreover, concerning the questions before it, the panel stated that "the determinations of what a reference teaches and the existence of a reason to combine references are questions of fact," citing In re Beattie, 974 F.2d 1309, 1311 (Fed. Cir. 1992), and In re Hyon, 679 F.3d 1363, 1365–66 (Fed. Cir. 2012). The opinion agreed that there was substantial evidence supporting the Board's determination that "each limitation of the challenged independent claims was known in the art, as evidenced by the teachings of Baveja and Shell." However, the Court also agreed that Purdue bore the burden of showing that the skilled worker had a reason to combine these teachings and have had a reasonable expectation of success, citing PAR Pharm., Inc. v. TWI Pharm., Inc., 773 F.3d 1186, 1193 (Fed. Cir. 2014). The Court credited the expert opinion relied upon by the Board that the teachings of the cited references were "interrelated," but found that Purdue "did not explain in sufficient detail how or why a skilled artisan would have been motivated to combine the 'swelling' and 'substantially intact' features of the Shell formulation with the Baveja formulation to attain the claimed dosage form." Regarding the Board's hindsight determination, the Court found that "[Purdue] failed to demonstrate to the Board that the problem was known in the art or that Purdue's formulation of the problem was derived directly from the prior art, rather than from the challenged claims," citing Insite Vision Inc. v. Sandoz, Inc., 783 F.3d 853, 859 (Fed. Cir. 2015), for the proposition that "[d]efining the problem in terms of its solution reveals improper hindsight in the selection of the prior art relevant to obviousness." The panel also agreed with the Board that Purdue had failed to show that the skilled worker would have expected that modifying the dosage formulation disclosed by Baveja to incorporate the features of the Shell patent would not affect (presumably negatively) the "other desired properties" of the patented formulation.

While being of limited significance (constrained by its facts and lacking precedential value), the case may provide some comfort that the PTAB can in the right circumstances uphold the validity of a pharmaceutical claim challenged for obviousness with sufficient legal support to be affirmed by the Federal Circuit.

Purdue Pharma L.P. v. Depomed, Inc. (Fed. Cir. 2016)
Nonprecedential disposition
Panel: Chief Judge Prost and Circuit Judges Newman and Lourie
Opinion by Circuit Judge Lourie
Conference & CLE Calendar

March 27, 2016

March 30, 2016 – "Patent Prosecution from a Litigator's Viewpoint: Position Your Patent to Succeed in Litigation & Post-Grant Procedures" (American Intellectual Property Law Association) – 12:30 – 2:00 pm (Eastern)

March 31, 2016 – "Conducting and Analyzing Patent Searches — Strategies for Validity, Patentability, Infringement, FTO and State-of-the-Art Searches" (Strafford) – 1:00 to 2:30 pm (EDT)

April 1, 2016 – "Obviousness, the CAFC, and Second Generation Filing Strategies" (Practising Law Institute) – 1:00 to 2:00 pm (Eastern)

April 5, 2016 – "Two Views of the U.S. Patent and Trademark Office" (John Marshall Law School Center for Intellectual Property, Information & Privacy Law) – Chicago, IL

April 5-7, 2016 – IP Strategy, Patent Portfolio Development and Innovation*** (Fleming) – Boston, MA

April 12, 2016 – "A Federal Trade Secrets Act? The Defend Trade Secrets Act of 2016" (McDonnell Boehnen Hulbert & Berghoff LLP) – 10:00 am to 11:15 am (CDT)

April 13, 2016 – "Protecting Your IP Overseas: WIPO Services and Initiatives" (World Intellectual Property Organization, American Intellectual Property Law Association, and U.S. Patent and Trademark Office) – Nashville, TN

April 14, 2016 – "Building a Winning Evidentiary Record at the PTAB (and Surviving Appeal) — Selecting and Tailoring Evidence, Timing of Submission by Petitioner and Patent Owner, and Best Practices for Challenging Evidence" (Strafford) – 1:00 to 2:30 pm (EDT)

April 15, 2016 – "Protecting Your IP Overseas: WIPO Services and Initiatives" (World Intellectual Property Organization, American Intellectual Property Law Association, and U.S. Patent and Trademark Office) – Atlanta, Georgia

April 21, 2016 – 32nd Annual Joint Patent Practice Seminar (Connecticut, New Jersey, New York, and Philadelphia Intellectual Property Law Associations) – New York, NY

***Patent Docs is a media partner of this conference or CLE
JMLS IP Lecture Series

March 26, 2016

Nathan Kelley, Acting Chief Administrative Patent Judge for the U.S. Patent and Trademark Office's Patent and Trial Appeal Board, will give a presentation on "Two Views of the U.S. Patent and Trademark Office" from 4 to 5:30 pm on April 5, 2016 as part of the John Marshall Law School Center for Intellectual Property, Information & Privacy Law IP Lecture Series. Judge Kelley, who previously served as the USPTO's Solicitor and Deputy General Counsel for Intellectual Property Law, will share insights and observations gained from his service as Solicitor and now as Acting Chief Judge of the PTAB.

Those interested in registering for the lecture can do so here; the registration fee is $20 (general registration); JMLS Students, Faculty, and Staff can register for free.
Webcast on Second Generation Filing Strategies

March 26, 2016

Practising Law Institute (PLI) will be offering a one-hour webcast entitled "Obviousness, the CAFC, and Second Generation Filing Strategies" on April 1, 2016 from 1:00 to 2:00 pm (Eastern). Brian C. Trinque, Ph.D. of Lathrop & Gage LLP will provide a summary of the most recent Federal Circuit cases pertaining to "second generation" patents, which are directed toward discoveries involving previously-known pharmaceuticals, such as pharmaceutical formulations, dosing strategies, and combination therapies. The webcast will include:

• A discussion of the most recent Federal Circuit cases that focus on second generation patents;
• Practice tips for effectively preparing pharmaceutical patent applications for filing in the U.S. and abroad; and
• A brief discussion of recent small-molecule obviousness cases decided by the Federal Circuit.

The registration fee for this webcast is $299. Those interested in registering for the webcast, can do so here.
Webinar on Evidentiary Issues in PTAB trials

March 26, 2016

Strafford will be offering a webinar/teleconference entitled "Building a Winning Evidentiary Record at the PTAB (and Surviving Appeal) — Selecting and Tailoring Evidence, Timing of Submission by Petitioner and Patent Owner, and Best Practices for Challenging Evidence" on April 14, 2016 from 1:00 to 2:30 pm (EDT). Scott E. Kamholz, M.D., Ph.D., of Foley Hoag; Teresa (Terry) Rea of Crowell & Moring; and James Donald Smith, Chief IP Counsel, Ecolab will provide patent counsel with guidance for navigating evidentiary issues in PTAB trials; look at PTAB evidentiary standards, address types of permitted discovery, contrast the weight versus admissibility of evidence, review timing requirements, and examine evidentiary objections; and discuss best practices for the use of expert witnesses and considerations for ensuring that a evidentiary record stands up to Federal Circuit review. The webinar will review the following issues:

• How can practitioners prepare and submit evidence to support the petitioner's or patent owner's position?
• What limitations do patent owners face in submitting evidence?
• What best practices should practitioners employ when challenging evidence and expert analysis?

The registration fee for the webinar is $297. Those interested in registering for the webinar, can do so here.
32nd Annual Joint Patent Practice Seminar

March 26, 2016

The Connecticut, New Jersey, New York, and Philadelphia Intellectual Property Law Associations will be holding their 32nd Annual Joint Patent Practice Seminar on April 21, 2016 in New York, NY. The seminar will consist of five panels: USPTO Practice, PTAB, Pharmaceuticals/Life Sciences, Foreign Practice/Licensing, and Litigation with each panel addressing a series of cases and topics. An agenda for each of the panels can be found here.

A featured morning address will be given between 8:40 and 9:15 am by Drew Hirshfeld, Commissioner of Patents, U.S. Patent and Trademark Office. In addition, Nathan Kelley, Acting Chief Administrative Judge, USPTO Patent Trial and Appeal Board, will provide an address on the "State of the PTAB and Recent Developments," and Hon. Kathleen M. O'Malley, Circuit Judge, U.S. Court of Appeals for the Federal Circuit will provide a keynote address.

The registration fee for the conference is $450 (for those registering by April 8, 2016). Those interested in registering for the conference can do so here.
Square, Inc. v. Protegrity Corp. (PTAB 2016)

March 24, 2016

U.S. Patent to Database for Protecting Formula for Coca-Cola Found Invalid under CBM Review

By Joseph Herndon —

On March 2, 2016, the USPTO Patent Trial and Appeal Board (PTAB) issued a final written decision in the Covered Business Method (CBM) patent review between Square, Inc. and Protegrity Corp., in which challenged claims were found to be unpatentable under 35 U.S.C. § 101 as being directed to non-statutory subject matter, and proposed substitute claims were denied. The PTAB's institution of the CBM is questionable, however, since the claims do not recite anything even remotely close to some kind of financial product or service.

Square, Inc. filed a petition requesting a review under the transitional program for CBM patents of claims 1–60 of U.S. Patent No. 8,402,281, and challenged the claims under 35 U.S.C. §§ 101, 102, and 103. The '281 patent, titled "Data Security System for a Database," issued on March 19, 2013 and has a priority date of June 18, 1997. The '281 patent discloses a database management system for protecting data that includes multiple databases, including an operative database ("O-DB") and an information assets manager database ("IAM-DB"). The O-DB contains data that is to be protected. The IAM-DB contains a data element protection catalogue with protection attributes for such data element types as are associated with data element values in records in the operative database O-DB and is preferably physically separated from the other O-DB. The protection attributes state rules for processing the corresponding data element values DV. For example, a protection attribute indicates the degree to which data element value DV is encrypted or indicates that only accepted, or certified, programs are allowed to process data element value DV. When a user initiates an attempt to process certain data element value DV, a calling is created to data protection catalogue DPC to obtain the protection attributes associated with the data element type for data element value DV.

Claim 33 of the '281 patent is illustrative of the claims at issue and is reproduced below.

33. A computer-implemented data processing method comprising:
    maintaining a database comprising a plurality of data portions, each data portion associated with a data category;
    maintaining a separate data protection table comprising, for at least one data category, one or more data processing rules associated with the data category that must each be satisfied before a data portion associated with the data category can be accessed;
    receiving a request to access a data portion associated with a first data category from a user;
    determining whether each of the one or more data processing rules associated with the requested data portion are satisfied; and
    granting the user access to the requested data portion responsive to each of the retrieved one or more data processing rules being satisfied.

Standing to Seek CBM Patent Review

A CBM patent claims a method or corresponding apparatus for performing data processing or other operations used in the practice, administration, or management of a financial product or service, except that the term does not include patents for technological inventions.

i. Financial Product?

Protegrity contended that the '281 patent does not claim a financial service or product because not a single word in any single claim of the '281 Patent is purportedly directed to a financial product or service.

The PTAB does not require a literal recitation of terms of data processing of financial products or services in the claim for CBM standing. The legislative history states that "the patent claims must only be broad enough to cover a financial product or service." In this regard, claim 33 recites a "computer-implemented data processing method" and includes a step of "determining whether each of the one or more data processing rules associated with [a] requested data portion are satisfied." The PTAB noted that the '281 patent discloses that protection attributes (i.e., the claimed data processing rules) are used to protect against unauthorized access of a data portion in a database and that banking is a field where protection against unauthorized access to databases that are used for administering and storing sensitive information is desired.

The PTAB also noted that although not sufficient on its own, the '281 patent is classified in 705/51 of the Office's patent classification system, which served as the original template for the definition of a CBM. Further, the PTAB noted that whether an allegedly infringing product was a financial service was another factor to consider.

The PTAB found that this totality of evidence showed that at least claim 33 encompasses activities that are financial in nature, incidental to a financial activity, or complementary to a financial activity.

ii. Technological Invention?

The definition of CBM patents does not include patents for "technological inventions." To determine whether a patent is for a technological invention, the PTAB considers whether the claimed subject matter as a whole recites a technological feature that is novel and unobvious over the prior art; and solves a technical problem using a technical solution.

Data processing computers that have separate databases, which store associated data and associated rules, were known at the time of filing the '281 patent. The claims do no recite details of managing a collection of data and for making a calling to the data protection table. Thus, at least claim 33 does not recite a technological feature that is novel or unobvious over the prior art and does not satisfy the first prong of the test. The '281 patent, thus, is a CBM patent that is not a technological invention.

35 U.S.C. § 101

With respect to the challenge of the claims under 35 U.S.C. § 101, the PTAB first found that the claims are directed to the abstract idea of determining whether access to data should be granted based on whether one or more rules are satisfied. Second, merely reciting a generic computer in the claims cannot transform a patent-ineligible abstract idea into a patent-eligible invention.

Protegrity submitted declarations allegedly show that the invention of the '281 patent was used to protect the formula for Coca-Cola from unauthorized access by database administrators or system administrators. The PTAB, however, found that the declarations failed to establish a nexus between the system provided to Coca-Cola and the claims of the '281 patent. Thus, the PTAB was not persuaded by the declarations, and found that the '281 patent does not provide a novel and nonobvious solution to a problem deeply rooted in computer technology.

The PTAB analyzed all claims and noted that all features in the claims were well-known and conventional at the time of filing the '281 patent. According to the PTAB, such well-known features included:

• Data processing computers having separate databases, which store associated data and associated attributes,

• Restricting access to data based upon a user, a program or version of a program, whether activity logging is occurring, or to columns or fields of databases,

• Different levels of encryption and storing and transmitting encrypted data,

• Encrypting data using a cryptographic key and providing the key to authorized users.

Thus, all claims were found patent ineligible under section 101 as being directed to an abstract idea without any inventive features.

Motion to Amend

Protegrity filed a Motion to Amend that requested cancellation of claims 1–32 (which was granted) and to substitute new claims 61–68 for some of the challenged claims, but this aspect was denied by the PTAB.

In a CBM patent review, an amendment may not broaden a challenged claim in any respect when responding to a challenge of unpatentability. An amendment also may not introduce new matter.

Notably, proposed substitute claim 61 was amended to add a limitation that requires "automatically calling from the database to the separate data protection table to collect each of the plurality of data processing." Proposed substitute claim 61 was also amended to delete the limitation that requires "determining whether each of the one or more plurality of data processing rules associated with the request data portion are satisfied."

First, deleting this feature from the claim necessarily broadened the scope of the claim in some respect, and so the amendment is denied entry for this reason.

Second, the '281 patent and its original disclosure do not "clearly" define or describe a calling from the database to the separate date protection table. Although the '281 patent describes a calling to collect the data protection attributes, it does not describe that the calling is from the database. Protegrity, thus, failed to show that the proposed substitute claims are adequately supported by the written description.

Thus, the PTAB denied entry of the substitute claims, and determined that remaining claims 33–60 are unpatentable under 35 U.S.C. § 101 as being directed to non-statutory subject matter.

An interesting aspect in this CBM is whether it should have been instituted in the first place. The patent claims recite nothing that can be considered as a "financial product or service", but the fact that the claims may cover some financial product or service is enough, according to the PTAB. If the patent description describes any kind of financial product or service, then the claims will be considered to possibly cover one. Further, if the alleged infringing product is a financial product, then of course, the claims will be considered to cover a financial product.

The problem in this instance is that if this CBM was not instituted, then the challenger could only have sought review by the PTAB through reexamination or inter partes review, both of which prohibit challenges under 35 U.S.C. § 101. Then, the challenger/defendant would have had to assert invalidity under 35 U.S.C. § 101 in court, which follows a more strict standard for claim interpretation. This may not really have changed the outcome here though, since the claims at issue are quite broad and lacking in novelty and technical features.

Square, Inc. v. Protegrity Corporation (PTAB 2016)
Before Kevin F. Turner, Meredith C. Petravick, and Gregg I. Anderson, Administrative Patent Judges.
Final Written Decision by Meredith C. Petravick
CRISPR Interference Motions Set

March 23, 2016

By Kevin E. Noonan —

The Patent Trial and Appeal Board has made its decision regarding the motions each party will be able to bring in Interference No. 106,048 between the Broad Institute and the University of California ("University") over CRISPR (an acronym for Clustered Regularly lnterspaced Short Palindromic Repeats). As discussed previously (see "CRISPR Interference Declared"), this interference will determine patent rights for CRISPR, which is part of a system for altering chromosomal sequences in situ in a cell in combination with a bacterially derived protein called Cas9, has been hailed as the "Breakthrough of the Year" for 2015, and rightfully so. CRISPR provides a mechanism for inserting or deleting specific DNA sequences using CRISPR-associate targeting RNAs and the Cas9 RNA-guided DNA endonuclease enzyme. It provides for the first time the type of specificity for altering DNA that the polymerase chain reaction (PCR) provided a generation ago for amplifying specific DNA, as illustrated by this schematic:

As part of the interference proceedings, each party proposed a set of motions directed to altering the procedural posture of the case and to challenge patentability of each other's patents or applications involved in the interference. Last Thursday, the Board ruled on whether it would authorize those motions; those decisions and the substance of the proposed motions are set forth below.

The Broad Institute suggested the following motions:

1. A motion that there is no interference in fact between its claims designated by the PTAB as corresponding to the Count (i.e., comprising interfering subject matter) and the University of California's claims. (Motions 2-13)

Permission to file this motion was GRANTED, as a threshold issue that could decide the interference at the beginning. As the Board explained, "[a] holding of no interference in-fact means that none of a party's claims meet the 'two-way' test for the existence of an interference under 37 C.F.R. § 41.203(a). Under such circumstances, no one has standing to proceed because the parties are not claiming interfering subject matter." Should the Broad Institute prevail, the parties would exit the interference with the claims corresponding to the Count, and the University should have its claims granted.

2. Thirty-three motions that the Broad's dozen patents involved in the interference should be accorded the benefit of priority to 16 provisional applications. (Motions 14-46)

Permission to file one motion on the priority issue was GRANTED but limited to no more than four provisional applications. In addition, the Broad Institute must provide a claim chart containing one column reciting the elements of the count and a second column providing "only citations to the asserted disclosure in the specification of the earlier application" but no other argument or information.

3. A motion that the University's claims corresponding to the count are unpatentable for lack of written description. (Motion 47)

Permission to file this motion was GRANTED as being directed to a threshold issue, which the Board explained would result in judgment against the University for lack of standing to participate in the interference.

4. A motion that the University's claims corresponding to the count are unpatentable for lack of enablement. (Motion 48)

Permission for this motion was DEFERRED because it "does not appear to impact the priority contest."

5. Motions that the University claims are not patentable over "certain prior art." (Motions 49-50)

Permission for this motion was DEFERRED for substantially the same reasons for deferring Motions 48.

6. A motion for access to the prosecution histories of the University's related, pending, unpublished applications, and that the University keep the Board and the Broad informed regarding the status of the claims of these applications with regard to whether the Examiner has issued a notice of allowance. (Motion 57)

This motion was DENIED regarding access but GRANTED regarding keeping the Board and the Broad Institute informed, and to keep the Examiner in each of these pending applications informed regarding the existence of the interference.

The University suggested the following motions:

1. A motion that all of the claims of all of the Broad's patents are invalid over the publication of the University's application in interference, based on an error in how the Broad's application was filed involving changes resulting from the America Invents Act. (Motion 1)

Consideration of this motion was DEFERRED because, as with some of the Broad Institute's claims, this motion does not impact the priority questions before the Board. Unspoken but implicit in the Board's reasoning was that there were other avenues for challenging validity of the Broad Institute's patents (including, inter alia, inter partes review).

2. Five motions to change the count. (Motions 2-5)

Permission to file one motion was GRANTED, based on the University identifying the count that "best describes the interfering subject matter and sets the scope of admissible proofs in a way that is just to both parties," or in the alternative two claims if the University can show that both are necessary to describe the interfering subject matter (but the University cannot propose alterative counts).

3. A motion to have the Board give the University the priority benefit of its provisional application as a constructive reduction to practice of the original or alternative count. (Motion 6)

Permission to file this motion was GRANTED. As with a similar motion by the Broad Institute, the Board requires the University to file a claim chart containing one column reciting the elements of the count and a second column providing "only citations to the asserted disclosure in the specification of the earlier application" but no other argument or information.

4. A motion that the Broad's involved claims are anticipated by certain prior art. (Motion 8)

Permission for this motion was DEFERRED for substantially the same reasons for deferring the Broad Institute's Motions 48-50.

5. A motion that each of the Broad's patents are unpatentable under the doctrine of obviousness-type double patenting. (Motion 9)

Permission for this motion was DEFERRED for substantially the same reasons for deferring Motion 8.

6. A motion that each of the Broad's patents are unpatentable for improper inventorship. (Motion 10)

Permission for this motion was DEFERRED, with the Board advising that if relevant, it would be considered during the priority phase of the interference.

11. A motion that each of the Broad's patents were obtained by inequitable conduct. (Motion 11)

The Board DENIED authorization for this motion, stating that it was premature and that the substance of the allegations would "likely be apparent from the priority proofs."

In addition, each party filed a motion for judgment on priority grounds, which the Board DEFERRED until the priority phase of the interference.

In addition to these decisions, the Board also ordered that one of the University's allowed applications be added to the interference and that this application be included in the Broad Institute's motions 2 and 5 (that there is no interference in fact and that certain of the Broad Institute's claims do not correspond to the count, respectively) and the University's motion for substituting the count. Procedurally, the Board did not waive the requirement for a statement of facts to accompany each motion, nor did it extend the page limit for the motions. Both these decisions increase the pressure on the parties to address the complex issues in these motions. Finally, the Board did not extend the schedule for filing motions, responsive motions and oppositions to motions and replies, as well as objections and observations regarding evidence. The complete schedule is as follows:

TIME PERIOD 1 — 22 April 2016

File motions
File (but serve one business day later) priority statements

TIME PERIOD 2 — 13 May 2016

File responsive motions to motions filed in TIME PERIOD 1

TIME PERIOD 3 — 24 June 2016

File oppositions to all motions

TIME PERIOD 4 — 5 August 2016

File all replies

TIME PERIOD 5 — 16 September 2016

File request for oral argument
File motions to exclude evidence
File observations

TIME PERIOD 6 — 7 October 2016

File oppositions to motions to exclude
File response to observations

TIME PERIOD 7 — 21 October 2016

File replies to oppositions to motions to exclude

DEFAULT ORAL ARGUMENT DATE — 17 November 2016

If oral argument ordered

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