A Substantial Question is All That is Needed to Defeat a Preliminary Injunction

Novo Nordisk A/S, v. Sanofi-Aventis U.S. LLC [2008-1225] (July 30, 2008) [PROST, Lourie, Bryson] NON-PRECEDENTIAL The Federal Circuit affirmed the denial of a preliminary injunction against infringement of U.S. Patent No. 7,241,278.
DISCUSSION: The district court denied the preliminary injunction because Novo failed to show a reasonable likelihood of success on the merits. More specifically the district court found that Novo has not shown that Sanofi’s asserted defense that SoloStar does not infringe the ’278 patent lacks substantial merit.The Federal Circuit said that after reviewing the intrinsic record, it could not conclude that the district court abused its discretion. The Federal Circuit said that in light of apparent conflict between the specification and the claims, the district court appropriately exercised its discretion in concluding that Novo has not established a likelihood of success on the merits. The Federal Circuit read the district court’s opinion as generally addressing whether Sanofi raised “substantial questions,” rather than specifically articulating a claim construction. The Federal Circuit affirmed the denial of a preliminary injunction.

Argued Differences Must Be Reflected in The Claims

Board of Regents of the University of Texas System v. Benq America Corp., [2007-1388] (July 24, 2008) [PROST, Dyk, Hochberg] The Federal Circuit affirmed summary judgment of non-infringement based on the parties’ stipulation after the district court’s construction of the claim term “syllabic element”.
DISCUSSION: The Board of Regents argued that the construction of “syllabic element” was incorrect, and that the district court improperly ignored its intermittent infringement argument. After reviewing the intrinsic record, the Federal Circuit concluded that the district court correctly construed the term “syllabic element.” The Federal Circuit began with the words of the claims, which by itself, provided little guidance in this case. The Federal Circuit turned to the specification, which repeatedly distinguished between a “word” and a “syllabic element” and indicated that a word is comprised of syllabic elements, confirming the construction that the terms “word” and “syllabic element” are not coextensive in scope.
The Board of Regents argued that because the specification taught that prefixes and suffixes could be syllabic elements, and some well-known suffixes and prefixes include more than one syllable this passage compels a construction that allows syllabic elements to be more than one syllable. The Federal Circuit was not persuaded, observing that just because a “syllabic element” may be a prefix or a suffix does not mean that all prefixes and suffixes are “syllabic elements.” After examining the prosecution history, the Federal Circuit concluded that the proper construction of “syllabic element” is a one-syllable letter group that either comprises a word or can be combined with other one-syllable letter groups to form a word.
The Federal Circuit next turned to the proper construction of the claim phrase “each pre-programmed code being representative of a syllabic element.” The District Court concluded that the accused devices did not rely upon a vocabulary of only syllabic elements, but the Board or Regents disagreed that the asserted claims require the vocabulary to include only syllabic elements. In other words, infringement occurs whenever a match with a syllabic element occurs, even if matches are also made with non-syllabic elements. The Federal Circuit noted that the claims distinguish between “each pre-programmed code” and “the matched one or more pre-programmed codes”, and that these different claim terms are presumed to have different meanings.
The Federal Circuit noted that the Board of Regents argued differences between the claims and the prior art, but these arguments were not reflected in the claims. Thus when the claim was subsequently allowed after the addition of “each” and thus the claims were limited to syllabic elements.
The Federal Circuit affirmed summary judgment of non-infringement.

Motivation Need Not be Found in References Sought to be Combined but May be Found in Any Number of Sources

In re Stauffer, [2007-1445] (July 24, 2008) [WARD, Schall, Prost] NON-PRECEDENTIAL The Federal Circuit affirmed the BPAI’s decision that the claims were obvious under 35 U.S.C. § 103.
DISCUSSION: The scope and content of the prior art, the level of skill in the art at the time of the invention, the objective evidence of nonobviousness, the presence or absence of a motivation to combine, and whether a reference constitutes analogous prior art, what the prior art teaches, and whether it teaches toward or away from the claimed invention are all questions of fact. Inter alia, Applicant argued a lack of motivation to modify the prior art. The Federal Circuit noted that the motivation need not be found in references sought to be combined, but may be found in any number of sources, including common knowledge, the prior art as a whole, or the nature of the problem itself. The Federal Circuit said that there is no requirement that the prior art contain an express suggestion to combine known elements to achieve the claimed invention. Rather, the suggestion to combine may come from the prior art, as filtered through the knowledge of one skilled in the art.
The Federal Circuit found no error in the BPAI’s decision.

Not Obvious Because There was No Reason One Would Have Considered Mmodification of the Very Property That Made Compound Desirable

Eisai Co. Ltd. v. Dr. Reddy’s Laboratories, Ltd., [2007-1397, -1398] (July 21, 2008) [RADER, Linn, Prost] The Federal Circuit affirmed that the district court correctly determined that the ’552 patent is non-obvious over the proffered prior art and that Eisai’s alleged acts during prosecution did not rise to the level of inequitable conduct.
BRIEF: Dr. Reddy’s and Teva each filed Abbreviated New Drug Applications seeking to manufacture a generic version of Aciphex before the expiration of U.S. Patent No. 5,045,552. Where, as here, the patent at issue claims a chemical compound, the analysis of the third Graham factor (the differences between the claimed invention and the prior art) often turns on the structural similarities and differences between the claimed compound and the prior art compounds. Obviousness based on structural similarity can be proved by identification of some motivation that would have led one of ordinary skill in the art to select and then modify a known compound (i.e. a lead compound) in a particular way to achieve the claimed compound. The requisite motivation can come from any number of sources and need not necessarily be explicit in the art. The Federal Circuit held that post-KSR, a prima facie case of obviousness for a chemical compound still, in general, begins with the reasoned identification of a lead compound. The Federal Circuit said that defendants could not create a genuine issue of material fact on obviousness through unsupported assertion of a different lead compound, and the record contains no reasons why a skilled artisan would have considered modification of the very property that made it desirable as an identifiable, predictable solution.
The Federal Circuit found the record is devoid of any real suggestion of intent to deceive the Patent Office, much less the clear and convincing evidence required to support a finding of inequitable conduct. The Federal Circuit agreed with the district court that the failure to disclose its co-pending application along with the rejections issued in its prosecution, while not completely forthcoming, did not rise to the level of inequitable conduct.

Covenant Not To Sue Destroys Jurisdiction

Merck & Co., Inc., v. Apotex, Inc., [2007-1362] (July 16, 2008) [GAJARSA, Friedman, Prost] The Federal Circuit affirmed the district court’s denial of Apotex’s motion to add an antitrust counterclaim as within the district court’s discretion, and because the infringement and invalidity counterclaims have been rendered moot, vacated the district courts dismissal for lack of jurisdiction, and remanded with instructions to dismiss the claims as moot.
BRIEF: The Federal Circuit noted that in the context of Hatch Waxman it had recently held that Article III jurisdiction can survive a covenant not to sue, but noted that Apotex no longer suffers a delay in entering the market under either the thirty-month stay provision or the 180-day exclusivity provision that is traceable to Merck and redressible by a court judgment. The Federal Circuit also affirmed the denial of Apotex’s motion to add an antitrust counterclaim, finding no error in the Court’s conclusion that the pleadings failed to allege facts sufficient to support its antitrust counterclaim.

No Excuse for Waiting Eight Years to Raise Claim

Serdaveric v. Advanced Medical Optics, Inc., [2008-1075] (July 16, 2008) [LINN, Michel, Zagel] The Federal Circuit affirmed summary judgment on the basis of laches and state statutes of limitations on Serdaveric’s claims for correction of inventorship and unjust enrichment.
BRIEF: Laches is an equitable defense that may bar an inventorship claim. The application of the defense of laches is committed to the sound discretion of the district court. “[A] delay of more than six years after the omitted inventor knew or should have known of the issuance of the patent will produce a rebuttable presumption of laches.” The presumption applied because Serdaveric waited at least eight years. Serdarevic argued that her eight-year delay in bringing suit was reasonable or excusable because of her unfamiliarity with the U.S. patent system, her inability to obtain legal counsel, and her efforts to license her inventorship rights. The Federal Circuit agreed that these excuses were insufficient to prevent the application of the presumption, and further found that plaintiff failed to rebut the presumption of prejudice, in view of the death of important witnesses. The Federal Circuit went on to affirm summary judgment on the state unfair competition claims, as well as the denial of further discovery under Rule 56(f).

Claim Construction Requires Infringement Context

Jang v Boston Scientific Corporation [2007-1385] (July 15, 2008) [DYK, Gajarsa, Linn] The Federal Circuit vacated judgment was not clear how the appealed claim constructions would render the accused products infringing or noninfringing.
SIGNIFICANCE: The lack of information concerning infringement makes it difficult to comprehend the claim construction issues, concluding it lacked “a proper context for an accurate claim construction.”
BRIEF: The district court issued a claim construction opinion, as a result of which the parties agreed that Jang could not prove that the accused products were “covered by” (i.e., infringed) the asserted patents, and that summary judgment should be entered, so that Jang could appeal. The stipulation did not explain why the district court’s claim construction resulted in non-liability. The Federal Circuit said that A judgment is reviewable only if it is possible for the appellate court to ascertain the basis for the judgment challenged on appeal. The Federal Circuit identified two defects with the judgment: First, it was impossible to discern from the stipulated judgment which of the district court’s claim construction rulings would actually affect the issue of infringement. Second, the stipulated judgment provided no factual context for the claim construction issues presented by the parties. In particular, nothing in the stipulated judgment provides any context with respect to how the disputed claim construction rulings relate to the accused products. The Federal Circuit said that is has emphasized the importance of the context provided by an analysis of the accused device when ruling on claim construction. The Federal Circuit said that The lack of information concerning infringement makes it difficult to comprehend the claim construction issues, concluding it lacked “a proper context for an accurate claim construction.”

"Mastermind" is Required to Find Infringement of a Method Claim by Multiple Cooperating Parties

Muniauction, Inc v. Thomson Corporation [2007-1485] (July 14, 2008) [GAJARSA, Plager, Prost] The Federal Circuit reversed non-obviousness of some claims, reversed as to infringement of the remaining claims of U.S. Patent No. 6,161,099, and vacated $77 million in damages (including for willfulness) and permanent injunction.
SIGNFICANCE: Where the actions of multiple parties combine to perform every step of a claimed method, the claim is directly infringed only if one party exercises “control or direction” over the entire process such that every step is attributable to the controlling party, i.e., the “mastermind.” Mere “arms-length cooperation” will not give rise to direct infringement by any party.
BRIEF: While the appeal was pending, the Federal Circuit issued two opinions relevant to issues presented by this case. First, In re Seagate Technology, LLC which changed the standard of willful infringement from one akin to negligence to that of objective recklessness. Second, BMC Resources, Inc. v. Paymentech, L.P. which held that where steps of a method claim are performed by multiple parties, the entire method must be performed at the control or direction of the alleged direct infringer.
Regarding validity, the Federal Circuit found that the expert evidence regarding the prior art was erroneous because it relied on a difference not set forth in the claims, and thus the court concluded that validity was not supported by substantial evidence. The Federal Circuit framed the issue: “A central principle in this inquiry is that “a court must ask whether the improvement is more than the predictable use of prior art elements according to their established functions.” The Federal Circuit found that it would have been predictable to use a web browser with the prior art. The Federal Circuit noted that the written description of the ’099 patent itself identifies the invention as using “a conventional Internet browser.” The Federal Circuit was not persuaded by evidence of secondary considerations, noted that at least some of the factors argued by Muniauction lack the requisite nexus to the claims, and that to the extent that some of the factors arguably meet the nexus requirement, their relationship to the claims is simply too attenuated to overcome the strong prima facie demonstration by Thomson that the claims are obvious.
Turning to infringement of the remaining dependent claims, Muniauction argued for joint infringement. The Federal Circuit said that it is axiomatic that a method claim is directly infringed only if each step of the claimed method is performed. The Federal Circuit further said that In BMC Resources, it clarified the proper standard for whether a method claim is directly infringed by the combined actions of multiple parties. The court’s analysis was founded on the proposition that direct infringement requires a single party to perform every step of a claimed method. The Federal Circuit said that where the actions of multiple parties combine to perform every step of a claimed method, the claim is directly infringed only if one party exercises “control or direction” over the entire process such that every step is attributable to the controlling party, i.e., the “mastermind.” Mere “arms-length cooperation” will not give rise to direct infringement by any party. The Federal Circuit found that the jury instruction was incorrect, noting the control or direction standard is satisfied in situations where the law would traditionally hold the accused direct infringer vicariously liable for the acts committed by another party that are required to complete performance of a claimed method. The Federal Circuit concluded that in this case, Thomson neither performed every step of the claimed methods nor had another party perform steps on its behalf, and Muniauction had identified no legal theory under which Thomson might be vicariously liable for the actions of the bidders, so there was no infringement.

There is a Presumption Of Public Access To Judicial Records

Baystate Technologies, Inc. v. Bowers [2008-1204] (July 10, 2008) [LOURIE, BRYSON, and PROST] The Court of Appeals for the Federal Circuit vacated and remanded the district court’s order denying Professor Kuney leave to intervene and modify the protective order so that he could research the case.
BRIEF: Professor Kuney sought to intervene to modify the protective order in a case to access documents for his research. The Federal Circuit began by noting that intervention is the proper means for a non-party to challenge a protective order. The Federal Circuit also noted the presumption of public access to judicial records. The Federal Circuit concluded that in determining whether a protective order should be modified, the court must balance the privacy interests of the parties against the public interest in access to the discovery information, but that here it was not apparent whether the court engaged in a balancing and thus it is unclear if the court abused its discretion in denying Professor Kuney’s motion to intervene and modify Protective Order. The Federal therefore returned the case to the district court for a balancing of the public and private interests in determining whether to grant or deny Professor Kuney’s motions.

The Reverse Doctrine of Equivalents is Rarely Applied

Roche Palo Alto LLC v. Apotex, Inc., [2008-1021] (July 9, 2008) [PROST, Michel, Hochberg] The Federal Circuit affirmed summary judgment that U.S> Patent No. 5,110,493 directed to a drug formulation for treatment of eye inflammation, is valid and infringed by the formulation covered by Apotex’s abbreviated new drug application (“ANDA”).
BRIEF: Plaintiff moved for summary judgment that defedant’s modified formula infringed, based upon the prior case between the parties in which the patent was found valid and infringed. Defendant countered by arguing that the modified formulation escapes infringement under the reverse doctrine of equivalents. LOF: non-infringement under the reverse doctrine of equivalents is a question of fact.
The reverse doctrine of equivalents is an equitable doctrine designed “to prevent unwarranted extension of the claims beyond a fair scope of the patentee’s invention.” While the patentee bears the burden of proving infringement, if the patentee establishes literal infringement, the burden shifts to the accused infringer to set forth a prima facie case of non-infringement under the reverse doctrine of equivalents. The Federal Circuit noted that the reverse doctrine of equivalents is rarely applied, and this court has never affirmed a finding of non-infringement under the reverse doctrine of equivalents. The Federal Circuit agreed with the district court that defendants failed to set forth a prima facie case of non-infringement under the reverse doctrine of equivalents because it did not properly establish the principle of the patent. The Federal Circuit said that the “principle” or “equitable scope of the claims” of the patented invention is determined in light of the specification, prosecution history, and the prior art.
On the issued of claim preclusion, the Federal Circuit said claim preclusion applies where: “(1) the same parties, or their privies, were involved in the prior litigation, (2) the prior litigation involved the same claim or cause of action as the later suit, and (3) the prior litigation was terminated by a final judgment on the merits.” The parties were the same, and the prior litigation resulted in a final judgment, so the issued was whether the litigation involved the same causes of action. The Federal Circuit said that the second suit is the “same claim” as in an earlier infringement suit if the accused products in the two suits are “essentially the same.” The Federal Circuit explained that accused products “are ‘essentially the same’ where the differences between them are merely ‘colorable’ or ‘unrelated to the limitations in the claim of the patent.’ The Federal Circuit agreed with the district court that as far as the claims in suit, the two products were not substantially different.