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  • Court Report

            By Sherri Oslick —

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

    Teijin Ltd. et al. v. Macleods Pharmaceuticals Ltd. et al.
    1:15-cv-00454; filed June 4, 2015 in the District Court of Delaware

    • Plaintiffs:  Teijin Ltd.; Teijin Pharma Ltd.; Takeda Pharmaceuticals U.S.A., Inc.
    • Defendants:  Macleods Pharmaceuticals Ltd.; Macleods Pharma USA, Inc.

    Infringement of U.S. Patent No. 7,361,676 ("Solid Preparation Containing Single Crystal Form," issued April 22, 2008) following a Paragraph IV certification as part of Macleods' filing of an ANDA to manufacture a generic version of Takeda's Uloric® (febuxostat, used for the chronic management of hyperuricemia in patients with gout).  View the complaint here.

    Takeda Pharmaceutical Co. Ltd. et al. v. Actavis Laboratories FL, Inc. et al.
    1:15-cv-00451; filed June 3, 2015 in the District Court of Delaware

    • Plaintiffs:  Takeda Pharmaceutical Co. Ltd.; Takeda Pharmaceuticals International GmbH; Takeda Pharmaceuticals USA, Inc.; Takeda Pharmaceuticals America, Inc.; Orexigen Therapeutics, Inc.
    • Defendants:  Actavis Laboratories FL, Inc.; Actavis Pharma, Inc.; Andrx Corp.; Actavis, Inc.

    Infringement of U.S. Patent Nos. 7,375,111 ("Compositions for Affecting Weight Loss," issued May 20, 2008), 7,462,626 (same title, issued December 9, 2008), 8,088,786 ("Layered Pharmaceutical Formulations," issued January 3, 2012), 8,318,788 (same title, issued November 27, 2012), 8,722,085 ("Methods for Administering Weight Loss Medications," issued May 13, 2014), 8,815,889 ("Composition and Methods for Increasing Insulin Sensitivity," issued August 26, 2014), and 8,916,195 ("Sustained Release Formulation of Naltrexone," issued December 23, 2014) following a Paragraph IV certification as part of Actavis' filing of an ANDA to manufacture a generic version of Takeda's Contrave® (naltrexone hydrochloride and bupropion hydrochloride, used as an adjunct to a reduced-calorie diet and increased physical activity for chronic weight management in adults with an initial body mass index (BMI) of (1) 30 kg/m2 or greater (obese), or (2) 27 kg/m2 or greater (overweight) in the presence of at least one weight-related comorbidity).  View the complaint here.


    Jazz Pharmaceuticals, Inc. v. Roxane Laboratories, Inc.
    2:15-cv-03684; filed June 1, 2015 in the District Court of New Jersey

    Infringement of U.S. Patent No. 8,952,062 ("Microbiologically Sound and Stable Solutions of Gamma-Hydroxybutyrate Salt for the Treatment of Narcolepsy," issued February 10, 2015) following a Paragraph IV certification as part of Roxane's filing of an ANDA to manufacture a generic version of Jazz's Xyrem® (sodium oxybate, used to treat narcolepsy).  View the complaint here.

  • Conference & CLE Calendar

    CalendarJuly 8-10, 2015 – Fundamentals of Patent Prosecution 2015: A Boot Camp for Claim Drafting & Amendment Writing (Practising Law Institute) – San Francisco, CA

    July 9, 2015 – "Leveraging Post-Grant Patent Proceedings Before the PTAB — Best Practices for Patentees and Third Parties in Inter Partes Review, Post-Grant Review and Covered Business Method Patent Challenges" (Strafford) – 1:00 to 2:30 pm (EDT)

    July 14, 2015 – Patent Quality Chat webinar series – Face-to-face Examiner Interviews: A Demonstration of USPTO Tools – noon to 1:00 pm (EDT)

    July 20-21, 2015 – Patent Cooperation Treaty Seminar (American Intellectual Property Law Association) – San Francisco, CA

    July 23-24, 2015 – Patent Cooperation Treaty Seminar (American Intellectual Property Law Association) – Alexandria, VA

    August 11, 2015 – Patent Quality Chat webinar series – Measuring Patent Quality – noon to 1:00 pm (EDT)

    August 12-14, 2015 – Advanced Patent Law Seminar (Chisum Patent Academy) – Seattle, WA

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

  • AIPLA Patent Cooperation Treaty Seminar

    AIPLA #1The American Intellectual Property Law Association (AIPLA) will be its 19th annual Patent Cooperation Treaty Seminar on July 20-21, 2015 in San Francisco, CA and on July 23-24, 2015 in Alexandria, VA.  The Seminar is designed for practicing attorneys, patent agents, paralegals and administrators who want to learn more about PCT rules, procedures, practices, and strategies.

    For newcomers to the PCT, there will be a one-hour "PCT Primer" webinar from 12:30 to 1:30 pm (EDT) on July 14, 2015.  The webinar, which is free to all PCT Seminar registrants, will provide an overview of the PCT system and the basics of filing a PCT application.

    An online agenda for the seminar can be viewed here.

    The registration fee for the conference is $295 (AIPLA member – Student/Government/Corporate in-house counsel Member), $445 (Non-Member – Government/Corporate in-house counsel), $645 (AIPLA Member), or $945 (Non-Member).  Those interested in registering for the conference can do so here.

  • Federal Circuit Tackles Claim Construction Review under New Standard

    The More Things Change (Lighting Ballast Control LLC v. Philips Electronics North America), the More They Stay the Same (Teva Pharmaceuticals USA, Inc. v. Sandoz Inc.)

    By Andrew Williams —

    On June 18, 2015, the Federal Circuit handed down its second opinion in the Teva Pharmaceuticals USA v. Sandoz Inc. case.  And, much like with the first opinion in 2013, the Court reversed the District Court's holding with regard to claim 1 of U.S. Patent No. 5,800,808 ("the '808 patent") — the only patent still pending.  A split panel decided that, even though the District Court made factual determinations about how one skilled in the art would understand this claim, specifically the claim term "molecular weight," the claim was nevertheless indefinite.  Of course, in the interim, for the same case, the Supreme Court reversed long standing Federal Circuit precedent regarding the level of deference to be afforded a District Court's factual determinations during claim construction.  Or at least it thought it did.  Judge Moore, writing the opinion for the Court, stated that it did not matter if they gave deference to the lower court in this case.  In contrast, on June 23, 2015, the Federal Circuit determined in the Lighting Ballast Control LLC v. Philips Electronics North America remand that the deference to which the District Court's factual determinations were entitled dictated affirmance.

    Teva #2The background of the Teva case has been addressed in previous posts (see "Teva Pharmaceuticals USA, Inc. v. Sandoz, Inc. (Fed. Cir. 2013)")  Basically, this case involves the drug Copaxone®, which was approved for the treatment of multiple sclerosis.  The active ingredient is copolymer-1, or glatiramer acetate, which is a polypeptide product that consists of four different amino acids (alanine, glutamic acid, lysine, and tyrosine).  Copolymer-1, however, is a mixture of individual polymer molecules with different constituent ratios, and different molecular weights.  Therefore, it is often expressed as "average molecular weight."  Statistically speaking, though, there are at least three ways to calculate average molecular weight:  peak average molecular weight (Mp), number average molecular weight (Mn), and weight average molecular weight (Mw).  Mp is the molecular weight of the most abundant molecule in the sample; Mn is the combined total mass of all of the molecules in the sample divided by the total number of molecules; and Mw is similar to number average molecular weight, except instead of dividing the sample by total number of molecules, you take into account the weight fraction of each molecule.

    Teva's specification was silent as to which molecular weight measurement was used, or the appropriate way to measure it.  The only mention was to the use of size exclusion chromatography (SEC), which can be used to obtain all three values.  Moreover, the applicants made statements in related cases that compounded the problem.  First, in the prosecution history of one of the patents, the applicants said that "[o]ne of ordinary skill in the art, upon reviewing the specification, would understand that 'average molecular weight' refers to the molecular weight at the peak of the molecular weight distribution curve," or Mp.  However, in response to an identical rejection in an earlier related application, the patentees said that ""[o]ne of ordinary skill in the art could understand that kilodalton units implies [sic] a weight average molecular weight," or Mw.  Teva's expert explained that one skilled in the art would have understood that average molecular weight could only be Mp because the use of SEC without more would suggest it (because determining Mn and Mw would require additional calculations).  The District Court found this testimony credible.  Moreover, the District Court found that one skilled in the art would have recognized that the statement in the one application file history was false.  In the first Teva v. Sandoz opinion, the Federal Circuit did not credit these findings and held the claims with this claim term to be indefinite.

    On remand from the Supreme Court, the Federal Circuit clarified that the only relevant evidence was intrinsic.  As such, even under the Supreme Court's analysis, whether the claims were indefinite was purely a legal question.  In fact, this is not inconsistent with the original Federal Circuit holding:  "On de novo review of the district court's indefiniteness holding, we conclude that Dr. Grant's testimony does not save Group I claims from indefiniteness."  Just to be clear, the Court acknowledged that it found no error with the District Court's determination of how a skilled artisan would have understood the teaching of the specification ("And we see no clear error in that fact finding — that one of skill in the art could read Mp from a chromatogram without further calculation and that Mw or Mn would both require further calculations.").  This factual finding, however, did not change the fact that there are at least three different types of "average molecular weight" that are calculated three different ways and could give three different values.  In fact, neither party disputed that there was "no express definition" for the claim term, and that the terms Mp, Mw, and Mn were not used in the specification.

    The case, therefore, turned on the "internal coherence and context assessment" test articulated by the Federal Circuit.  In fact, the Court stated that this test was itself a question of law that could not be converted to a factual question by the introduction of expert testimony.  As such, the testimony of Teva's expert did nothing to resolve the ambiguity of which molecular weight measurement to use.

    In addition, when the Federal Circuit first decided the case, it found that the contradictory statements in the prosecution history of related applications rendered the ambiguity of the claim term insoluble.  Of course, in the interim, the Supreme Court rejected the "insolubly ambiguous" standard, and articulated the "reasonable certainty" standard in the Nautilus, Inc. v. Biosig Instruments, Inc. case.  As the Federal Circuit noted, somewhat snarkily, when it decided that case on remand "[t]he Court has accordingly modified the standard by which lower courts examine allegedly ambiguous claims; we may now steer by the bright star of 'reasonable certainty,' rather than the unreliable compass of 'insoluble ambiguity.'"  Therefore, even assuming that a skilled artisan would recognize the scientifically erroneous claim made by the patentees, the specification would still not have informed a person of ordinary skill in the art of the scope of the invention with reasonable certainty.

    Interestingly, the only Judge on the current panel that was on the panel in 2013 was Judge Moore, who wrote the opinion for the Court in both instances.  In the 2013 Teva v. Sandoz case, then-Chief Judge Rader and District Judge Benson of the District of Utah sitting by designation completed the panel.  On remand, these two judges were replaced by Judges Mayer and Wallach.  You probably could not find a member of the Federal Circuit that has been more outspoken against the de novo standard of claim construction review as Judge Mayer.  It seemed almost fitting that he had an opportunity to dissent from this case.

    In dissent, Judge Mayer cited the Supreme Court in Teva: "'[I]n some instances, a factual finding may be close to dispositive of the ultimate legal question of the proper meaning of [a claim] term in the context of [a] patent."  It stood to reason, therefore, that this was "such a case."  Not surprisingly, Judge Mayer criticized the majority for not giving the District Court's "extensive fact-finding" any deference.  In cases with complex technology, he pointed out, it is often necessary to look outside the patent and its prosecution history.  Perhaps in an attempt to trigger another bite at the Supreme Court apple, a disproportionate number of Judge Mayer's citations were to Supreme Court precedent — some dating back to the 1800s.  Judge Mayer was also critical of the citation to the prosecution history — because even though statements made in the prosecution of related applications may be used to interpret claims, the same is not true to find a claim indefinite.  This is even truer when the erroneous or conflicting statements came years after the patent at issue issued.  However, the majority would likely agree with this sentiment — the issue for them was not that the erroneous statements damned the claims, but that a skilled artisan's recognition of this erroneous statement would not have saved the claims.

    The Federal Circuit came to almost the opposite outcome in the remand from Lighting Ballast Control LLC v. Philips Electonics North America.  That case had an even more complicated history.  The District Court had first determined (in part) that the claim term "voltage source means" was governed by 35 U.S.C. § 112, ¶ 6, and was therefore indefinite because the specification did not disclose sufficient structure.  Then it reversed itself when deciding a motion for reconsideration because it did not give sufficient weight to the expert testimony about how those skilled in the art would understand the specification.  The Federal Circuit disagreed and reversed.  This set the stage for the Lighting Ballast en banc decision, in which the Court reaffirmed the de novo standard of review for all claim construction issues.  Of course, this decision was short lived in view of the Supreme Court's Teva decision.

    Lighting Ballast returned to the Federal Circuit after its prior en banc decision was vacated and remanded.  This time, because it could not say that the District Court's factual determinations were clearly erroneous, it affirmed the lower court's determination that the specification provided the requisite structure and that the claims were therefore not indefinite.  Even though the outcome was different than the Teva remand, these cases were distinct enough to support such outcomes.  In this case, the expert testimony was used to explain what the specification meant.  In contrast, the expert testimony in the Teva case was cast as supplementing missing information from the specification — mainly which molecular weight measurement to use.  It therefore didn't matter how a skilled artisan would have interpreted a particular figure or a statement in the prosecution history — the claim term could have been one of three different possibilities and nothing in the intrinsic record resolved that issue.  It will nevertheless be interesting to see how subsequent cases are decided, and whether this decision will stave off the feared use of expert testimony in every claim construction proceeding (see "Teva Pharmaceuticals USA, Inc. v. Sandoz Inc. (2015)").  Somehow, this scenario seems unlikely.

  • G.D. Searle LLC v. Lupin Pharmaceuticals, Inc. (Fed. Cir. 2015)

    By Kevin E. Noonan —

    PfizerOver seven years ago, the Federal Circuit delivered a mixed ruling against Pfizer in litigation against Teva) relating to the pain medication Celebrex® (celocoxib) (where "celocoxib" is 4-[5-(4-methylphenyl)-3-(trifluoromethyl)-1H-pyrazol-1-yl]benzenesulfonamide).  In that case, Pfizer, Inc. v. Teva Pharmaceuticals USA, Inc. (Fed. Cir. 2008), the Court upheld a District Court determination that Teva was liable for infringing a trio of Pfizer patents (U.S. Patent Nos. 5,466,823; 5,563,165; and 5,760,068) but reversed the District Court's determination that the claims of the '068 patent were not invalid for obviousness-type double patenting.  Pfizer took steps to remedy the deficiency of the claims of the '068 patent by reissue, but those efforts were deemed insufficient in a decision handed down today in G.D. Searle LLC v. Lupin Pharmaceuticals Inc. et al.

    This case involved ANDA litigation against five generic defendants (Lupin, Teva Pharmaceuticals USA Inc., Mylan Pharmaceuticals Inc., Watson Laboratories, Inc., Apotex Inc. and Apotex Corp.), again related to generic Celebrex.  The basis for the Court's earlier determination that the '068 patent was invalid for obviousness-type double patenting was that the designation of this patent as a "continuation-in-part" was not merely semantic but had substantive repercussions regarding whether the '068 claims were entitled to the "safe harbor" provisions of 35 U.S.C. § 121.  These provisions entitle a divisional application filed as the result of a restriction requirement (a Patent Office determination that an applicant has filed claims directed to more than one invention) to be exempt from obviousness-type double patenting, and illustrate Congressional intent (from the legislative history of the 1952 Patent Act) to prevent the unfairness of forcing an applicant to be required to file a divisional application based on claiming "independent inventions" through restriction while permitting the original application to be used as "prior art" in a obviousness-type double patenting rejection.  The Federal Circuit considered it also Congress's intent to restrict the safe harbor to divisional applications (which have an identical specification to the originally-filed application) and keep any claims in such a divisional application strictly within the bounds of what had been determined to be a separate invention.  This meant, for example, that an applicant would not be able to include claims in a divisional that were within the scope of any claims previously elected for examination.  In this way applicants would be precluded from inequitably increasing patent term while not being penalized for electing one invention and pursuing additional inventions in divisional applications.

    The lineage of the '068 patent began with U.S. patent application No. 08/160,594 in which the U.S. Patent and Trademark Office imposed a three-way restriction requirement:  to the claimed compounds per se, compositions of said compounds and methods of use for treating inflammation and resulting pain without the side effects of conventional non-steroidal anti-inflammatory compounds.  The compound claims were elected and granted as U.S. Patent No. 5,466,823 and the composition claims pursued in a divisional application (Serial No. 08/457,059) that issued as U.S. Patent No. 5,563,165.  Both the '823 and '165 patents have expired.

    Pfizer did not pursue the method of treatment claims in a divisional application but instead filed a continuation-in-part application that contained additional disclosure (including previously undisclosed compounds) as well as claims to the three classes of inventions that were subject to restriction in the '594 application.  The U.S. application issued as U.S. Patent No. 5,521,207 and is also expired.  However, this application was the priority document for a PCT (International) Application that entered the national phase in the U.S. as Serial No. 08/648,113.  In that application the PTO imposed a unity of invention/restriction requirement along exactly the same lines as in the '594 application, requiring the applicant to choose between claims to the compounds, compositions, and method of treatment claims.  Pfizer chose to pursue the method of treatment claims and these claims ultimately granted in the '068 patent.

    In the earlier litigation, the Federal Circuit found that the claims of the '068 patent did not fall within the safe harbor because it was a continuation-in-part application, not a divisional.  Such a "CIP" application by definition contains some of the disclosure of an earlier-filed application in addition to new disclosure.  Because of this distinction, the Federal Circuit found that CIP applications could not fall within the safe harbor because they could encompass additional information (and patentable inventions) that were not a part of the original, restricted claims.

    After receiving this decision, Pfizer filed reissue application No. 12/205,319 under 35 U.S.C. § 251 seeking to amend the '068 patent to conform to the requirements for a divisional application.  According to the panel decision today, in its reissue declaration "Pfizer asserted that it had erred in prosecuting the application leading up to the '068 patent as a continuation-in-part, rather than as a divisional application, and that the error had resulted in invalidating the relevant claims of the '068 patent for obviousness-type double patenting."  Pfizer filed a preliminary amendment wherein:

    (1) it deleted portions of the '068 patent specification that were not present in the '594 application; (2) it designated the '113 application as a divisional of the '594 application and removed the priority claim to the '629 application; (3) it amended claim 1 to be a method claim using only the compounds originally disclosed in the '594 application; (4) it canceled claims 2-12, which were method claims using compounds that were not present in the '594 application; (5) it canceled claim 18 (reciting a method of preventing colorectal cancer), which was not found in the '594 application; and (6) it added new method claims 19-23, which recited the use of the method disclosed in claim 1 to treat five specific types of inflammation-associated disorders.

    Initially the PTO rejected the reissue application on the grounds that these changes were not the types of error intended to be remedied by reissue; in response Pfizer amended its amendment to assert "various technical errors" that Pfizer contended rendered the claims indefinite, and on that basis the reissue application was permitted to continue.  Pfizer then made the changes in the original version of the application and the application granted as RE44,048.

    The District Court held that these corrections were not correctable under the reissue statute, and that the claims in the '048 reissue patent were not entitled to the safe harbor under 35 U.S.C. § 121 and thus were invalid for obviousness-type double patenting.

    The Federal Circuit affirmed, in an opinion by Judge Bryson joined by Chief Judge Prost and Judge Hughes.  The opinion recognized the question of the propriety of the reissue application under § 251 but was content to limit the decision to the absence of the safe harbor under § 121 for the reissue claims.  The panel expressly rejected Pfizer's argument that the restriction requirement from the '594 application extended to the national phase of the PCT application, despite the similarities in the nature of three classes of claims in each.  The panel reasoned that this cannot be the case because the national phase '113 application contained new matter not contained in the '594 application and thus was properly treated as a continuation-in-part (the earlier case had expressly held that CIPs were not entitled to the safe harbor provisions of § 121).  In this regard the panel rejected the changes in the reissue application, stating that "[s]imply deleting that new matter from the reissue patent does not retroactively alter the nature of the '113 application."

    The opinion also raises the equities (between Pfizer and the public) involved:

    Moreover, when the '113 application issued as the '068 patent in June 1998, Pfizer obtained patent protection for the new matter that was not present in the '594 application.  For years thereafter, the public was not free to practice that new matter (e.g., the now cancelled claims 2-12 and 18 of the '068 patent) because of that patent protection.  Pfizer cannot now identify the '113 application as a divisional of the '594 application (for purposes of section 121) and retroactively relinquish the new matter in the '113 application, after having enjoyed years of patent protection for it.  See In re Harita, 847 F.2d 801, 809 (Fed. Cir. 1988) ("In any given case, the [reissue] statute should be so applied to the facts that justice will be done both to the patentee and the public."); see also In re Serenkin, 479 F.3d 1359, 1362 (Fed. Cir. 2007) ("[Section] 251 is based on fundamental principles of equity and fairness[.]").  Fairness to the public does not permit Pfizer to convert the '113 application into a division of the original '594 application, and thereby take advantage of the safe harbor provision, simply by designating it as a divisional application years after the fact.

    (This rationale also applies to the foreign patents arising from the PCT application, whose status has not changed.)

    The opinion also sets forth as a basis for its decision its determination that the restriction requirement in the '113 application is not the same as the restriction requirement in the '594 application (despite their similarities).  The panel states that the claims in divisional applications must be "derived from the same restriction requirement," citing its earlier opinion regarding this patent family and also Boehringer Ingelheim Int'l GmbH v. Barr Labs., Inc., 592 F.3d 1340, 1354 (Fed. Cir. 2010), stating:

    When separate restriction requirements are imposed on separate applications and the record does not show that any of the various restriction requirements carried forward from one application to the next, the earlier restriction requirement cannot be viewed as having continued in effect with respect to the later-filed application [citing Bristol-Myers Squibb Co. v. Pharmachemie B.V., 361 F.3d 1343, 1349-50 (Fed. Cir. 2004)].

    The record here was that there were two separate restriction requirements asserted in two related but distinct (regarding the disclosure in the specification and the subject matter of the claims) applications, and that these differences precluded the restriction requirement imposed in the '594 application from having "carried over" to the '113 application (and the panel noted there was no evidence that the '113 application examiner referenced or was even aware of the restriction in the '594 application).  And the Court expressly rejected Pfizer's "but for" argument with regard to the requirement imposed in the '594 application (that "but for" that restriction the method of treatment claims would have been prosecuted in the '594 application).

    While this decision is entirely consistent with the Court's earlier Pfizer decision, it does illustrate how stringently the Court has and intends to apply the law of obviousness-type double patenting for pharmaceutical patents.

    G.D. Searle LLC v. Lupin Pharmaceuticals, Inc. (Fed. Cir. 2015)
    Panel:  Chef Judge Prost and Circuit Judges Bryson and Hughes
    Opinion by Circuit Judge Bryson

  • Internet Patents Corp. v. Active Network, Inc. (Fed Cir. 2015)

    By Michael Borella —

    Federal Circuit SealSince late last year, the main theme of many 35 U.S.C. § 101 disputes has been whether claims under review are more like those in Ultramercial Inc. v. Hulu LLC or DDR Holdings, LLC v. Hotels.com.  In the former case, the Federal Circuit held that claiming a disembodied method that merely uses general-purpose technology (i.e., the Internet) fails to meet the requirements of § 101, while in later case the Court stated that claims that are necessarily rooted in computer technology (e.g., one that changes the technology itself rather than just using it) are patent-eligible.  Patentees attempt to draw analogies between their claims and those of DDR, while defendants attempt the same with those of Ultramercial.

    At first blush, this case seems to restrict the scope of the DDR decision, which would be bad news for patentees.  Upon further review, however, the facts of this case are distinguishable from those of DDR.

    Internet Patents Corporation (IPC) filed infringement suits against The General Automobile Insurance Services, Inc., Active Network, Inc., Tree.com, and QuinStreet, Inc., alleging infringement of U.S. Patent No. 7,707,505.  The District Court for the Northern District of California dismissed the complaint on the ground of patent ineligibility under § 101.  IPC appealed.  While the appeal was pending, the Supreme Court decided Alice Corp. v. CLS Bank International, which changed the § 101 analysis.  After supplemental briefing to address Alice, the Federal Circuit panel of Judges Newman, Moore, and Reyna affirmed.

    Claim 1 of the '505 patent recites:

    1. A method of providing an intelligent user interface to an online application comprising the steps of:
        furnishing a plurality of icons on a web page displayed to a user of a web browser, wherein each of said icons is a hyperlink to a dynamically generated online application form set, and wherein said web browser comprises Back and Forward navigation functionalities;
        displaying said dynamically generated online application form set in response to the activation of said hyperlink, wherein said dynamically generated online application form set comprises a state determined by at least one user input; and
        maintaining said state upon the activation of another of said icons, wherein said maintaining allows use of said Back and Forward navigation functionalities without loss of said state.

    In a nutshell, the claimed invention is directed to a web browser that stores state representing what a user has typed into a web-based form, even if that information has not yet been submitted.  Then, if the user navigates away from and back to the web-based form, the stored state is usable in the form.  In this way, the user does not have to retype the information.

    The District Court stated that the '505 patent claimed the abstract idea of "retaining information lost in the navigation of online forms," but failed to include "elements or combination of elements, sometimes referred to as the inventive concept, sufficient to ensure that the patent in practice amounts to significantly more than a patent upon [the abstract idea]."

    On appeal, IPC argued that various limitations, such as "maintaining said state upon the activation of another of said icons, wherein said maintaining allows use of said Back and Forward navigation functionalities without loss of said state" lifted the claim above the level of a mere abstract idea and was a technical advance over the prior art.

    The Court began its analysis with a general discussion of § 101, with particular emphasis on the now familiar Alice test.  Judge Newman, writing for the unanimous Court, noted that "[u]nder step one of Mayo/Alice, the claims are considered in their entirety to ascertain whether their character as a whole is directed to excluded subject matter."  This is a welcome statement, as defendants and the U.S. Patent and Trademark Office often examine claims at a 30,000-foot level when carrying out this step, ignoring claim elements in the process.

    With respect to the second step of Alice, Judge Newman indicated that "[d]etermination of what is an inventive concept favors inquiries analogous to those undertaken for determination of patentable invention . . . a known idea, or one that is routine and conventional, is not inventive in patent terms."  She further wrote that "[o]ther precedent illustrates that pragmatic analysis of §101 is facilitated by considerations analogous to those of §§102 and 103."  Once again, the barrier between patent-eligibility, novelty, and non-obviousness is characterized to resemble Swiss cheese.

    Thus, Judge Newman focused on what the specification of the '505 patent discloses regarding claim elements that were new and those encompassed by the prior art.  Particularly, the '505 patent states that "the end result of 'maintaining the state' is described as the innovation over the prior art, and the essential, 'most important aspect'" thereof.  On the other hand, the '505 patent describes the "browser Back and Forward button functionality" as "conventional," "well-known," and "common."

    In particular, Judge Newman was influenced by the fact that "claim 1 contains no restriction on how the result is accomplished," and "[t]he mechanism for maintaining the state is not described, although this is stated to be the essential innovation."  Thus, in her opinion, "IPC's proposed interpretation of 'maintaining state' describes the effect or result dissociated from any method by which maintaining the state is accomplished upon the activation of an icon."  As a result, the Court ruled the claims to be patent-ineligible.

    Not unlike DDR, which claimed an improvement to a web server that fundamentally changed how the server operated, the claims at issue here describe an improvement to a web browser that changed how the browser operated (though not fundamentally).  However, the DDR patent described its key improvement in great detail, but the '505 patent did not.

    When writing a patent's specification, the draftsperson should focus on the clever parts — aspects of the invention that are new.  In most cases, however, the draftsperson is not fully aware of which features are truly new versus those that are in or suggested by the prior art.  As a result, it is challenging to identify which of these features might be a candidate "inventive concept" and to pontificate thereon accordingly.  The general rule that many of us follow post-Alice is to draft rich, detailed, technical specifications, and undoubtedly we will double-down on that approach in light of this decision.

    Under a more rational regime, IPC's claims might have been found patent-eligible — after all they do improve the operation of a computer and are clearly technical in nature.  But the Alice test allows claims to be judged based on a subjective view thereof — a "gist" of the claim rather than the claim itself.  While such an approach was discarded earlier courts, it appears to have raised its ugly head once more.

    Internet Patents Corp. v. Active Network, Inc. (Fed Cir. 2015)
    Panel:  Circuit Judges Newman, Moore, and Reyna
    Opinion by Circuit Judge Newman

  • Court Report

            By Sherri Oslick —

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

    Mayne Pharma International Pty Ltd. v. Merck & Co., Inc., et al.
    1:15-cv-00438; filed May 29, 2015 in the District Court of Delaware

    • Plaintiff:  Mayne Pharma International Pty Ltd.
    • Defendants:  Merck & Co., Inc.; Merck Sharp & Dohme Corp.; N.V. Organon

    Infringement of U.S. Patent No. 6,881,745 ("Pharmaceutical Compositions for Poorly Soluble Drugs," issued April 18, 2005) based on Merck's manufacture and sale of its Noxafil® (posaconazole, used in the prophylaxis of fungal infections in immunocompromised patients, and in the treatment of oropharyngeal candidiasis).  View the complaint here.

    Novartis Pharmaceuticals Corp. v. Apotex, Inc. et al.
    2:15-cv-03634; filed May 29, 2015 in the District Court of New Jersey

    • Plaintiff:  Novartis Pharmaceuticals Corp.
    • Defendants:  Apotex, Inc; Apotex Corp.

    Infringement of U.S. Patent No. 8,324,189 ("Use of Zolendronate for the Manufacture of a Medicament for the Treatment of Bone Metabolism Diseases," issued December 4, 2012) following a Paragraph IV certification as part of Apotex's filing of an ANDA to manufacture a generic version of Novartis' Zometa® (zoledronic acid, used for the prevention of skeletal-related complications associated with cancer).  View the complaint here.


    Fresenius Kabi USA, LLC v. Fera Pharmaceuticals, LLC
    2:15-cv-03654; filed May 29, 2015 in the District Court of New Jersey

    Fresenius Kabi USA, LLC v. Innopharma Licensing, LLC et al.
    2:15-cv-03655; filed May 29, 2015 in the District Court of New Jersey

    • Plaintiff:  Fresenius Kabi USA, LLC
    • Defendants:  Innopharma Licensing, LLC; Innopharma Licensing, Inc.; Innopharma, LLC; Innopharma, Inc.

    The complaints in these cases are substantially identical.  Infringement of U.S. Patent No. 9,006,689 ("Levothyroxine Formulations," issued on April l4, 2015) following a Paragraph IV certification as part of Fera's filing of an ANDA to manufacture a generic version of Fresenius' Levothyroxine Sodium (levothyroxine sodium for injection, used to treat myxedema coma).  View the Fera complaint here.

    Mylan Pharmaceuticals Inc. v. Janssen Pharmaceuticals, Inc.
    2:15-cv-02990; filed May 29, 2015 in the Eastern District of Pennsylvania

    Declaratory judgment of invalidity and non-infringement of U.S. Patent No. 8,629,179 ("Methods and Devices for Providing Prolonged Drug Therapy," issued January 14, 2014) in conjunction with Mylan's filing of an ANDA to manufacture a generic version of Alza's Concerta® (methylphenidate hydrochloride, used to treat attention deficit hyperactivity disorder).  View the Delaware complaint here.  View the complaint here.

    Forest Laboratories LLC et al. v. Amneal Pharmaceuticals LLC et al.
    1:15-cv-00430; filed May 28, 2015 in the District Court of Delaware

    • Plaintiffs:  Forest Laboratories LLC; Forest Laboratories Holdings Ltd.
    • Defendants:  Amneal Pharmaceuticals LLC; Amneal Pharmaceuticals of New York LLC; Amneal Pharmaceuticals Co. India Pvt. Ltd.

    Infringement of U.S. Patent No. 5,763,476 ("Sublingual or Buccal Pharmaceutical Composition," issued June 9, 1998) following a Paragraph IV certification as part of Amneal's filing of an ANDA to manufacture a generic version of Forest's Saphris® (asenapine maleate, sublingual, used to treat schizophrenia and manic or mixed episodes associated with bipolar I disorder).  View the complaint here.

    Warner Chilcott Co., LLC v. Amneal Pharmaceuticals LLC
    3:15-cv-03590; filed May 28, 2015 in the District Court of New Jersey

    Infringement of U.S. Patent No. 6,667,050 ("Chewable Oral Contraceptive," issued December 23, 2003) following a Paragraph IV certification as part of Amneal's filing of an ANDA to manufacture a generic version of Warner Chilcott's Minastrin® 24 Fe (ethinyl estradiol and norethindrone acetate, used for oral contraception).  View the complaint here.

  • Ariosa Diagnostics, Inc. v. Sequenom, Inc. (Fed. Cir. 2015)

    By Kevin E. Noonan —

    Ariosa DiagnosticsDisaster survivors, and even people who just hear about a disaster, are often first overwhelmed by it; they can only rationally process its significance after some time.  During that time they overcome the initial visceral reaction and contemplate the effects the disaster will have on the future (and sometimes, develop remedies to avoid similar disasters in future).  Such is a reasonable reaction to the Federal Circuit's decision on June 12th in the Ariosa v. Sequenom case.

    To recap, the technology at issue is non-invasive prenatal diagnosis of sex determination, blood typing, other genetic disorders (including Downs Syndrome) and detection of pre-eclampsia, using a simple blood test that reduces or eliminates the need for amniocentesis and chorionic villus sampling (which incur risks to both mother and child).  Sequenom Inc. is the exclusive licensee of U.S. Patent No. 6,258,540 originally obtained by Isis Inc.; three independent claims were attacked by Ariosa in a declaratory judgment action and asserted by Sequenom in its patent infringement counterclaims:

    1.  A method for detecting a paternally inherited nucleic acid of fetal origin performed on a maternal serum or plasma sample from a pregnant female, which method comprises
        amplifying a paternally inherited nucleic acid from the serum or plasma sample and
        detecting the presence of a paternally inherited nucleic acid of fetal origin in the sample.

    24.  A method for detecting a paternally inherited nucleic acid on a maternal blood sample, which method comprises:
        removing all or substantially all nucleated and anucleated cell populations from the blood sample,
        amplifying a paternally inherited nucleic acid from the remaining fluid and subjecting the amplified nucleic acid to a test for the Paternally [sic] inherited fetal nucleic acid.

    25.  A method for performing a prenatal diagnosis on a maternal blood sample, which method comprises
        obtaining a non-cellular fraction of the blood sample
        amplifying a paternally inherited nucleic acid from the non-cellular fraction and
        performing nucleic acid analysis on the amplified nucleic acid to detect paternally inherited fetal nucleic acid.

    Ariosa (and co-declaratory judgment plaintiffs Natera Inc. and Diagnostic Center, Inc.) filed a declaratory judgment action against Sequenom on these claims, and the District Court denied Sequenom's motion for preliminary injunction (in July 2012), based on a substantial question of invalidity under Section 101 (this was before the Supreme Court's Myriad decision, and under prevailing Federal Circuit law where both genomic and cDNA was patent eligible).  The Federal Circuit then vacated the District Court's denial of Sequenom's preliminary injunction motion for reconsideration under the Myriad decision.

    SequenomOn remand, the District Court granted Ariosa's summary judgment motion for invalidity on the grounds that the claims were patent ineligible (and denied Sequenom's cross-motion for summary judgment of infringement).  Ariosa's argument was simple:  the claims at issue did not "add enough" to a natural phenomenon (the existence of paternally derived cell-free fetal DNA in maternal blood) to render the claims patent eligible.  Because the additional limitations "either apply well-understood, routine, and conventional activity to the natural phenomenon or limit the natural phenomenon to specific types of the natural phenomenon, which are also unpatentable" the claims do not recited patent eligible subject matter according to Ariosa.

    The District Court agreed, providing as its analysis that cffDNA was a natural product that was itself patent ineligible, and that amplifying and detecting DNA from plasma or serum was well known at the time the invention was made, based on "evidence" in the specification.  (This interpretation seems to be a misreading of the specification, which states that amplification was achieved using standard techniques, not that amplifying DNA from plasma or serum was itself a standard technique.)  The prosecution history was cited for the same point with regard to methods for detecting cffDNA, and Sequenom's expert "acknowledged that others before the inventors had amplified and detected nucleic acid in plasma or serum."  The District Court based its decision on a combination of the AMP v. Myriad and Parker v. Flook decisions, concluding that to be patent eligible, Sequenom needed to invent novel ways of detecting cffDNA ("[s]imilarly, had the inventors of the '540 patent created an innovative method of performing DNA detection while searching for paternally inherited cffDNA, such as a new method of amplification or fractionation, those claims would be patentable"), based on dicta from the Myriad case.

    Taking its turn, the Federal Circuit first provided its understanding of the proceedings below, in an opinion by Judge Reyna joined by Judge Wallach with Judge Linn concurring.  According to the opinion, the Court appreciated that the inventors had found cell-free fetal DNA (cffDNA) in maternal plasma or serum "that other researchers had previously discarded as medical waste" (emphasis added).  Foreshadowing their reasoning, the panel then state that "[a]pplying a combination of known laboratory techniques to their discovery, Drs. Lo and Wainscoat implemented a method for detecting the small fraction of paternally inherited cffDNA in maternal plasma or serum to determine fetal characteristics, such as gender" (by which the opinion avoids the more significant uses such as detecting Downs syndrome and other fetal genetic defects).  And more foreshadowing occurs when they characterize the development of this test as being a "discovery."

    The opinion then acknowledges through the parties that the claims are not directed to cffDNA per se or paternally inherited species thereof.  In language that parallels Justice Thomas's language in Section III of his Myriad opinion, the opinion states that the '540 patent claims methods of using cffDNA and then sets forth the panel's understanding of the technical basis for the claimed methods and the procedural particulars of the case below.

    The panel's analysis is best understood using the Court's own language, to better appreciate the basis for this decision:

    In Mayo Collaborative Services v. Prometheus Laboratories, Inc., 566 U.S. ___, 132 S. Ct. 1289 (2012), the Supreme Court set forth a framework for distinguishing patents that claim laws of nature, natural phenomena, and abstract ideas from those that claim patent-eligible applications of those concepts.  First, we determine whether the claims at issue are directed to a patent-ineligible concept.  Id. at 1297.  If the answer is yes, then we next consider the elements of each claim both individually and "as an ordered combination" to determine whether additional elements "transform the nature of the claim" into a patent-eligible application.  Id. at 1298.  The Supreme Court has described the second step of this analysis as a search for an "inventive concept" — i.e., an element or combination of elements that is "sufficient to ensure that the patent in practice amounts to significantly more than a patent upon the [ineligible concept] itself."  Id. at 1294; see also Digitech Image Techs., LLC v. Elecs. For Imaging, Inc., 758 F.3d 1344, 1351 (Fed. Cir. 2014) ("Without additional limitations, a process that employs mathematical algorithms to manipulate existing information to generate additional information is not patent eligible.").

    Applying this understanding of the Supreme Court's teachings regarding diagnostic claims, the opinion states:

    It is undisputed that the existence of cffDNA in maternal blood is a natural phenomenon.  Sequenom does not contend that Drs. Lo and Wainscoat created or altered any of the genetic information encoded in the cffDNA, and it is undisputed that the location of the nucleic acids existed in nature before Drs. Lo and Wainscoat found them.  The method ends with paternally inherited cffDNA, which is also a natural phenomenon.  The method therefore begins and ends with a natural phenomenon.  Thus, the claims are directed to matter that is naturally occurring.

    Of course, what the claimed methods end with are amplified cffDNA and the diagnostic information that is discerned (but not claimed) using the method.

    The opinion then takes isolated statements from the specification to support this conclusion (again, stating that cffDNA was "routinely" discarded) and that the inventors surprisingly found that detecting cffDNA could be used to render clinical diagnoses of fetal abnormalities non-invasively.

    Of course, it is but a short analytical leap to find that the detection methods were simply "routine, conventional and well-understood" because the panel does not consider the claim as a whole but has broken its analysis into pieces (contrary to Supreme Court's Diamond v. Diehr decision).  Accordingly, the panel determines that there is no "inventive concept" in the claims (bizarrely, relying as did the District Court on Parker v. Flook).  (The applicability of that decision on life science inventions should have been firmly put to bed in Judge Rich's In re Bergy decision.)  The next portion of the opinion nicely sets out the logical and legal flaws in the panel's decision:

    Like the patentee in Mayo, Sequenom contends that the claimed methods are patent eligible applications of a natural phenomenon, specifically a method for detecting paternally inherited cffDNA.  Using methods like PCR to amplify and detect cffDNA was well-understood, routine, and conventional activity in 1997.  The method at issue here amounts to a general instruction to doctors to apply routine, conventional techniques when seeking to detect cffDNA.  Because the method steps were well-understood, conventional and routine, the method of detecting paternally inherited cffDNA is not new and useful.  The only subject matter new and useful as of the date of the application was the discovery of the presence of cffDNA in maternal plasma or serum.

    Unlike the patentee in Mayo, the inventors of the claimed invention here did something not done before their invention (detecting cffDNA in maternal blood).  In contrast, every step in the methods claimed in Mayo had been performed in the prior art; the only inventive aspect in those claims was the therapeutic ratio, which the Court found to be a "natural law."  Accordingly, the Mayo claims did nothing more than recite the natural law.  That is not the case here.  Tragically, the remainder of this portion of the opinion recites the tedious evidence from the specification regarding known amplification and detection methods while ignoring that these methods had never been used to detect cffDNA in maternal blood.

    The opinion then visits preemption (sadly, the Circuit Court responsible for interpreting patent law does not correctly state the standard, i.e., undue preemption; after all, all claims are preemptive in nature).  Fortunately, the panel does not follow the District Court through the looking glass of requiring for patent eligibility that every newly claimed method to recite not only a new method but that there be commercially viable, non-infringing alternatives available at the time an application is filed.  Instead, the Court considers the preemption question moot once claims have been determined to be patent ineligible.

    Finally, the Court insulates itself from the negative consequences its decision has on innovation by citing language (dicta) in Myriad that "[g]roundbreaking, innovative, or even brilliant discovery does not by itself satisfy the § 101 inquiry," illustrated by the interpretation that "[t]he discovery of the BRCA1 and BRCA2 genes was a significant contribution to the medical field, but it was not patentable" (ignoring the fact acknowledged twelve pages prior in the opinion that the inventors were not claiming cffDNA).

    Judge Linn's concurring opinion (which in a rational world would be a dissent) joins "only because [he is] bound by the sweeping language of the test set out in Mayo Collaborative Services v. Prometheus Laboratories, Inc.  And he recognizes the consequences:  "[t]his case represents the consequence — perhaps unintended — of that broad language in excluding a meritorious invention from the patent protection it deserves and should have been entitled to retain."  His soi-disant concurrence then sets out four ways to distinguish the case at bar from Mayo (although he does not avail himself of any of these grounds as a basis to dissent).  He states:

    The Supreme Court's blanket dismissal of conventional post-solution steps leaves no room to distinguish Mayo from this case, even though here no one was amplifying and detecting paternally-inherited cffDNA using the plasma or serum of pregnant mothers.  Indeed, the maternal plasma used to be "routinely discarded," '540 patent col.1 ll.50–53, because, as Dr. Evans testified, "nobody thought that fetal cell-free DNA would be present."

    (Perhaps one basis for courts' seeming difficulty in applying Diehr properly is reliance on phrases like "conventional post-solution activity" from Flook; while this may make sense in claims to an alarm limit it is difficult to see how the methods steps recited in Sequenom's claims are properly characterized as such.  Cf, In re Bergy).  He then recites a list of what can only be considered to be secondary considerations (taking the Supreme Court's lead, incorporating concepts of obviousness into the patent-eligibility analysis) to establish how "groundbreaking" the claimed methods were.  And he states:

    Unlike in Mayo, the '540 patent claims a new method that should be patent eligible.  While the instructions in the claims at issue in Mayo had been widely used by doctors — they had been measuring metabolites and recalculating dosages based on toxicity/inefficacy limits for years — here, the amplification and detection of cffDNA had never before been done.  The new use of the previously discarded maternal plasma to achieve such an advantageous result is deserving of patent protection.

    Ironically, he relies upon Rebecca S. Eisenberg, Prometheus Rebound: Diagnostics, Nature, and Mathematical Algorithms, 122 Yale L.J. Online 341, 343–44 (2013) in support of these statements.

    Judge Linn hoists the panel's decision on the petard of superior Supreme Court precedent:

    In short, Sequenom's invention is nothing like the invention at issue in Mayo.  Sequenom "effectuate[d] a practical result and benefit not previously attained," so its patent would traditionally have been valid.  Le Roy v. Tatham, 63 U.S. 132, 135–36 (1859) (quoting Househill Coal & Iron Co. v. Neilson, Webster's Patent Case 673, 683 (House of Lords 1843)); Le Roy v. Tatham, 55 U.S. 156, 175 (1852) (same); see generally Jeffrey A. Lefstin, Inventive Application: a History, 67 Fla. L. Rev. (forthcoming 2015), available at http://ssrn.com/abstract=2398696 (last visited June 10, 2015) (analyzing traditional notions of patent eligibility of newly discovered laws of nature).

    But while he says he sees no reason "in policy or statute" why these claims are not patent eligible, he believes he is bound by "the sweeping language in the Supreme Court's Mayo opinion" to concur.

    It is clear that the Federal Circuit (or at least the members of this panel) believe that they are operating under a mandate from the Supreme Court regarding patent eligibility.  On the contrary, the Court itself has on many occasions made it clear that they view their role (in patent law and otherwise) as setting forth the broad contours of the law that they expect the inferior courts to use to develop the law properly.  In view of the lack of clarity in the Mayo opinion, a third year law student could distinguish this case from that one in arriving at the correct conclusion of patent eligibility.  Nothing more than Supreme Court precedent itself (specifically, the Diamond v. Diehr decision which the Court did not overturn in Mayo) is needed for the task.  The issue is not a lack of analytical and doctrinal tools but the will to employ them, which these members of the Federal Circuit do not seem to have had in rendering this decision.  But shielding the Court from the consequences of their bad decisions does them a disservice.  If the Court intended to exclude from patent eligibility all genetic (nay all types of) diagnostic methods, the Federal Circuit owes it to the Court to give them the opportunity to say so clearly and reap the political consequences.

    Sequenom must now contemplate whether to seek en banc review (which is unlikely given the current composition of the Court, and equally fraught with risk for that same reason) or to petition for certiorari.  It is likely that the only way the Court will recognize the significance of this decision will be if that petition is widely and broadly supported by amici from industry, academia and the public through those patient groups who understand that failing to patent such tests today will lead inexorably to a future where all testing is proprietary and testing costs never decrease.  This is surely not what the Court had in mind when deciding Mayo; they deserve the opportunity to clarify the boundaries of patent eligibility with more care.

    Ariosa Diagnostics, Inc. v. Sequenom, Inc. (Fed. Cir. 2015)
    Panel: Circuit Judges Reyna, Linn, and Wallach
    Opinion by Circuit Judge Reyna; concurring opinion by Circuit Judge Linn

  • Akamai Technologies, Inc. v. Limelight Networks, Inc. (Fed. Cir. 2015)

    By Diego F. Freire and Michael Borella —

    1.  Background

    AkamaiIn 2006, Akamai Technologies ("Akamai") sued Limelight Networks, Inc. ("Limelight") in the U.S. District Court for the District of Massachusetts, alleging infringement of U.S. Patent No. 6,108,703.  The '703 patent is assigned to the Massachusetts Institute of Technology ("MIT") and is exclusively licensed to Akamai.

    Claim 34 of the '703 patent recites:

    A content delivery method, comprising:
        distributing a set of page objects across a network of content servers managed by a domain other than a content provider domain, wherein the network of content servers are organized into a set of regions;
        for a given page normally served from the content provider domain, tagging at least some of the embedded objects of the page so that requests for the objects resolve to the domain instead of the content provider domain;
        in response to a client request for an embedded object of the pagel;
        resolving the client request as a function of a location of the client machine making the request and current Internet traffic conditions to identify a given region; and
        returning to the client an IP address of a given one of the content servers within the given region that is likely to host the embedded object and that is not overloaded. [Emphasis added.]

    The claimed invention is directed to delivering electronic data using a content delivery network (CDN).  It purports to facilitate faster delivery of the data by separating the content of a website onto multiple servers.  The content that requires greater network capacity (such as photos and videos) can be assigned to servers ("tagged") that provide this content at faster speeds.  The remaining content can be provided by non-specialized servers.

    Limelight NetworksLimelight operates a CDN, and content providers are its customers.  Limelight carries out three of the four claimed steps (the distributing, resolving, and returning), but did not tag components of its customers' websites — instead, Limelight contractually required its customers to do their own tagging, if those customers wanted to exploit the faster servers.  The relevant language of the contract stated "Customer [i.e., content provider] shall be responsible for identifying via the then current [Limelight] process all [URLs] of the Customer Content to enable such Customer Content to be delivered by [Limelight]," and "Customer shall provide [Limelight] with all cooperation and information necessary for [Limelight] to implement the [Content Delivery Service]."

    At trial, the jury found that Limelight and its customers jointly and directly infringed '703 patent under 35 U.S.C. § 271(a), and awarded $40 million in damages.  Following this verdict, the Federal Circuit decided Muniauction, Inc. v. Thomson Corp.  In Muniauction, the Court held that direct infringement of a claimed method requires that a single entity perform every step of the claim (the "single entity rule").  But, this requirement is satisfied if steps are performed by multiple parties provided that a single defendant exercises "control or direction" over entire process.  Thus, neither party is liable for infringement if they perform all of the steps, but merely engage in an arms-length relationship to do so.

    Limelight moved for judgment of non-infringement as a matter of law (JMOL) in view of Muniauction, and the District Court granted the motion, holding that because (i) no single entity performed all of the claimed steps, and (ii) the contractual relationship between Limelight and its customers did not rise to the level of "control or direction" there was no liability.  On appeal, a Federal Circuit panel affirmed, but the en banc Court heard the case, reversed, and remanded the case for further proceedings.  Particularly, the en banc majority reasoned that Limelight and its customers did not directly infringe, but "the evidence could support a judgment in its favor on a theory of induced infringement [under 35 U.S.C. § 271(b)]" because "inducement does not require that the induced party be an agent of the inducer or be acting under the inducer's direction or control."  The Court, however, also stated that "there can be no indirect infringement without direct infringement."

    In a June 2014 appeal, the Supreme Court took issue with this apparent contradiction, and held that a defendant is not liable for inducing infringement under 35 U.S.C. § 271(b) when no one party has directly infringed the patent under § 271(a) (see "Limelight Networks, Inc. v. Akamai Technologies, Inc. (2014)").  Thus, the high court reversed the Federal Circuit finding that Limelight had infringed the '703 patent.  On remand, the Federal Circuit considered whether Limelight has infringed under § 271(a).  Judge Linn authored the opinion of the court, and was joined by Chief Judge Prost.  Judge Moore dissented.

    2.  The Outcome

    Ultimately, the majority ruled that "because Limelight . . . did not perform all of the steps of the asserted method claims . . . and because the record contains no basis on which to impose liability on Limelight for the actions of its customers who carried out the other steps, Limelight has not directly infringed the '703 patent under § 271(a)."  The majority confirmed that "direct infringement liability of a method claim under 35 U.S.C. § 271(a) exists when all of the steps of the claim are performed by or attributed to a single entity — as would be the case, for example, in a  principal-agent relationship, in a contractual arrangement, or in a joint enterprise."  Here, there was no liability "[b]ecause this case involves neither agency nor contract nor joint enterprise."

    In dissent, Judge Moore disagreed.  She believes that "§ 271(a) includes joint tortfeasor liability."  Characterizing the majority's rule as creating "a gaping hole in what for centuries has been recognized as an actionable form of infringement," she opined that the single entity rule "is a recent judicial creation inconsistent with statute, common law, and common sense."

    Instead, the majority found that "[e]ncouraging or instructing others to perform an act is not the same as performing the act oneself and does not result in direct infringement [as] § 271 has separate subsections addressing induced and contributory infringement."  In coming to this conclusion, the majority relied heavily on the structure of § 271, noting that "[w]hen a party participates in or encourages infringement but does not directly infringe a patent, the normal recourse under the law is for the court to apply the standards for liability under indirect infringement."  But, "indirect infringement requires, as a predicate, a finding that some party is directly liable for the entire act of direct infringement."

    Akamai attempted to argue that "an accused infringer 'directs or controls' a third party if the accused infringer goes beyond loosely providing instructions and specifically tells a third party the step or steps to perform."  The majority disagreed based on the organization and legislative history of the statute.  Notably, "§ 271(a) includes only the principles of vicarious liability, as embodied in the single entity rule."  Despite being presented with "numerous conflicting theories of joint liability that existed in the common law prior to 1952, Congress enacted specific rules for inducement and contributory liability in § 271(b) and (c), respectively."  The majority also explained its disagreement with the dissent's argument — "[w]hile the dissent believes this leaves a 'gaping hole,' it is not our position to legislate or contravene Congress' choice — right or wrong — by importing other theories of joint liability into § 271(a)."  Particularly, "the dissent advocates holding a customer jointly and severally liable for patent infringement based on its performance of a single step of a claimed method, even when it has no knowledge of the patent."

    3.  The Majority's Reasoning

    The majority carried out its substantive analysis of the case in three steps.  First, in reviewing the statutory scheme of § 271, the majority pointed out that patent infringement is not a creation of common law but a tort defined by statute.  While § 271(a) is "a declaration of what constitutes infringement," subsections (b) and (c) codify the doctrines of inducement and contributory infringement respectively.  The Court states that "in this way, Congress carefully crafted subsection (b) and (c) to expressly define the only ways in which individuals not completing an infringing act under § 271(a) could nevertheless be liable."  And "[t]he fact that Congress chose to impose some forms of secondary liability, but not others, indicates a deliberate congressional choice with which the courts should not interfere."

    The majority then addressed the dissent's argument (which was also promulgated by Akamai) that the word "whoever" in § 271(a) is plural and therefore undermines the single entity rule.  In the majority's view, despite "whoever" being plural, more than one entity can be independently liable for direct patent infringement if each entity practices every step of the claim.  Furthermore, interpreting § 271(a) to include actors who do not independently infringe would make § 271(b) and (c) redundant.  In the majority's view, such a construction contravenes the canon against surplusage in statutes.

    Second, the majority analyzed divided infringement case law, which is rooted in traditional principles of vicarious liability.  This case law sets forth the single entity rule and that "multiple actors could together infringe a patent only if one controlled the other(s)."  Particularly, "when a contract mandates the performance of all steps of a claimed method, each party to the contract is responsible for the method steps for which it bargained . . . [h]owever, this type of contractual arrangement will typically not be present in an arms-length seller-customer relationship."  Still, "the concerns over a party avoiding infringement by arms-length cooperation can usually be offset by proper claim drafting [because] a patentee can usually structure a claim to capture infringement by a single entity."

    Third, the majority found errors in the notion of importing joint tortfeasor liability into § 271(a).  It acknowledged that "liability exists under traditional principles of vicarious liability, such as where a mastermind directs or controls another to perform all steps of a claimed method."  But, the majority indicated that the dissent departed from the common law limits on joint tortfeasor liability in order to import this law into § 271(a).  Particularly, "actors whose innocent actions coordinate to cause harm generally are not subject to liability at common law," but would be under the dissent's interpretation.  Further, the common law "requires both parties to know the others' actions to act in concert" such that liability is found.  Thus, "when parties act independently for their own benefit, such as in arms-length seller-customer relationships," the necessary concerted action between the parties is missing.  Additionally, for liability under § 271(a), the dissent would require the parties to know that their joint conduct would cause damage.  This is inconsistent with the statute and the Supreme Court's precedent that "a direct infringer's knowledge or intent is irrelevant."

    The majority further indicated that the dissent's reasoning would lead to unexpected results.  In one scenario, "a customer who performs a single step of a patented method by merely using a product as intended would . . . liable for direct infringement."  Doing so would fill the "gaping hole" left open by divided infringement, but open a much larger door where innocent customers would be liable for patent infringement for their simple actions.

    Lastly, the majority pointed out that the dissent's position would conflict with the long established rule that "a dependent claim cannot be infringed unless the independent claim from which it depends is also infringed."  Applying this logic a hypothetical set of claims in which an independent claim recites a replicating step and a dependent claim adds a tagging step, "the dissent's rule . . . would result in a party that performs the tagging step but not the replicating step being liable for infringing [the dependent claim] while not being liable for infringing the broader claim from which it depends."

    The majority concluded by pointing out that "Limelight's customers decide what content, if any, they choose to have delivered by Limelight's CDN and only then perform the [tagging step]."  This "form contract does not obligate Limelight's customers to perform any of the method steps."  Based on this interpretation, it was not established that "Limelight's customers were acting as agents of or otherwise contractually obligated to Limelight or that they were acting in a joint enterprise."

    4.  Conclusion

    As the law regarding divided infringement currently stands, it is possible to use a contract between a company and its customer to avoid infringement of a patented method when those parties split carrying out the patented steps.  The fact pattern of this case provides a recipe for doing so.  As a result, it is more critical than ever that claim drafters focus method claims so that their steps are likely to be carried out by a single entity.  For example, Claim 34 of the '703 patent could be written as "for a given page normally served from the content provider domain, obtaining a tagged representation of at least some of the embedded objects of the page . . . ."

    Still, this case may not be at an end.  The dissent's final argument was that an en banc action is required to do what the majority proposes, as it is at odds with binding precedent from a previous panel.  On June 12th, Akamai requested such an en banc review.

    Akamai Technologies, Inc. v. Limelight Networks, Inc. (Fed. Cir. 2015)
    Panel: Chief Judge Prost and Circuit Judges Linn and Moore
    Opinion for the court by Circuit Judge Linn; dissenting opinion by Circuit Judge Moore

  • Conference & CLE Calendar

    CalendarJune 23, 2015 – "Practical Patent Prosecution Strategies and Considerations" (American Bar Association (ABA) Center for Professional Development, Section of Intellectual Property Law, and Young Lawyers Division) – 1:00 to 2:30 pm (ET)

    June 23, 2015 – "Key Developments in Biosimilar Litigation, Part II" (Momentum) – 1:00 to 1:45 pm (Eastern)

    June 25, 2015 – "International Patent Filing: Best Practices" (Intellectual Property Owners Association) – 2:00 to 3:15 pm (ET)

    June 25, 2015 – "Patent Inventorship: Best Practices for Determination and Correction" (Strafford) – 1:00 to 2:30 pm (EDT)

    June 26, 2015 – "101 Post Alice: How USPTO & Practitioners Are Reacting" (Intellectual Property Law Association of Chicago and IIT Chicago-Kent College of Law) – 2:00 to 3:30 pm (Central) at IIT Chicago-Kent College of Law

    July 8-10, 2015 – Fundamentals of Patent Prosecution 2015: A Boot Camp for Claim Drafting & Amendment Writing (Practising Law Institute) – San Francisco, CA

    July 9, 2015 – "Leveraging Post-Grant Patent Proceedings Before the PTAB — Best Practices for Patentees and Third Parties in Inter Partes Review, Post-Grant Review and Covered Business Method Patent Challenges" (Strafford) – 1:00 to 2:30 pm (EDT)

    July 14, 2015 – Patent Quality Chat webinar series – Face-to-face Examiner Interviews: A Demonstration of USPTO Tools – noon to 1:00 pm (EDT)

    August 11, 2015 – Patent Quality Chat webinar series – Measuring Patent Quality – noon to 1:00 pm (EDT)

    August 12-14, 2015 – Advanced Patent Law Seminar (Chisum Patent Academy) – Seattle, WA

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