by Dennis Crouch

E.I. DuPont de Nemours & Co. v. Unifrax I LLC (Fed. Cir. 2019)

In 2014, DuPont sued Unifrax for infringing its patented flame-barrier that is both lightweight and thin. U.S. Patent 8,607,926 (“Composite Flame Barrier Laminate for a Thermal and Acoustic Insulation Blanket”). The jury sided with DuPont — finding the asserted claims infringed and not proven invalid.  Over a dissent from Judge O’Malley, the Federal Circuit has affirmed — finding that substantial evidence supports the verdict. (Majority authored by Judge Reyna and joined by Judge Hughes).

When 90% counts as 100%: A key issue on appeal was the meaning of the claim term “100%.”  DuPont’s claims required an “inorganic refractory layer” made of “platelets in an amount of 100% by weight.”  That particular limitation was added during prosecution to get around a prior art reference that taught a platelet concentration of less than 100%.

The accused product layer approximates 100% platelets, but has some small amount of residual dispersant that didn’t fully evaporate.  Prior to trial, the district court sided with DuPont on claim construction and ruled that “100%” be interpreted as allowing for “some residual dispersant.” This substantially foreclosed Unifrax’s non-infringement argument that it had hoped to take to the jury.

On appeal, the Federal Circuit affirmed — finding a more-relaxed construction of 100% was correct because of how the mathematical construct was used in the patent document itself.  The key phrase from the specification is as follows:

The refractory layer comprises platelets. Preferably at least 85% of the layer comprises platelets, more preferably at least 90% and most preferably at least 95%. In some embodiments, platelets comprise 100% of the layer. The refractory layer may comprise some residual dispersant arising from incomplete drying of the platelet dispersion during manufacture.

According to the court, the final sentence of this paragraph — allowing for residual dispersant in the layer — applies to all of the embodiments, including the 100% layer.  Thus, when the patent says “100%” platelets, it really meant almost-all platelets with potentially a bit of dispersant.  According to the majority the defendant is wrong that “‘100%’ means one hundred percent.”

Writing in dissent, Judge O’Malley argued that the majority’s construction “ignores the plain meaning of ‘100%’ and introduces more ambiguity than it resolves.”

There is no ambiguity in this language. The “platelets” must be present in the refractory layer “in an amount of 100% by weight.” The “100% by weight” language, coupled with the requirement that the platelets exist in an “inorganic refractory layer,” clearly contemplates that the platelets—i.e., inorganic material—constitute the entirety of the refractory layer. That leaves no room for other organic additives. There is perhaps no clearer or simpler way the patentee could have conveyed such a requirement.

Dissent.

The claim language is actually quite mess in the same clause it indicates that the refractory layer comprises “platelets in an amount of 100% by weight” but may also have a moisture content of up to 10% by weight.  110% by weight concentration is not ordinarily allowed in physics. However, we do sometimes talk about “110% effort” and Cecil Quillin has reported a USPTO’s patent grant rate as greater than 100% (by comparing original filings to all patents issued in the resulting family).

I pulled up the prosecution history and found that the 100% and 10% elements were added at the same time in the same amendment with the statement that the claim now “requires a refractory layer containing 100% platelets (and also requires  . . . a defined residual moisture content).”  In my mind, this works strongly in the patentee’s favor — that the 100% allows for residual moisture. Still, it is unfortunate that the ultimate holding is a rejection of the defendant’s argument that “‘100%’ means one hundred percent.”

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Product on sale before the patent filing. A unique aspect of this lawsuit is that the accused products were already on sale before DuPont filed its patent application.

Unifrax’s product was on-sale by May 2011; DuPont filed its application in December 2011.  To be clear, DuPont’s patent does claim priority to prior applications, but only as a continuation-in-part.  The prior applications apparently do not sufficiently disclose the invention at-issue here.

For DuPont, the fact that its patent was filed prior to the AIA saved its bacon.  On appeal, the Federal Circuit agreed that DuPont had presented substantial evidence to antedate Unifrax’s prior use/sale.

The critical point of law focused on proof of the prior invention.  The courts have long been suspicious of inventor’s self-serving testimony regarding prior inventorship.  Here, the duPont provided inventor testimony along with substantial documentation of the prior invention timing.  However, the company did not provide o corroborating evidence as to one particular limitation in the claims — a requirement that the refractive layer have a “dry areal weight of 15 to 50 gsm.”

On appeal, the Federal Circuit sided with duPont — reflecting on the requirement for corroboration.

[O]ur case law does not require that evidence have a source independent of the inventors on every aspect of conception and reduction to practice. . . Here, the law requires only that the corroborative evidence, including circumstantial evidence, support the credibility of the inventors’ story.

The reason for corroboration is a concern that inventors will commit perjury. Thus, the role of corroboration is help ensure inventor credibility.

by Dennis Crouch

Gilbert P. Hyatt v. Andrei Iancu (Supreme Court 2019)

The following is a fairly typical pattern within the USPTO:

• After final rejection, applicant files a PTAB appeal notice and brief;
• Rather than pursue its side of the appeal, the Examiner withdraws the pending rejections — and then re-opens prosecution with a new set of rejections.

Although few cases go through this more than one cycle.  Gilbert Hyatt has long been an exception — both in terms of how he treats the PTO and how he is treated by the PTO.

Going back to the my typical pattern above — note that the Manual of Patent Examination Policy (MPEP) expressly permits cycling by the examiner, although it requires SPE approval:

The examiner may, with approval from the supervisory patent examiner, reopen prosecution to enter a new ground of rejection in response to appellant’s brief.

MPEP § 1207.04.

Hyatt’s petition to the U.S. Supreme Court argues that a patent applicant has a right to appeal — and that this examination cycling violates his statutory rights.  In particular, Hyatt points to 35 U.S.C. § 134 and § 6.

134(a). An applicant for a patent, any of whose claims has been twice rejected, may appeal from the decision of the primary examiner to the Patent Trial and Appeal Board, having once paid the fee for such appeal.

6(b). Duties.—The Patent Trial and Appeal Board shall— (1) on written appeal of an applicant, review adverse decisions of examiners upon applications for patents pursuant to section 134(a).

In a remarkably parallel situation from the early 1900’s the U.S. Supreme Court held that mandamus was appropriate where the examiner refused to forward cases to the Board. U.S. ex rel. Steinmetz v. Allen, 192 U.S. 543 (1904).

Thus, Hyatt’s Question Presented:

Whether MPEP § 1207.04 violates patent applicants’ statutory right of appeal following a second rejection.

This is a well presented case and you can read the brief here: [USSCPetitionforWritofCertiorari]

If you’re in the Iowa region, we invite you to attend Patent Law’s New Directions: An Update from Director Porcari at the University of Iowa College of Law on Tuesday, May 14, from 2:45 PM to 5:00 PM.  Damien Porcari, Director of the Elijah J. McCoy Midwest Regional United States Patent and Trademark Office, will talk about the new 101 guidelines, design patents and USPTO policies.

Two hours of CLE credit are pending. There is no cost for the seminar, but we ask that attendees register in advance.  More information and a registration link can be found the Iowa Innovation, Business & Law Center website.

ATI Tech ULC v. Iancu (Fed. Cir. 2019)

On appeal, the Federal Circuit has sided with the ATI — finding the patentee’s Unifed Shader claims patentable over the prior art. U.S. Patents 7,742,053, 6,897,871, and 7,327,369 (Graphics processing architecture employing a ‘unified shader’).

These patents are pre-AIA and the patentee is claiming that its invention pre-dates the prior art.  The PTAB agreed that ATI’s conception was early enough, but concluded that the patentee lacked diligence.

One problem with the PTAB opinion was its statement requiring “continuous reasonable diligence” in reducing the invention to practice while the actual traditional standard is “reasonably continuous diligence.” The Federal Circuit has previously decided this exact point:

A patent owner need not prove the inventor continuously exercised reasonable diligence throughout the critical period; it must show there was reasonably continuous diligence.

Perfect Surgical Techniques, Inc. v. Olympus Am., Inc., 841 F.3d 1004 (Fed. Cir. 2016) (emphases original).

In the IPR, the inventor provided testimony and supporting document that showed that at least one person worked on the design of a working model embodying the invention every business day during the diligence period.  The PTAB, however, dismissed this evidence because at least some of the time was spent working on alternative chip designs and optional features not particularly claimed.

On appeal, the Federal Circuit severely chastized the PTAB, Solicitor, and PTO Director for rejecting diligence while failing to identify any delays or gaps in activity.

“We are directed to no view of the evidence that could support a conclusion that ATI set aside the development of the Unified Shader. The PTAB cited no basis for finding that this technology was not being diligently pursued. The Director seeks to excuse the PTAB’s absence of support for its holding, by stating that ATI bears the burden of proof of diligence. However, the Director does not explain where the burden of proof was not met, upon the extensive evidence of daily activity. . . . [T]he purpose of the diligence requirement is to show that the invention was not abandoned or set aside. Here, the Director does not point to the remotest suggestion of abandonment or setting aside of the Unified Shader technology.”

Reversed

by Dennis Crouch

Acorda Therapeutics, Inc., v.  Roxane Laboratories, Inc. (Supreme Court 2019)

Obviousness is the core doctrine of patentability and primary focus of both patent examination and post issuances PTAB challenges.  In this case, Acorda has asked the U.S. Supreme Court to spend some time on this important doctrine — and particularly consider the role of objective indicia of nonobviousness such as “commercial success, long felt but unsolved needs, [and] failure of others.” Quoting Deere.

The question presented is whether objective indicia of nonobviousness may be partially or entirely discounted where the development of the invention was allegedly “blocked” by the existence of a prior patent, and, if so, whether an “implicit finding” that an invention was “blocked,” without a finding of actual blocking, is sufficient to conclude that an infringer has met its burden of proof.

The infringement lawsuit was triggered when Roxane (and others) filed Abbreviated New Drug Applications (ANDAs) with the FDA to start making generic versions of Acorda’s drug treatment for multiple sclerosis (Ampyra). Roxane successfully defended the lawsuit by arguing that the asserted claims were obvious.

For the obviousness analysis, the patentee Acorda provided evidence of commercial success and long felt but unmet need that was tied to the invention at issue. However, the Federal Circuit found that those secondary factors did not apply because of a broader blocking-patent already exclusively licensed to Acorda.

The setup here begins with the fact that Acorda is the exclusive licensee of a broad patent for treating 4-AP to treat MS (Elan patent). The Elan patent has now expired, but it was firmly in place as Acorda conducted its research and obtained FDA approval. This petition here focuses primarily on four follow-on patents obtained by Acorda covering tweaks to the treatment plan. Despite the tweaks, it appears that Elan’s broad patent still covers the drug treatment at issue here.  I.e., Elan’s patent is a “blocking patent.”

When it came to the secondary indicia of nonobviousness, the Federal Circuit majority determined that a key reason why Acorda was able to do research on its four follow-on patents is that it was protected by the blocking patent — no other company was ready to risk infringement liability to do the research.  In other words, the commercial success, failure of others, and recognized but unmet need were all due to the Elan patent’s chilling effect on competition. From the majority:

“The risk of infringement liability for marketing in the US would have provided and independent incentive [for third parties] not to develop the invention of the Acorda patents, even if those inventions were obvious.”

The decision in Acorda falls in line with the court’s 2005 decision in Merck & Co. v. Teva Pharmaceuticals USA, Inc., 395 F.3d 1364 (Fed. Cir. 2005) (en banc denied; cert denied). In that case, the Federal Circuit also held that a prior patent that precluded market entry was the cause of Merck’s commercial success — not the invention’s ingenuity.

Full Panel Denies Rehearing in Fosamax Patent Case

In its brief, Acorda provides its legal case:

The Federal Circuit’s invocation and expansion of its judicially manufactured blocking-patent doctrine to negate Acorda’s “significant,” “convincing,” and unrefuted evidence of nonobviousness is plainly irreconcilable with this Court’s decision in Graham v. John Deere Co., 383 U.S. 1 (1966), which established that an inquiry into commercial success, failure of others, and long-felt but unmet need is an important protection against hindsight bias in the obviousness analysis. As Judge Newman recognized in her dissent—and as Federal Circuit judges have emphasized in prior dissents highlighting the blocking-patent doctrine’s deficiencies—the elimination of that essential safeguard makes it far more likely that courts will submit to the “temptation” of invalidating patents that are obvious only when viewed through the lens of the patents’ own teachings.

The Federal Circuit’s application of its blocking-patent doctrine in this case was particularly problematic because the court of appeals identified no evidence that anyone was actually deterred by the Elan patent from researching low-dose uses of 4-AP—and instead shifted the burden of proof to Acorda to “supply evidence” to negate the district court’s “implicit finding” of blocking.  In so doing, the Federal Circuit upended the clear-and-convincing-evidence burden of proof for invalidity challenges that this Court recognized in Microsoft Corp. v. i4i Limited Partnership, 564 U.S. 91, 101–02 (2011), and obliterated the presumption of validity that Congress codified in the Patent Act, 35 U.S.C. § 282(a).

Read the petition here: Link.

On April 3, 2019, President Trump released a “memorandum on combating trafficking in counterfeit and pirated goods” which calls for a report on the state of the issue to be completed by November 1, 2019.  Homeland security is in charge, with consultations from Commerce, Justice, OMB, USTR, and others, including intellectual property rights holders.

The memorandum mentions a couple of prior studies on counterfeiting and piracy, but the current data continues to be lacking — as the GAO wrote in 2010: “U.S. government estimates of economic losses resulting from counterfeiting cannot be substantiated due to the absence of underlying studies.”

A few elements of the memorandum are important to consider:

1. The Administration is treating counterfeit goods and copyright piracy as homeland security and law enforcement issues — directing those groups to to step-up their efforts.
2. The Administration is focusing as much on trafficking as it is production.  Think about vendors such as Amazon, Physical carriers such as FedEx, digital pipeline operators; payment providers, and customs brokers.  For legitimate intermediaries, however, the focus is on acting as “beneficial partners in combating trafficking.”

Although counterfeit goods may be costing the makers of branded products, the companies trafficking in the goods are making money.  It will be interesting to see the extent that those companies operating on an international scale will be willing to cooperate with US law enforcement.

IBM v. Iancu (Fed. Cir. 2019) (non-precedential)

In two separate IPR proceedings, the PTAB found several of IBM’s claims unpatentable as anticipated obvious. U.S. Patent No. 7,631,346 claims 1, 3, 12, 13, 15, and 18.  On appeal, the Federal Circuit has vacated / reversed those opinions.  [error fixed above]

The patent here claims a  user-authentication method for a “single-sign-on . . . within a federated computing environment.”  The basic setup here is that user known to a “first system” wants access to resources on a “second system” that doesn’t know about the user.  The invention works by the first system providing an “identifier” associated with the user and the second system creating a user account using that identifier — not too complex here.  A “single-sign-on” is basically a setup for user convenience so that the user only logs-in on one system but can access the whole federation.

A federation is a loosely coupled affiliation of enterprises which adhere to certain standards of interoperability; the federation provides a mechanism of trust among those enterprises with respect to certain computational operations for the users within the federation.

In the appeal here, the patentee argues that the Board too-broadly defined the terms “federated computing environment.”  Of some interest here, both IBM and the IPR petitioners (Priceline, OpenTable, etc.) agreed upon the term’s definition and that it was limiting even though it appeared only in the claim preamble.  The PTAB disagreed with the parties — and in particular held that the term “federation . . . is not limited to enterprises” but could instead more generally includes a group of “entities.”  Under the Board’s interpretation, any two computer systems could be seen as “entities” even if both are within a single “enterprise.”  That broader scope is important because the closest prior art authentication system involved two computers within a single enterprise.

On appeal, the Federal Circuit found the PTAB’s construction unreasonable – given the plain definition in the specification.  On remand, the PTAB will consider whether the prior art still anticipates the invention based upon this narrower construction.

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I considerably simplified the facts above.  It turns out that the patent specification was not as consistent in stating that a “federation” required computers from at least two different “enterprises.” In particular, the specification states that:

In the context of the present invention, a federation is a set of distinct entities, such as enterprises, organizations, institutions, etc., that cooperate to provide a single-sign-on, ease-of-use experience to a user. . . . The terms ‘entity’ or ‘party’ generally refers to an organization, an individual, or a system that operates on behalf of an organization, an individual, or another system.

Notice that this definition of federation is not limited to enterprises, but instead is tied to the broader category of “entities,” and entities include “systems” — i.e., computers.  Thus, the Board found that a federation can be created by two computer systems even if operating within the same business enterprise.

In the appeal, the Federal Circuit rejected this approach holding here that the “such as” language limits was intended as an exclusive listing of what counts as federation elements.

The column 10 passage refers to entities “such as” the ones listed and includes “etc.”—both of which, in this context, indicate that only things of a type similar to the itemized ones are covered, namely, other establishments or ventures or firms or the like. We have recognized that “such as” and “etc.” sometimes have just that meaning. (“rule of ejusdem generis). That understanding is the only reasonable one for the passage, given the plain meaning of the definitional and other language we have already discussed.

It is hard for me to say what the take-away is for patent drafters on this claim construction except – who knows what the court will decide?

I’ll note here that the IPR petitioners settled the case with IBM but the USPTO stepped in to defend the PTAB sua sponte claim construction decision.

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Does Silence Disclose a Negative Limitation: The panel also addressed the single-sign-on element of the claims — the single-sign-on requirement is interesting because it may sound like a positive limitation but is really being interpreted as a negative limitation. Basically, once the user gives credentials for the first system, the user doesn’t need more authentication (i.e. passwords) to access the second system.  In the appeal, the Federal Circuit found that the silence on a topic was not sufficient to disclose the absence of a feature:

Even if the Board were correct that Mellmer is “silent” …  that characterization would not alone support a finding that there was no user authentication action….  Silence in that sense would not by itself suffice for the Petitioner to meet its burden to prove, by a preponderance of the evidence, that there was no user authentication action in this scenario.

In other words – a negative limitation can be powerful.  On appeal, the Federal Circuit has reversed the holdings based upon single-sign-on being found in this reference.

by Dennis Crouch

This case focuses on patents covering the opioid drug oxymorphone that Endo sells as Opana ER.  In 2017, the FDA requested that (reformulated) Opana ER be removed from the  market in response to the high risk of its illicit use.  Endo had previously pulled Opana ER from the market in 2012 and then re-launched in a “non-crushable form.”  However, that form continued to be abused (including by liquefying and injecting). In response to a new FDA request, Endo again removed the reformulated version from the market. The appeal here is focused on one a subset of the patents covering Opana — a fight between Endo and generic manufacturers who want to start distributing the drug once again. 

Endo Pharmaceuticals Inc. v. Teva Pharmaceuticals USA, Inc. (Fed. Cir. 2019)

Endo’s patents at issue on appeal claim a personalized method-of-treatment that has three distinct steps:

1. “Providing” the drug (5 to 80 mg of oxymorphone in a controlled release matrix);
2. “Measuring” the patient’s creatine clearance rate; and
3. “Administering” the drug with dosage calculated based upon the patient’s creatine clearance rate (using a particular formula).

The inventors here were concerned about renal impairment experienced by some folks taking oxymorphone.  In their research, they discovered that some folks clear the drug faster (and have fewer kidney problems). The inventors here used the metabolite creatine as an easier to measure proxy for measuring drug clearance (creatine clearance rate) since it comes out in the urine.

These discoveries in hand, the inventors came up with the scheme of giving lower dosages of oxymorphone to individuals with lower clearance rates.

The district court reviewed the claims and found them invalid — holding that the claims were effectively directed to a law of nature.  On appeal, the Federal Circuit has reversed and reinstated the patent’s validity.  This decision here is the next in a series of decisions creating a hard rule that method-of-treatment claims are patent eligible. See Vanda Pharmaceuticals Inc. v. West-Ward Pharmaceuticals International Ltd., 887 F.3d 1117 (Fed. Cir. 2018) and Natural Alternatives International v. Creative Compounds, LLC, 2019 WL 1216226 (Fed. Cir. Mar. 15, 2019).  Here, the court writes:

[T]he asserted claims are not directed to patent-ineligible subject matter. On the contrary, the claims are directed to a patent-eligible method of using oxymorphone … to treat pain in a renally impaired patient. . . .

The claims at issue here are legally indistinguishable from the representative claim in Vanda. Both claims recite a method for treating a patient.

The key precedent here is Mayo v. Prometheus (2012). As in Vanda and Natural Alternatives, the Federal Circuit has characterized Mayo as directed only to a method of optimizing a treatment plan — rather than being a treatment itself.   The claims at issue in Mayo require administering a particular drug for treatment of a GI disorder. However, the Federal Circuit explained away that aspect of the claim:

Although the representative claim in Mayo  recited administering a thiopurine drug to a patient, the claim as a whole was not directed to the application of a drug to treat a particular disease. Furthermore, the administering step in Mayo is distinguishable from the administering step in the [Endo] patent because the administering step in Mayo is the first step in the method that simply describes giving the drug to a patient with a certain disorder. By contrast, the administering step in the ’737 patent is the step that describes giving a specific dose of the drug based on the results of kidney function testing.

The district court had rejected the clams — agreeing with its magistrat judge that “[t]he administering step merely instructs physicians to dispense oxymorphone for the treatment of pain in a well-know[n] manner, while utilizing the natural law to manage the dosage.”

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Question for those of you doing software – What is your equivalent of a “method-of-treatment” claim.