Posts in Litigation

On behalf of nonprofit, U.S. Inventor, Inc., and over a dozen other amici, Flachsbart & Greenspoon, LLC has submitted a Brief of Amici Curiae urging the Supreme Court to grant certiorari from the Federal Circuit’s notoriously error-ridden decision in the waterskiing case: Zup, LLC v. Nash Manufacturing, Inc. Reviewing this decision will be an excellent way to get obviousness doctrine back on track.

In that 2-1 decision (with Judge Newman dissenting), the Federal Circuit held that even “considerable” or “strong” objective evidence of nonobviousness will sometimes not save a patent from an obviousness ruling. That ruling is wrong. It is also out of touch with Supreme Court doctrine.

On January 10, the U.S. District of Delaware held that Actavis’ generic version of Orexo’s opioid dependency treatment infringed an Orexo patent. The patent-at-issue in this order was U.S. Patent No. 8940330, titled Abuse-Resistant Pharmaceutical Composition for the Treatment of Opioid Dependence. This non-appealable infringement judgment prevents Actavis from commercializing its generic opioid dependency treatment until Orexo’s patent rights expire in September 2032. The judgment covers all dosage levels of the Actavis generic product.

The ‘650 patent covers a compound called fesoterodine, which is an antimuscarinic drug marketed as Toviaz® and used to treat urinary incontinence. Mylan Pharmaceuticals petitioned for IPR of the ‘650 patent alleging certain claims were obvious. After institution of the IPR, Amerigen and two other companies joined as parties to the proceeding. After the PTAB’s finding that the challenged claims were not unpatentable, Amerigen—but not Mylan—appealed the decision.

On appeal, UCB asserted Amerigen lacked standing. Specifically, UCB argued that, based on the Paragraph III certification accompanying Amerigen’s abbreviated new drug application (ANDA), the FDA will not approve Amerigen’s ANDA until the expiration of the ‘650 patent, previously upheld in a separate suit in the District of Delaware, in 2022. Consequently, UCB contends Amerigen is foreclosed from infringing the ‘650 patent, and without a possibility of infringement there can be no justiciable dispute.

The Federal Circuit rejected UCB’s argument for several reasons. First, this case did not arise under the Hatch-Waxman Act. Second, Amerigen did not rely a risk of infringement liability as a basis for injury. Rather, Amerigen pointed to a concrete commercial injury that it incurred from the listing of the ’650 patent in the Orange Book, which was only possible so long as the ’650 patent was not found invalid. Specifically, the listing of the ‘650 patent blocked the launch of Amerigen’s tentatively approved ANDA, and invalidation of the patent would advance its drug’s launch.

On January 10, the Federal Circuit issued an opinion affirming a decision of the Patent Trial and Appeal Board (PTAB) invalidating several claims of U.S. Patent No. 6,597,812 (the ‘812 patent) as obvious. Realtime Data, LLC v. Iancu, No. 2018-1154 (Fed Cir. Jan. 10, 2019) (Before Dyk, Taranto, and Stoll, Circuit Judges) (Opinion for the court, Stoll, Circuit Judge).

Hewlett Packard Enterprise Co., HP Enterprise Services, LLC, and Teradata Operations, Inc. (collectively, HP) sought inter partes review (IPR) of U.S. Patent No. 6,597,812, alleging that the claims were obvious under 35 U.S.C. §103(a) over U.S. Patent No. 4, 929, 946 (O’Brien) and further, in view of a data compression textbook by Mark Nelson (Nelson). After instituting review, the PTAB found the challenged claims obvious over the prior art. Realtime Data appealed on two grounds: (1) that the PTAB erred in determining that a person of ordinary skill would have been motivated to combine the teachings of O’Brien and Nelson, and (2) that the PTAB erred by failing to properly construe the term “maintaining the dictionary”.

On appeal, the Federal Circuit accepted HP’s primary argument that all of the challenged claims were disclosed in O’Brien, with Nelson used only to demonstrate that the term “dictionary encoder” used in the ‘812 patent was actually what was disclosed in O’Brien. HP thus relied on Nelson merely to explain that O’Brien’s algorithm was a dictionary algorithm, which Realtime conceded. Because the PTAB did not rely on Nelson for the disclosure of any particular element or teaching and instead relied on O’Brien alone to supply the elements and teachings, there was no obligation to make any finding regarding a motivation to combine O’Brien and Nelson. Therefore, the PTAB “did not err when it concluded that claim 1 was invalid under § 103 based on O’Brien alone,” Judge Stoll wrote.

On the morning of January 14th, the U.S. Supreme Court heard oral arguments in Rimini Street v. Oracle USA, a case that asks the nation’s highest court to decide whether the recovery of “full costs” in a copyright infringement suit as governed by 17 U.S.C. § 505 is limited to taxable costs under 28 U.S.C. § 1920 and 28 U.S.C. § 1821 or whether non-taxable costs can also be recovered. Much of the day’s discussion centered on the meaning of “full costs” and how that term had evolved under various revisions of U.S. copyright law, going back to the Copyright Act of 1831… Clement argued that Rimini Street’s interpretation of full costs renders both the word full completely superfluous and the first sentence of Section 505 without any meaning. “The better course [is] to say that ‘full’ means full, rather than nothing at all,” Clement argued.

On December 28, 2018, the limited liability company representing famed Seattle-area grunge rock band Nirvana sued clothing designer Marc Jacobs and fashion retailers Neiman Marcus and Saks Fifth Avenue in the U.S. Federal District Court for the Central District of California. At the center of the lawsuit are copyright and trademark infringement allegations regarding the use of Nirvana’s “smiley face” logo on a line of designer clothing made by Marc Jacobs. Nirvana alleges that Marc Jacobs has used the band’s common law trademarks and infringed the band’s copyright in the smiley face logo in a misleading way in order to make it appear that Marc Jacobs’ “Bootleg Redux Grunge” clothing line is endorsed by or somehow associated with Nirvana. Nirvana first licensed the use of the smiley face logo, designed by deceased Nirvana front man Kurt Cobain in 1992, and it has been continuously used to identify Nirvana’s music and licensed merchandise since.

The doctrine of assignor estoppel has been around for over a century and most often applied in the U.S. International Trade Commission (ITC) and U.S. district courts to prevent a first party assigning a patent to a second party from then challenging the validity of the patent they had just assigned. In a November 9, 2018 decision, the U.S. Court of Appeals for the Federal Circuit ruled that the doctrine of assignor estoppel does not apply in the inter partes review (IPR) context (see Arista Networks, Inc. v. Cisco Systems, Inc., (Fed. Cir. 2018). This raises intriguing possibilities regarding how companies might be able to protect themselves. One possibility might be to revise their employment agreements for signing by new employees.

On January 11, GKN Automotive LTD. filed a brief in opposition to a petition for writ of certiorari filed by JTEKT Corporation. The question JTEKT seeks to have the Supreme Court consider is whether any inter partes review (IPR) petitioner, even a petitioner without standing, may appeal a final written decision of the Patent Trial and Appeal Board (PTAB) to the Court of Appeals for the Federal Circuit. The standing requirement for litigants in order to gain entry to a federal court is well-established, black-letter law taught to every law student across the country. It is hardly shocking that the Federal Circuit would apply well-established Constitutional safeguards and procedural law to prevent those without appropriate grievances from entry into the federal appellate system. In this case, JTEKT simply did not have any injury, real or imagined.

Occasionally, we hear people say, “brokered patents are all junk.” This begs the question, “are operating companies and non-practicing entities (NPEs) spending hundreds of millions of dollars buying junk patents?” Luckily, the short answer is no. We know clients have successfully bought and used brokered patents to substantially alter their licensing and litigation posture at a lower cost than the alternatives. We also know that patents on the brokered market rank higher than average patents. So why this disconnect? We are victims of our own cognitive biases and the behavioral economic traps that make it harder for buyers to find and buy patents… When only a small fraction of what we are looking at is ultimately interesting to us, our brains can trick us. Using a structured decision-making process together with some tools can overcome those biases and allow us to identify and buy the patents that fit our business needs.

On January 11th, Askeladden LLC (Askeladden) filed an amicus brief in support of the Supreme Court accepting certiorari from JTEKT Corp. v. GKN Automotive Ltd., No. 2017-1828 (Fed. Cir. 2018). This case raises the important question of whether the U.S. Court of Appeals for the Federal Circuit can refuse to hear an appeal by a non-defendant petitioner from an adverse final written decision in an inter partes review (IPR) proceeding on the basis of a lack of a patent-inflicted injury-in-fact, even though Congress has statutorily created the right for “dissatisfied” parties to appeal to the Federal Circuit. 35 U.S.C. § 319.

Ultimately, the panel held that JTEKT failed to establish an actual injury sufficient to confer Article III standing because “the[] declarations [did] not establish that [JTEKT’s] planned product would create a substantial risk of infringing [the] patent or likely lead to charges of infringement[.]” Id. Further, the panel did not agree with JTEKT’s argument that the “creation of estoppel based on [JTEKT’s] participation in the IPR constitute[d] a separate, and independent, injury[.]” Id. Therefore, the appeal was dismissed.

According to the brief: “The issue raised is whether meeting the statutory requirements of Section 319 of Title 35 of the United States Code is an intangible injury-in-fact that is enough to meet the “case or controversy” requirements of Article III of the U.S. Constitution.”

The examiner concluded the claims were directed to the abstract idea of rules for playing a game, which fell within the realm of methods of organizing human activities. The examiner further found the claims were unpatentable as obviousness over old and well known to dice games, applying the printed matter doctrine… Marco also contended that its claimed method of playing a dice game could not be an abstract idea because it recites a physical game with physical steps. The Court rejected this argument “because the abstract idea exception does not turn solely on whether the claimed invention comprises physical versus mental steps.” Since the only arguably unconventional aspect of the recited method of playing a dice game was found to be printed matter, thus falling outside the scope of § 101, the rejected claims did not recite an “inventive concept” sufficient to “transform” the claimed subject matter into a patent-eligible application of the abstract idea.

The U.S. Supreme Court on January 4th granted certiorari to take up Iancu v. Brunetti on appeal from the Court of Appeals for the Federal Circuit. The case asks the nation’s highest court to answer the question of whether the Lanham Act’s prohibition on the federal registration of “immoral” or “scandalous” trademarks is facially invalid under the First Amendment’s free speech clause.

The Solicitor General is arguing that Erik Brunetti has no right to require the government to register a scandalous mark or to inscribe the term on the Federal Register. Brunetti’s reply pushes back, pointing to instances where the USPTO approved trademark registrations for profane, excretory or sexual terms.