Viewing post categorized under: Patent



February 7 / Blogs, Patent

Titans of Industry: The Frazier v. Ali of Patent Litigation

Abstract: The two largest individual shareholders in the smartphone industry, Samsung and Apple, have engaged in patent litigation that includes ten countries and millions of dollars in damages. Both companies have tried to get the other’s product pulled from the market with very limited success. In the United States, Apple, Inc. v. Samsung Electronics Co. has progressed all the way to the Supreme Court (“SCOTUS”). The SCOTUS has not heard a patent design case in 120 years which signals the increasing importance technology and its implications are playing in our society.

VIEW PDF

February 7 / Article, Patent

The Role of Patents in the Fight Against Superbugs: Are Patent Laws Discouraging Investment in Promising Superbug Treatments?

Abstract: Pharmaceutical companies invest significant resources in identifying and developing treatments for a variety of infectious diseases, including the current worldwide threat of superbugs. It is essential that these companies commercialize these treatments and recoup their investments. Therefore, as a policy matter, it is important to incentivize pharmaceutical companies to reap these financial rewards in order to motivate innovation and research. Patents provide an incentive—a twenty-year term of marketing exclusivity. However, as a result of the Mayo/Alice eligibility criteria that distinguish patent-ineligible laws of nature, natural phenomena, and abstract ideas from patentable inventions, the United States Patent and Trademark Office is likely to reject patents for many superbug treatments, such as antibiotics found in nature. Consequently, other methods of incentivizing the development of superbug treatments, such as delinkage mechanisms, may be necessary.

VIEW PDF

 

February 7 / Blogs, Patent

The Biologics Price Competition and Innovation Act: Commercial Marketing in the Spotlight

Abstract: The Biologics Price Competition and Innovation Act (BPCIA) was enacted by Congress in 2010 as part of the Affordable Care Act. The BPCIA was intended to help innovators and pharmaceutical drug developers by streamlining the regulation of biologics, much as the Hatch-Waxman Act of 1984 did with respect to small molecule generic drugs. Unlike the Hatch-Waxman Act however, which only covered small molecule generic drugs, the BPCIA regulates large molecule drugs with “no clinically meaningful difference” to the reference product. Biologics, under the BPCIA, are complex molecules such as viruses or therapeutic serums produced for the purpose of preventing, treating, or curing human diseases or conditions. In enacting the BPCIA, Congress sought to facilitate the development and marketing of biosimilars and increase competition amongst drug developers as well as provide a specific process for potential patent infringement claims. Biosimilars are biologics that are “highly similar” to a reference product with no clinically meaningful difference between the biosimilar and the reference product in terms of “safety, purity, and potency of the product.” Recognizing biosimilars as a separate class of products allows drug development companies to produce a drug that is clinically equivalent to a drug already patented and on the market, thus spurring innovation and competition between drug developers and pharmaceutical companies. Because the biosimilar has a reference drug, under the BPCIA, the developer of the biosimilar is able to use clinical data already collected for the reference drug and apply that data for approval from the FDA for their biosimilar. Since the biosimilar developer, referred to as a subsection (k) applicant in 42 USC § 262, does not have to compile its own clinical data regarding the safety, purity, and potency of its drug, the path towards FDA approval is consequently faster, more certain, and less expensive. However, as a result of this streamlined process, the BPCIA also raises issues involving patent infringement and patent litigation, as several cases have been filed primarily concerning the interpretation of the BPCIA and its specific biosimilar approval process requirements.

VIEW PDF

March 31 / Blogs, Patent

Antitrust Issues in Reverse Payment Settlements: A Case Study

Abstract: Drug manufacturers often spend millions on research and development for drugs that never make it to market. As a result, manufacturers need to recoup these R&D costs in th
e sale of drugs that do make it to market. They often rely on the patent system, and the exclusivity it provides, to accomplish that recoupment. Drug manufacturers have turned to reverse payment settlements to extend that exclusivity and generate higher profits from a particular drug. Reverse payment settlements arise in the context of generic drugs. A patentee will offer to pay a generic manufacturer, an alleged infringer, to delay the release of the generic drug to the market. The payment is a purchase by the patentee to continue its exclusive right to sell its product; a right it already holds by virtue of the patent. For this reason, the practice is suspect of antitrust violations. In Federal Trade Commission v. Actavis, Inc., the Federal Trade Commission (FTC) filed a complaint alleging that reverse settlement payments were unfair restraints of trade and therefore violated federal antitrust laws. The Supreme Court held that reverse payment settlements in patent infringement litigation are not presumptively unlawful but can sometimes violate antitrust laws, to be determined on a case-by-case basis.The settlements are not immune from antitrust attack even if the agreement’s anticompetitive effects fell within the scope of the exclusionary potential of the patent.

VIEW PDF

March 31 / Article, Patent

Awarding Enhanced Damages in Patent Infringement Cases

Abstract: This term the Supreme Court will take up the issue of awarding enhanced damages in patent infringement cases. Two separate cases petitioned the court to take up the issue after defendants were spared enhanced damages following some questionable activity. The current test used in awarding enhanced damages is a two-part test implemented by the Federal Circuit that incorporates an objective and subjective componentThis article will look at the test that is currently implemented, the cases at issue, and the arguments on both sides.

VIEW PDF

March 31 / Blogs, Patent

Deference Runs Deep: The Ill Effects of Alice

Abstract: Under 35 U.S.C §101, a patent must be either a new and useful process, machine, manufacture, or composition of matter and, thus, must not lay claim to any idea that isabstract. This abstraction can be increasingly difficult to eliminate when drafting software claims because the implementation of code onto a generic computer is somewhat abstract in nature. Areas of software that are, and are not, abstract have been hotly debated and a thorn in the side of court system. Hence, when Justice Thomas opined that the Supreme Court “need not labor to delimit the precise contours of the ‘abstract ideas’ category” in Alice Corp. Pty. Ltd. v. CLS Bank Intern., he must have realized that abstaining from such a seminal issue would create ripples, if not waves, within the already confusing realm of software patents. Almost two years later, the United States Patent and Trademark Office (“USPTO”) and the Federal Circuit are still failing to distinguish a bright-line rule for such a vague category, and, therefore, the concept of an abstract idea is still an issue. If this is not resolved quickly and clearly through the Federal Circuit or Supreme Court, or even through a legislative action by Congress, software patents will assuredly diminish in number and patent persecutors will continue to draft with uncertainty.

VIEW PDF

 

February 21 / Blogs, Other Intellectual Property, Patent

Data Exclusivity for Biologic Drugs: the TPP’s Potential Poison Pill?

Abstract: On October 5, 2015, after many years of secretive negotiations, the US government with 11 other countries across the Asia-Pacific and Latin America reached an agreement on the largest free-trade deal in history, the Trans-Pacific Partnership (TPP). Addressing everything from wildlife conservation and tax reductions for agriculture, to the free flow of information on the Internet and intellectual-property rights for movies and pharmaceutical drugs, this far-reaching agreement has the potential to impact up to one-third of world trade. One of the most contentious parts of the agreement involves intellectual property rights of pharma companies to data exclusivity for biologics, a hot and promising type of pharmaceutical derived from living organisms.

VIEW PDF

 

February 9 / Patent, Trade Secret

Federal Circuit reviews the $1.5 billion judgment against Marvell

INTRODUCTION

In 2009, Carnegie Mellon University sued Marvell for infringement of U.S. Patent Nos. 6,201,839 and 6,438,180, relating to methods that reduce “noise” in magnetic recording systems.[1] The jury found that Marvell was in fact selling infringing, semiconductor products both domestically and abroad.[2] The jury awarded $1.17 billion in damages to Carnegie Mellon University, corresponding to 50 cents for each product sold.[3] Soon thereafter, the judge added $287 million in enhanced damages for willful infringement. The total judgment was $1.54 billion[4]; the largest judgment in the history of patent law. Marvell appealed.

On appeal, Marvell argued that the royalty rate was too high and should not have been applied to products sold outside of the United States.[5] On August 4, 2015, the Federal Circuit affirmed the judgment of infringement and validity; reversed the grant of enhanced damages; and vacated in part and remanded the royalty award.[6]

Analysis

The Federal Circuit threw out the enhanced damages under the governing willfulness standard.[7] Statute states “the court may increase the damages up to three times the amount found or assessed” upon proof of willfulness.[8] Willfulness requires “clear and convincing evidence that the infringer acted despite an objectively high likelihood that its actions constituted infringement of a valid patent” and “this objectively defined risk…was either known or so obvious that it should have been known.”[9]

In the instant case, Marvell’s defense to the infringement claims was “objectively reasonable” so the burden of proof for willfulness was not met.[10] In its defense, Marvell argued there was an invalidating prior art reference.[11] The Federal Circuit held there was uncertainty regarding what the reference disclosed such that the invalidity defense was objectively reasonable, though ultimately rejected.[12]

The Federal Circuit left $278.4 million in damages in tact because Marvell must pay royalties on the products that were imported and sold in the United States.[13] However, the award was vacated in part due to an issue of extraterritoriality.[14] Marvell had argued that the court cannot measure damages based on the total number of products sold worldwide; damages are calculated relative to the number of products sold in the United States.[15] The Federal Circuit agreed and ordered a new trial to recalculate the damages on products that were not imported into the United States.[16]

Statute mandates that anyone who “uses, offers to sell, or sells any patent invention, within the United States or imports into the United States any patented invention during the term of the patent therefor, infringes the patent”.[17] Thus, the court must determine whether any of the activities listed in § 271(a) occurred in the United States.[18] For example, there was some evidence that Marvell had designed, tested, and marketed the infringing products in the United States.[19] Many of Marvell’s investors were companies based in the United States, including Google Inc., Microsoft Corp., and Broadcom Corp.[20] There was also evidence suggesting that Marvell made contractual commitments for specific volumes of products, signed in the United States.[21]

Implications

The day the Federal Circuit issued its opinion, Marvell shares dropped 2.4 percent in Nasdaq.[22] There will likely be a settlement between Marvell and Carnegie Mellon University because it is too expensive for either party to continue litigation.[23] It would be financially favorable for Marvell to license the technology from the university.

The outcome of this case is significant because domestic companies will now take extra measures to insulate foreign sales from United States patent law.[24] Domestic companies may be encouraged to move their design, testing, and marketing activities outside of the United States.[25] Alternatively, domestic companies may conduct all contract negotiations outside of the United States.[26]

[1] See Carnegie Mellon University v. Marvell Technology Group Ltd., 14-1492, *10, U.S. Court of Appeals for the Federal Circuit (Washington), https://www.bloomberglaw.com/document/X1Q6NDHQ1182/.

[2] See id. at *11.

[3] Id.

[4] Id. at *3.

[5] Id. at *11.

[6] Id. at *3.

[7] Id.

[8] 35 USC § 284

[9] Carnegie Mellon University, supra at *24 (quoting In re Seagate Tech., LLC, 497 F.3d 1360, 1371 (Fed. Cir. 2007)(en banc)).

[10] Id. at *25.

[11] Id. at *27.

[12] Id.

[13] Id. at *4.

[14] Id.

[15] See id. at *40.

[16] See id. at *38.

[17] 35 USC  § 271(a).

[18] Carnegie Mellon University, supra at *38.

[19] Id. at *15.

[20] Susan Decker, Marvell Gets Reduced Damages in $1.17 Billion Patent Verdict (2), BLOOMBERG NEWS ENTERPRISE, (August 4, 2015, 11:53 AM), https://www.bloomberglaw.com/ip_law/document/NSKETL6KLVRG/.

[21] Carnegie Mellon University, supra at *33.

[22] Jonathan Stempel, Marvell Technology wins cut in $1.54 billion Carnegie Mellon patent award, REUTERS, (August 4, 2015, 1:43 PM), http://www.reuters.com/article/2015/08/04/us-marvell-technlgy-carnegiemellon-idUSKCN0Q91K220150804/.

[23] See Decker, supra.

[24] See id.

[25] See id.

[26] See id.

February 9 / Patent

“Cross-checking” as a Claim Construction Strategy

The Supreme Court has long held that claim construction is a question of law reserved for the court.[1] During claim construction, the proper meaning of a term is construed from the intrinsic evidence and, when appropriate, extrinsic evidence.[2] The intrinsic evidence includes the claims, the specification, and the prosecution history.[3] The weight of the intrinsic evidence is often determinative. Therefore, a patent attorney should maintain a consistent claim construction strategy from the start of prosecution. This strategy should encompass the full scope of the invention. Otherwise, the patent owner will have little protection against infringers.

One helpful strategy is “cross-checking” the list of features. For example, features A and B can both be implemented via X. However, feature A can also be implemented via Y. Therefore, it is important to cross-check whether B can also be implemented via Y. The inventor and the patent attorney should work together, at the start of prosecution, to identify all the features and all the ways each feature can be implemented. Then, cross-checking can be performed.

Failure to cross-check the list of features may result in a narrow claim interpretation, as shown in Intellectual Ventures I LLC v. Capital One Bank.[4] On June 19, 2013, Intellectual Ventures sued Capital One Bank for infringement of U.S. Patent No. 7,260,587 (the ‘587 Patent) which relates to a method of organizing digital images.[5] In the simplest embodiment, hard-copy prints are placed into a desired order. A machine readable instruction form is placed in front of the hard-copy prints. The instruction form is scanned to identify one or more categories associated with the hard-copy prints, e.g., “vacation 1999.” The hard-copy prints are scanned to obtain the digital images. The digital images are manipulated such that each digital image is associated with the one or more categories, according to the instruction form.[6] This allows the user to organize and easily search for specific images.[7]

Claim 1 of the ‘587 Patent recites “digitally scanning a plurality of hard copy prints [that have been grouped into one or more categories, each category separated by] an associated machine readable instruction form”.[8] Capital One Bank argued non-infringement on the basis that the claimed method required a hard-copy instruction form which Capital One Bank did not practice.[9] Intellectual Ventures argued that there was no requirement that the instruction form be in a hard-copy format.[10] The District Court construed the terms “machine readable instruction form” to require a hard-copy format, rather than an electronic format.[11] The parties stipulated there was no infringement.[12] Intellectual Ventures appealed.

On appeal, the Federal Circuit reviewed the District Court’s claim construction de novo and ultimately affirmed that the “machine readable instruction form” must be in a hard-copy format based on the intrinsic evidence.[13] First, the claim language suggests the machine readable instruction form must be in a hard-copy format to physically separate the categories of hard-copy prints before scanning.[14] Second, the specification of the ‘587 Patent consistently describes the machine readable instruction form as a hard-copy document, and there are no examples of the machine readable instruction form being anything other than a hard-copy document.[15] The provided examples describe that instructions are written on a machine readable instruction form, the machine readable instruction form is physically placed in an envelope with the hard-copy prints, and the machine readable instruction form is then physically placed in front of the hard-copy prints before scanning. Third, during prosecution, in response to an office action, the Applicant argued that the instructions are digitally scanned, stating that this was “clearly a physical step.”[16] Therefore, the patentee did not maintain a consistent claim construction strategy in prosecution and litigation.

Here, the patentee should have used varied examples to show different embodiments of the feature at issue. The patentee also should have performed cross-checking. In fact, the specification discussed another feature of the invention (the user instructions, i.e. how to use the method generally) that could be in audio or visual format.[17] The court believed this discussion showed the patentee could have discussed the feature at issue (the machine readable instruction form) also being in audio or visual format. [18]

In this instance, the patentee would have benefitted from cross-checking feature A (i.e. the user instructions) and feature B (i.e. the machine readable instruction form.) Feature A can be implemented via X (i.e. hard-copy format), Y (i.e. audio format), and Z (i.e. visual format). Feature B can be implemented via X. Therefore, the patentee should have cross-checked whether feature B can also be implemented via Y and Z. Then, the patentee would have been motivated to use more varied examples to describe the different ways each feature can be implemented via Y and Z. The patentee also would have maintained a consistent claim construction strategy in prosecution and litigation.

Thus, at the start of prosecution, the patent attorney should discuss different embodiments with the inventor and cross-check the list of features. This strategy will help identify whether claim limitations can be met physically versus electronically for the purposes of litigation.

[1] Markman v. Westview Instruments, 517 U.S. 370, 391, 116 S.Ct. 1384, 1396 (1996).

[2] Phillips v. AWH Corp., 415 F.3d 1303 (Fed. Cir. 2005)(en banc).

[3] See id. at 1314.

[4] See Intellectual Ventures I LLC v. Capital One Bank (USA), 2015 U.S. App. LEXIS 11537, *2 (Fed. Cir. July 6, 2015).

[5] Id. at *3.

[6] U.S. Patent No. 7,260,587, col. 2 ll.11-32.

[7] Id. at col. 5 ll.50-53.

[8] U.S. Patent No. 7,260,587, claim 1.

[9] Intellectual Ventures I LLC v. Capital One Bank (USA), 2015 U.S. App. LEXIS 11537, *16 (Fed. Cir. July 6, 2015).

[10] Id.

[11] Id.

[12] Id. at *4.

[13] Id. at *2.

[14] Id. at *16.

[15] Id. at *17.

[16] Id. at *18.

[17] Id. at *17.

[18] Id.

February 9 / Article, Patent

A Review of the Modern IPR Process

Abstract: In the pharmaceutical industry, patents protect a drug-maker’s right to exclusively produce a drug or issue a license for its production by another entity. In either instance they have the ability to control distribution and, more importantly, the cost. This exclusivity exists until the time the
patent term expires, at which point other manufacturers can begin producing a generic versions of the drug. Production of generic drugs significantly cuts the market share of brand name drug as well as drives down the overall cost of the drug. This makes patent protection a big concern for pharmaceutical companies spending years and billions of dollars in drug development. Once a patent is issued for a drug there is still a chance that the validity of the patent may be challenged. One such way a purported infringer or competitor can challenge a patent’s validity is through an inter partes review (IPR) Process allowed by the United States Patent and Trademark Office (USPTO). Until recently the use of this process by generic drug-makers to invalidate patents has had no success. However, a recent decision by the Patent Trial and Appeal Board (PTAB) gave generic drug-makers their first break when they invalidated the patent for the multiple sclerosis drug Gilenya. The following will review the IPR process and examine the decision by the PTAB to invalidate the Gilenya patent under 35 U.S.C §103.

VIEW PDF