patent law update

Online CLE

Patent Law Update

1 General CLE credit ID 77990 (part of 75707)

From the Oregon State Bar CLE seminar Intellectual Property Review—Updates and Changes from 2020, presented on February 19, 2021

© 2021 Alexa Johnston, J. Christopher Carraway. All rights reserved.

Chapter 2

Presentation Slides: 2020 Patent Law ReviewAlexa Johnston

Klarquist Sparkman LLPPortland, Oregon

J. Christopher CarrawayKlarquist Sparkman LLP

Portland, Oregon

Chapter 2—Presentation Slides: 2020 Patent Law Review

2–iiIntellectual Property Review—Updates and Changes from 2020


2–1Intellectual Property Review—Updates and Changes from 2020

2020 Patent Law Review

Presented by:

February 19, 2021CHRIS CARRAWAY and ALEXA JOHNSTON

Overview

1. 2020 Case Law Developments

2. Pending Supreme Court Cases

3. Developments at the Patent Office

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Overview




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Thryv v. Click-to-Call (U.S. April 20,2020) (7-2)

Section 315(b):An inter partes review may not be instituted if the petition requesting the proceeding is filed more than 1 year after the date on which the petitioner, real party in interest, or privy of the petitioner is served with a complaint alleging infringement of the patent.

Section 314(d):The determination by the Director whether to institute an inter partes review under this section shall be final and nonappealable.

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Cuozzo (2016): § 314(d) precludes review of institution decision and “questions that are closely tied to the application and interpretation of statutes related to the Patent Office’s decision to initiate inter partes review”

Issue: Appealability of IPR institution decisions



Thryv v. Click-to-Call (U.S. April 20,2020) (7-2)

Holding (7-2, maj. of 5): Cuozzo controls; time bar of § 315 is “closely tied” to “the decision to initiate inter partes review”

Dissent (Gorsuch, joined in parts by Sotomayor): Attempts to limit judicial review should be strictly construed.

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C.R. Bard (Fed. Cir. Nov. 10, 2020)

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Issue: Does printed matter have patentable weight when it is not functionally related to other claim elements?

Fact(s): Claims require the presence of a radio-graphic marker identifying the claimed port as power-injectable. Bard argued that the printed matter added new functionality to the port because it makes the port “self-identifying” and that the physician performs the step “based on” such identification.



C.R. Bard (Fed. Cir. Nov. 10, 2020)

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Claim 1:

Holding: The printed matter has no functional weight because it is not structurally or functionally related to the claimed feature; nonetheless, the claims are patentable because not solely directed to the printed matter.

Section 101 and the Alice TestAlice Test:

1. Are the claims “directed to” a law of nature or natural phenomenon? (i.e., do they claim the discovery of the natural phenomenon itself?)

2. If yes, do the limitations of the claim apart from the natural phenomenon “transform the nature of the claim into a patent-eligible application”?

35 U.S.C. § 101:

Whoever invents or discovers any new and useful process, machine, manufacture, or composition of matter, or any new and useful improvement thereof, may obtain a patent therefor, subject to the conditions and requirements of this title.



Biogen (Fed. Cir. Sept. 28, 2020)

Issue: Is a recombinant version of a naturally occurring product made by a new process patent eligible under 35 USC §101?

Fact(s):• Claims directed to a method of treatment by administering a recombinant polypeptide

related to human interferon-β (IFN-β).• Natural, human produced interferon was prior art except that it was not produced by

the process described in the claim.

Holding:• The process by which a product is made has no patentable weight unless it affects the

structure of the product.• The recombinant nature of the product alone cannot confer novelty.

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Illumina v. Ariosa (Fed. Cir. March 17, 2020; Modified August 3, 2020)

Issue: Can method claims that exploit a natural phenomenon be patent eligible?

Fact(s): Claims are directed to a method of preparing DNA fragments that increase the relative ratios of maternal DNA and cffDNA in the sample.

Holding:• Claims directed to a method “that exploits the natural phenomenon” can be patent

eligible. • The claimed methods achieve more than simply observing that cffDNA is shorter, they

include steps that change the DNA ratios in the composition such that it is different from what occurs in nature.

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Illumina v. Ariosa (Fed. Cir. March 17, 2020; Modified August 3, 2020)

American Axle (Fed. Cir. May 8, 2020)

Issue: Are claims “directed to” a natural law (Hooke’s law) if they recite a result without reciting a particular way the result is achieved?

Fact(s):• Claim language= “tuning at least one liner to attenuate at least two types of vibration

transmitted through the shaft member”• D.Ct. held that the claim amounted to merely instructing one to apply Hooke’s law to

achieve a desired result (attenuation) without providing a particular way to do so.

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American Axle (Fed. Cir. May 8, 2020)

Holding:• Nothing in the claim qualifies as an

“inventive concept” to transform the claim into patent eligible subject matter.

• Claiming a desired functional result without explaining how to do it is not sufficient to serve as an inventive concept.

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Egenera (Fed. Cir. Aug. 28, 2020)

Issue: Does judicial estoppel prevent a previously removed inventor from being re-added using 35 USC § 256(b)?

Fact(s):• Egenera sued Cisco for infringement. Cisco filed an IPR. Egenera separately

petitioned the PTO to remove an inventor to get around prior art cited in the IPR.• “logic to modify” in the claim was interpreted as means-plus-function corresponding

to a tripartite LAN structure.• D. Ct. found that the removed inventor had been the one to invent the tripartite

structure and that Egenera was judicially estopped from re-adding the removed inventor.

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§ 256(b)PATENT VALID IF ERROR CORRECTED.—The error of omitting inventors or naming persons who are not inventors shall not invalidate the patent in which such error occurred if it can be corrected as provided in this section. The court before which such matter is called in question may order correction of the patent on notice and hearing of all parties concerned and the Director shall issue a certificate accordingly.


Holding:• “Error” in § 256(b) includes all mistakes—both honest and dishonest.• Judicial estoppel did not apply because Egenera’s earlier position in removing the

inventor was not ‘clearly inconsistent’ with their later position that he should be included.

• D. Ct’s interpretation that “Logic to modify” triggers 112(6/f) interpretation was correct because the phrase does not amount to “sufficient structure” for performing the function.

Takeaways:• If using 112(6/f) limitations, make sure listed inventors include inventors of any of

the ‘how’ steps included in the specification.

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Bio-Rad (Fed. Cir. August 3, 2020)

Issue: Can a comparable license theory of reasonable royalty damages insulate the patentee from doing an apportionment analysis?

Fact(s):• Bio-Rad sued 10X Genomics for infringement of 3 patents. Jury found infringement for

all 3 patents.• Bio-Rad argued that apportionment wasn’t necessary because under its comparable

license theory the royalty rate in the comparable license was applied to the entire revenue of the product comparable to the accused product.

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Bio-Rad (Fed. Cir. August 3, 2020)

Holding: • Fed. Cir. vacated the judgement of infringement on 2 of 3 patents, but affirmed the entirety

of the jury’s award—24 million in damages.• The jury’s verdict and instructions made clear that the award wasn’t divvied up by patent.• “No blanket rule of quantitative apportionment in every comparable license case.”

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GlaxoSmithKline (Fed. Cir. Oct. 2, 2020)

Issue: Can the maker of a drug induce infringement if they do not state the infringing use on their label?

Fact(s):• Patent claimed method of using carvedilol to treat congestive heart failure. Teva applied

for ANDA approval of a generic carvedilol, specifically omitting that use from its original application. Teva marketed their generic product as an equivalent of the branded product.

• Cardiologists testified that they knew the various uses of the generic before FDA required Teva to amend its label.

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GlaxoSmithKline (Fed. Cir. Oct. 2, 2020)

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Holding:• “When the provider of an identical product knows of and markets the same

product for intended direct infringing activity, the criteria of induced infringement are met”

• Marketing as an equivalent to the branded product implied the same potential uses.

Dissent: Skinny labels were designed specifically so that generic drugs could be marked for only non-infringing uses. No evidence found that Teva actually caused infringement via it’s label.



Eagle Pharma (Fed. Cir. May 8, 2020)

Issue: When does the disclosure/disclaimer rule bar infringement under the Doctrine of Equivalents (DOE)?

Fact(s):• Claim required “propylene glycol”; defendant’s drug used ethanol. • Patent owner argued that ethanol was equivalent• Patent described ethanol as an alternative to propylene glycol, but it was used in a

different embodiment (not what was claimed)

Holding: Described but unclaimed alternatives (even in the background and alternate embodiments) cannot be equivalents

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Two Cases on Patent Venue

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Patent Venue Statue (28 U.S.C. § 1400(b)

Any civil action for patent infringement may be brought in the judicial district:

[a] where the defendant resides, or

[b] where the defendant [i] has committed acts of infringement

and[ii] has a regular and established place

of business.

“Reside” Until 2017: personal jurisd’n

“Reside” Now: incorporation



In re: Google LLC (Fed. Cir. Feb. 13, 2020)

Issue: Is defendant’s server hosted in a third party’s datacenter sufficient as a “regular and established place of business” (REPB)?

Google: Several Google Global Cache (GGC) servers (local caches for Google’s data) were installed at ISP datacenters (not Google datacenters).

Holding:• REPB: “generally requires regular, physical presence of an employee or other agent of the

defendant conducting the defendant’s business at the alleged ‘place of business’”• Agent Activity: excludes “activities, such as maintenance, that are merely connected to, but

do not themselves constitute, the defendant’s conduct of business in the sense of production, storage, transport, and exchange of goods or services”

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Valeant (Fed. Cir. Nov. 5, 2020)

Issue: Where do “acts of infringement” occur for Abbreviated New Drug Application (ANDA) claims brought pursuant to the Hatch-Waxman Act?

Facts:• Mylan incorporated in West Virginia, submitted ANDA from there• Valeant sued in N.J., alleging that venue was proper because Mylan was “likely to sell the

generic product in New Jersey”

Holding: • Act of Infringement = submitting the ANDA to the FDA• Venue proper where defendant both has REPB and submitted the ANDA

• Not in all future locations of distribution of the generic product• Future questions: Where preparation acts occurred? Where ANDA received?

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Samsung (Fed. Cir. February 4, 2020)

Issues:1. Can the PTAB cancel claims challenged in an IPR for indefiniteness (35 U.S.C. § 112)? 2. Can the PTAB cancel claims under 35 U.S.C. § 102 (anticipation) or §

103(obviousness) if the claims are indefinite?

Facts:• In IPR, Samsung challenged claims under 35 U.S.C. §§ 102-103• PTAB: declined to decide whether claims were unpatentable because it concluded

that the claims were indefinite• Samsung: PTAB should have either cancelled the indefinite claims or assessed them

for anticipation/obviousness25

Samsung (Fed. Cir. February 4, 2020)

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Holdings:

1. PTAB lacks power to cancel claims for indefiniteness. IPRs only provide that claims can be cancelled under 102 or 103 grounds (35 USC § 311(b)).

2. If PTAB finds claims indefinite, it may or may not compare claims to prior art:• If PTAB “cannot ascertain the scope of a claim with reasonable certainty for

purposes of assessing patentability,” then should decline• If claims can be construed (but are still indefinite), PTAB may be able to apply

claims to prior art (e.g., IPXL indefiniteness)



ABS Global, Inc.(Fed. Cir. January 6, 2021)

Issue: Does an IPR petitioner have standing to appeal an IPR decision by PTAB after a final, not appealed judgment of non-infringement in district court?

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D. Court

PTAB

Complaint

IPRPetition

FWD

SJ-NI

No Appeal

Appeal

ABS Global, Inc.(Fed. Cir. January 6, 2021)

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Holding: • Challenger failed to establish that it had standing to appeal IPR decision.

• Challenger did not contend it had any concrete plans for a different product that might infringe.

Takeaway: If appealing an IPR loss where standing may be in question, argue in alternative for vacatur of PTAB FWD in event you are found to lack standing.



Overview




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Arthrex v. Smith & Nephew (Cert. Granted Oct. 13, 2020)

Issue: Are Administrative Patent Judges (APJs) of the PTAB appointed in a Constitutional manner?Facts:• APJs are appointed by Sec Commerce in consultation with PTO Director. • They serve on panels of (typically) three, deciding IPRs and other patent challengesFederal Circuit:• Because of a provision restricting their removal, APJs are “principal officers,” who

the Appointments Clause (II.2.2) requires to be appointed by the President and confirmed by the Senate, not “inferior officers”

• To remedy, Fed. Cir. severed portion of Patent Act restricting removal of APJs, thereby making them inferior officers.

• Vacated 100+ decisionsPossible Outcomes: Status quo, mild annoyance, or chaos.30



Minerva Surgical v. Hologic, Inc. (Cert. granted Jan. 8, 2021)

Issue: Is an assignor of a patent (or privy) estopped from raising an invalidity defense?Fact(s):• Inventor assigned patent rights then left and founded Minerva. • Hologic (assignee) sued Minerva for infringement• Minerva filed IPR• District court granted summary judgment that assignor estoppel precluded any

invalidity challenge by Minerva• PTAB canceled claims during IPR for unpatentability • Fed Cir. found assignor estoppel properly precluded validity challenge in district court

litigation but not in IPR proceeding• Cross cert petitions: one granted one deniedPrediction: Amici mostly opposing assignor estoppel; S.Ct. threw out licensee estoppel

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Other Potential Cases

American Axle Mfg. v. Neapco Holdings

Issue: Is the claim “directed to” a natural law (Hooke’s law)?

Fact(s): Claiming a desired result without explaining how to do it when the desired result is a natural law, means the claim is directed to the natural law.

Notes: This may be the vehicle that the Supreme Court uses to address 101. Federal Circuit voted 6-6 not to hear the case en banc.

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Idenix Pharma. v. Gilead Sciences

Issue: Do genus claims that encompass a large genus meet the enablement requirement?

Fact(s): Fed. Cir. ruled patent was invalid because it didn’t enable a person to make/use invention. Found non-enablement because the patent claims a genus that describes thousands of compounds, each of which would have to be screened.

Notes: Supreme Ct. may decline to take this case because it is deep in the weeds of patent law.



Overview




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PTAB: Discretionary Denial in Post-Grant Proceedings

Apple v Fintiv (PTAB March 20, 2020)

Issue: When should the PTAB deny institution based on parallel D. Ct. litigation?

Fintiv Factors:1. whether the district court likely to grant a stay (or already has);2. proximity of D. Ct. trial date to PTAB’s projected deadline for a final decision;3. investment in D. Ct. proceeding by the court and the parties;4. overlap of issues;

[NOTE: stipulation by petitioner may address concerns of duplicative effort]5. whether both PTAB and D. Ct. proceedings involve the same parties;6. other circumstances, including the merits and delay by petitioner.

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PTAB: Final Rule On Institution Of Trials

Published December 9, 2020Effective For All Petitions Filed On Or After January 8, 2021

• Eliminates presumption that genuine issues of fact resolved in petitioner’s favor at the institution stage

• New Rule: the Board will consider all evidence presented (including any testimony submitted by Patent Owner) in determining whether petitioner has shown a reasonable likelihood of establishing unpatentability

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PTAB: Final Rules On Motions To Amend

Published December 21, 2020Effective For All Petitions Filed On Or After January 20, 2021

• Burdens:• PO burden to show satisfaction of statutory and regulatory requirements• Petitioner burden to show unpatentability of any substitute claims

• Board, in “interests of justice,” may exercise discretion to decide MTA based on “readily identifiable and persuasive evidence of record”• Must give parties an opportunity to respond• Interests of justice a big factor; provides leeway when adversarial process

falters, e.g., petitioner stops litigating IPR due to settlement

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Consolidated Appropriations Act (COVID Relief Bill)

• Biological Product Patent Transparency

• Requires manufacturers of approved biological products to disclose and list any patents covering those products with the FDA.

• Similar to the Hatch-Waxman act requirements for small-molecule drugs.

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COVID-19-Related Rule Changes

• All PTAB proceedings conducted remotely.

• Prioritized Examination for COVID-19-related application filed by small and micro-entities.

• Fee waivers: Patent owners who were unable to reply to certain communications in time can petition to revive an abandoned application without needing to pay the fee.

• Does not grant wavier/extension of dates set by statute

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COVID-19-Related Rule Changes (Cont.)

• Waiver of Original Handwritten Signature Requirement• Previously a ‘wet’ signature was required for certain documents (relating to

practicing before the USPTO, disciplinary proceedings, or payments via credit card), now a copy of a handwritten signature of an S-Signature that meets the requirements of 37 CFR 1.4(d)(2) can be used.

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USPTO Director

• Director Iancu resigned on January 20, after serving since 2017.

• Drew Hirshfield currently interim USPTO Director.



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