Just When you Thought it Couldn’t Get Worse (for Patentees)

This post is nominally about the recent CAFC decision in Tyco Healthcare Group LP v. Mutual Pharmaceutical Co.   

In a broader sense it is about the demonization of patents, patentees, and infringement suits which involve assertion of patent rights.

The Tyco case revolves around submission of an Abbreviated New  

Drug Application (ANDA) by Mutual Pharmaceutical for 

Temazepam (RESTORIL). Tyco holds the patent rights for Restoril, 

following acquisition of related patents from Sandoz in 2001.

The infringement suit is brought under the Hatch-Waxman Act (35 U.S.C. §271(e)(2)(A)) which states that:

It shall be an act of infringement to submit-

(A)          An application under section 505(j) of the Federal Dood, Drug and Cosmetic Act or described in Section 505(b)(2) of such act for a drug claimed in a patent or the use of which is claimed in a patent…”

As one might expect, Mutual Pharmaceutical says they are not infringing because the drug which is the subject of the ANDA has certain physical properties (specific surface area) which render it non-infringing.

The unexpected additional aspect of this case is that Mutual Pharmaceutical filed counterclaims alleging several different types of antitrust violations. 

A patentee is generally exempt from antitrust allegations associated with infringement litigation under a principle known as “Noerr-Pennington” immunity. Noerr-Pennington immunity applies unless the litigation is a sham. 

Sham litigation is defined by a two prong test:

(a)    The suit must be objectively baseless; and

(b)    The suit must be subjectively brought to interfere with a competitor’s business relationships.

Both prongs (a) and (b) must be met to remove the immunity.

The district court for the district of New Jersey held that Tyco did not violate the antitrust laws by filing suit against Mutual Pharmaceutical or by filing a “citizen petition” with the Food and Drug Administration (“FDA”) seeking to bar Mutual from obtaining FDA permission to market its generic version of Temazepam. 

The CAFC affirmed in part, vacated in part, and remanded to the district court. The panel included Judges Newman, Bryson and Moore.

Relevant Technology:

The patents asserted by Tyco all claimed Temazepam formulations with specific surface areas (SSA) between 0.65 and 1.1 square meters per gram (m²/g).  SSA is measured using the Bruanauer, Emmet, and Teller  (B.E.T.) gas-adsorption technique. B.E.T. measures the amount of an adsorbate gas bound to the surface of the particles. Prior to measurement, the sample is by prepared by outgassing to remove any gas or vapor from the particle surface.  If the outgassing temperature  is too high, it physically alters the test material (e.g. by softening or melting it). If the outgassing temperature  is too too low, the test material may not be free of all of the gas or vapor, resulting in less surface area available for the adsorbate gas and a lower B.E.T. reading.

Infringement:

Mutual’s ANDA represented that the ANDA product would have a specific surface area of not less than 2.2 m²/g, thereby taking it outside the scope of the claims. 

Mutual uses an outgassing temperature of 40°C, rather than the 105°C that Tyco used in all of its tests. 

Neither party disputed that the specific surface area of Mutual's ANDA product would fall within the infringing range using an outgassing temperature of 105°C. 

Instead, Mutual alleged that its material was physically altered by such temperatures, resulting in larger particles and decreased specific surface area. 

District court decision:

The District Court found that Mutual’s ANDA product would not infringe Tyco’s claims on August 4, 2009.

The District Court granted summary judgment that the claims at issue were invalid as obvious on May 10, 2010.

As to the antitrust counterclaims, the district court ruled that there was no antitrust violation. It is this antitrust ruling that is appealed to the CAFC.

Citizen petition with the FDA

Tyco filed a citizen petition with the FDA asking that criteria for evaluating bioequivalence of generic temazepam products be heightened in view of Mutual's representation to the Court that its drug particles are different than those which had already been approved as safe and effective by agency.  The petition was denied and the ANDA was approved.

This citizen petition became grounds for an antitrust counterclaim by Mutual.

Antitrust Counterclaims

Mutual Pharmaceutical made the following antitrust counterclaims:

(a)   Tyco's infringement suit was sham litigation;

(b)   Tyco lacked any reasonable prospect of successfully defending the validity of the patents;

(c)  the citizen petition filed by Tyco with the FDA was a sham which negates Noerr-Pennington immunity; and

(d)   The patents in suit were obtained by fraud therefore subject to antitrust sanctions according to Walker Process Equipment, Inc. v. Food Machinery & Chemical Corp., 382 U.S. 172 (1965)

The Majority opinion, authored by Judge Bryson

In the interest of brevity the detailed legal analyses for each of points (a)-(d) are omitted, although it is recommended that those who are more than casually interested read the full decision.

The CAFC affirmed the judgement of the district court with regard to points (b) and (d).

However, with regard to point (a), the CAFC “...vacate[d] the summary judgment that Tyco’s infringement claims were not a sham and remand[ed] for further proceedings on that issue, with particular attention to the effect of the differences in outgassing temperatures on the specific surface area of Mutual’s product. “

In regard to point  (c), the CAFC “...vacate[d] the summary judgment that Tyco’s citizen petition to the FDA was not a sham and remand[ed] for further proceedings, including a determination as to whether the citizen petition caused any injury to Mutual in the form of a delay in the approval of Mutual’s ANDA.”

The Newman dissent

Judge Newnan begins the dissenting opinion by stating that the Majority Opinion has created “several new grounds of antitrust Liability”.

The dissent’s preface states:

“My colleagues search for a Sherman Act violation in the evidence concerning how surface area measurement is affected by outgassing temperature.  Such an issue does not convert routine patent litigation into an antitrust cause.  And by remanding for determination of antitrust injury based on Tyco’s report to the FDA, this court holds that such communication can violate antitrust law.”

The dissent’s conclusion points out that :

“The intrusion of antitrust issues into routine patent cases has been controlled in precedent.  See FilmTec, 67 F.3d at 938 (“As noted, the Supreme Court has forbidden us to equate loss on the merits with objective unreasonableness.”). My colleagues now hold otherwise...”

Most interestingly, the dissent includes the following prophetic statement:

“The only thing that is clear is that it will be the rare patent suit that will not include assertions of Sherman Act violation patterned on the court’s theories today.”

Perhaps this statement is an allusion to Ambry Genetics recent  Sherman antitrust counterclaim against Myriad genetics in a case currently being heard in the District court in Utah.

Or perhaps the statement is an allusion to the pre-Therasense use of an inequitable conduct defense "...the routine invocation of inequitable conduct in patent litigation has had adverse ramifications  ..." (Therasense v Becton Dickinson CAFC en-banc 2011) which led to the adoption of the but-for standard of materiality. Ironically, one of the antitrust counterclaims put forward by Mutual in this case is based upon an inequitable conduct allegation.

Pulling Your Chestnuts Out of the Fire

It is an important tenet of Patent Law that the original claims are part of the application specification. In the United States that tenet was put to use by the CAFC in ScriptPro LLC v. Innovation Associates, Inc.

The case involved alleged infringement of US 6910601 by Innovation Associates (note that there is a reexamination certificate which is only available in the PDF version of the patent under “images”).

ScriptPro originally filed suit in October 2006 in the District court for the District of Kansas.  Innovation Associates filed a request for inter partes reexamination at the USPTO on August 17, 2007 (the reexamination request is available from PAIR if you look at the continuity data tab in US 6910601) in which they alleged invalidity for one or more of a multitude of “substantial new questions of patentability” according to §§ 102 and 103 based upon numerous references which were either not of record, or not actually employed in formulating a rejection, during the original examination.

The District court for the District of Kansas stayed their own proceedings during the USPTO proceedings, which ended on January 4, 2011. The USPTO confirmed the validity of independent claims 1 and 8 with minor amendments which have no bearing on the subsequent court proceedings.

Each of independent claims 1 and 8 are directed towards a “collating unit” which stores prescription [drug] containers in slots, with prescriptions belonging to a single patient being grouped together in the same slot.  Neither claim 1 nor claim 8 includes “sensors” as an element, although dependent claims 7 and 9 recite sensors and explain their relationship to base claims 1 and 8 respectively.

A third independent claim (13) recites sensors, but was not asserted against Innovation Associates.

Innovation Associates, following an unsuccessful three year attempt to invalidate the patent at the USPTO, asserted new grounds of invalidity at the District court. The alleged infringer pleaded that claims 1 and 8 of the patent in suit were invalid as lacking written description according to § 112; first paragraph (§ 112(a) in the AIA).

The District court granted summary judgment for Innovation Associates on June 26, 2012 (slightly less than 6 years after the suit was filed), holding that asserted claims 1 and 8 were invalid under 35 U.S.C. § 112, first paragraph, which requires, for a claim to be valid, that the patent’s specification describe the subject matter defined by the claim. The court rested its holding on a single conclusion- that the specification describes a machine containing “sensors,” whereas the claims at issue claim a machine that need not have “sensors.”

Upon deciding the case, the CAFC noted that “The claims included in the original application issued without change.” and that “Some additional language was added to claims 1, 2, and 4 (but not to claim 8) when the claims were reexamined, but no party has suggested that the amendments bear on the issue currently before us.

In light of these facts, the CAFC took a narrow view of its role as arbiter:

We have a narrow issue: whether the absence of sensors from the claims at issue means that those claims are unsupported by the written description as a matter of law.

The CAFC notes:

“…the starting point is that the specification’s description of  embodiments having sensors for providing information about slot allocations and availability does not necessarily mean that the only described invention is a collating unit with such sensors. It is common, and often permissible, for particular claims to pick out a subset of the full range of described features, omitting others.  E.g., Crown  Packaging, 635 F.3d at 1380-81; Revolution Eyewear, Inc. v. Aspex Eyewear, Inc., 563 F.3d 1358, 1366-67 (Fed. Cir. 2009); cf. Phillips v. AWH Corp., 415 F.3d 1303, 1326-27 (Fed. Cir. 2005).  A specification can adequately communicate to a skilled artisan that the patentee invented not just the combination of all identified features but combinations of only some of those features (subcombinations) - which may achieve stated purposes even without omitted features.

The specification in this case does not preclude that result as a matter of law. ScriptPro could establish that the written description conveys to the relevant skilled artisan that “the inventor[s] actually invented the invention claimed” in claims 1, 2, 4, and 8.  Ariad Pharm., Inc. v. Eli Lilly & Co., 598 F.3d 1336, 1351 (Fed. Cir. 2010). There is no sufficiently clear language in the specification that limits the invention to a collating unit with the (slotchecking) sensors. And considering what the specification does say, and what ScriptPro highlights as a central purpose of the claimed advance in technology, it cannot be said as a matter of law that claims 1, 2, 4, and 8 have a scope incommensurate with what is described as the invention.

The CAFC then undertakes a review of all the places in the specification that describe the “sensors” and explains why the specification does not indicate that they are required.

As an Example:

According to the specification, “[t]he collating unit of the present invention broadly  includes” several components: “an infeed conveyor, a base, a collating unit conveyor, a frame, a plurality of holding areas, a plurality of guide arms, a plurality of sensors, and a control system.” Id. at col. 4, lines 26-29

When followed by a list of individual components of the subject preceding “broadly includes,” however, the phrase, which is unusual, does not plainly convey such an absolute meaning.  Indeed, a less than absolute meaning tends to be suggested by the very fact that the word “broadly” has been included: what is the word doing in the phrase if not to moderate an otherwise straightforward assertion that the inventive collating unit “includes” the enumerated items?  We conclude that the “broadly includes”/“broadly comprises” phrases are less than a clear statement of limitation that a skilled artisan, if being reasonable, would have to read as requiring the slot sensors at issue.

Near the end of the decision, the CAFC explicitly states the tenet that began this posting:

We note one last point: as originally filed, the application that matured into the ’601 patent had claims that did not include a requirement of sensors.  When a specification is ambiguous about which of several features are stand-alone inventions, the original claims can help resolve the ambiguity, though even original claims may be insufficient as descriptions or be insufficiently supported by the rest of the specification.  See Crown Packaging, 635 F.3d at 1380 (“Original claims are part of the specification and in many cases will satisfy the written description requirement.”)  (emphasis added); LizardTech, Inc. v. Earth Res. Mapping, Inc., 424 F.3d 1336, 1346 (Fed. Cir. 2005) (noting “that an originally filed claim can provide the requisite written description to satisfy section 112,” but holding that “nothing in claim 21 or the specification constitutes an adequate and enabling description” despite the fact that “claim 21 is part of the original disclosure”). Here, original claims omit a sensor requirement, an omission that fits the bases in the specification for deeming sensors to be merely optional.

Therefore, on August 6, 2014, the CAFC reversed the District court’s grant of Summary judgment and remanded for trial.

There are a couple of take home messages here:

First, the accused infringer was able to delay the start of any legal evaluation of whether their activities actually infringe the claims by nearly eight years. If they are eventually found to infringe, the patentee will want to say that any infringement after the time the suit was initiated (October 2006) was willful and should be punished by treble damages. The alleged infringer will respond that throughout the reexamination at the USPTO, the proceedings leading to summary judgment in the district court and the appeal to the CAFC they held a bona fide belief that the claims at issue were invalid. It seems likely that Innovation Associates is even now having an opinion of counsel prepared to support a future assertion that any infringing activity conducted after the CAFC decision was not willful either.

Second, it is always a good idea to describe things as “optional” or occurring “in some embodiments”. Explicit statements to that effect in the specification might have prevented the summary judgment at the district court and saved the time and expense associated with an appeal to the CAFC.

In the meantime, I salute the counsel for Innovation Associates. Delaying the beginning of any meaningful inquiry into what their client actually does and whether or not it constitutes infringing activity is a significant accomplishment, regardless of the final outcome of this case. One can only wonder whether there will be a request for certiorari here to buy even more time.

Patel, obviousness of ranges and unexpected results

We are all used to seeing the Supreme Court reverse the CAFC. This posting is about a case where the Examiner rejected the claims as obvious according to §103(a), the PTAB upheld the Examiner’s decision and the CAFC reversed the PTAB.

The case at issue is 11/578646 by Patel et al. The PTAB decision can be found in PAIR and the CAFC decision can be found here. Neither the PTAB nor the CAFC marked their decision as being precedential.

Claim 1 is directed towards:

A nonwoven material comprised of fibers having a surface comprising a polyethylene, said fibers being selected from the group consisting of monocomponent fibers, bicomponent fibers or mixtures thereof, said nonwoven material having a fuzz/abrasion less than or equal to 0.0214(BW)+0.2714 mg/cm² when the material comprises monocomponent fibers and said nonwoven material having a fuzz/abrasion less than or equal to 0.0071 (BW)+0.4071 mg/cm² when the material consists of bicomponent fibers, wherein the fibers are from 0.1 to 50 denier and comprise a polymer blend, wherein the polymer blend comprises:

a. from 26 weight percent to 80 weight percent (by weight of the polymer blend) of a first polymer which is a homogeneous ethylene/a-olefin interpolymer having:

i. a melt index of from about 1 to about 1000 grams/10 minutes, and

ii. a density of from 0.915 to 0.950 grams/centimeter³, and

b. from 74 to 20 percent by weight of a second polymer which is an ethylene homopolymer or an ethylene/a-olefin interpolymer having:

i. a melt index of from about 1 to about 1000 grams/10 minutes, and ii. a density which is at least 0.01 grams/centimeter³ greater than the density of the first polymer

 wherein the overall melt index of the polymer blend is greater than 18 grams/10 min.

The two underlined features were at issue.

As regards the feature a density of from 0.915 to 0.950 grams/centimeter³ the Examiner cited Maugans (US 6,015,617) in view of Ouederni (US 2003/0003830). The Examiner was un-persuaded by Applicant’s arguments that their example 11 show unexpected results for the claimed density which were sufficient to establish non-obviousness of the feature even though the claimed ranges overlapped with the 0.850 to 0.950 range taught by Maugans .

As regards the feature from 26 weight percent to 80 weight percent the Examiner cited Maugans which disclosed a range of 0.5 to 25 weight percent and, in the Examiner’s opinion “...a patently distinguishable difference between 25 and 26 weight percentage does not exist…it would be obvious to one having ordinary skill in the art to vary the amount …to achieve a desirable balance of properties.”

The PTAB agreed with the Examiner on both points.

Specifically, the PTAB held that:

“Appellants have not adequately explained why the alleged improvement shown therein is considered significant and unexpected relative to the closest prior art, Maugans.” And that “… Appellants failed to show: (1) “why the evidence relied upon is reasonably commensurate in the scope with the claims” and (2) “why this limited evidence is representative of the scope of protection sought by the claimed invention covering various compositions having densities outside of that specified in the Example [11].” for the density feature; and that

“[s]ince 25 wt. % and 26 wt. % are so close in value, a person of ordinary skill in the art would have reasonably expected a blend comprising either 25 wt. % or 26 wt. % of the homogeneously branched component to have the same or similar properties.” for the density feature.

The CAFC chose to deal with the weight percentage issue first:

“The key issue is whether the Maugans reference, disclosing a range of 0.5 to 25 weight percent, can establish a prima facie case of obviousness over the claimed range of 26 to 80 weight percent of the first polymer. We agree with Appellants that the examiner failed to establish a prima facie case of obviousness because the ranges do not overlap and the prior art does not teach that a broader range would be appropriate.”

This conclusion was based upon what the CAFC perceived as misinterpretation (by the PTAB) of its own precedents concerning obviousness of ranges in three different decisions.

The court summarized how those precedents should properly be interpreted:

In In re Woodruff, this court affirmed an obviousness rejection by the Board of Patent Appeals and Interferences (“BPAI”) for a process for inhibiting the growth of fungi. 919 F.2d at 1575. The process discussed maintaining a modified gaseous atmosphere at specific percentages by volume. Id. at 1575–76. While the majority of the ranges were clearly found in the prior art, the prior art reference disclosed “about 1-5%” carbon monoxide whereas the claim limitation required “>5-25%” carbon monoxide. Id. at 1576. The court found that the prior art range and the claimed range overlapped because the statement “about 1-5% does allow for concentrations slightly above 5%,” which established a prima facie case of obviousness. Id. at 1577 (emphasis added). Consequently, the court in In re Woodruff only addressed a prima facie case of obviousness for ranges that overlap. In re Woodruff says nothing about a situation where no overlap in ranges exists.

In Titanium Metals, claim 3 disclosed an alloy having 0.3% Molybdenum (“Mo”) and 0.8% Nickel (“Ni”). The court found that claim obvious over prior art which disclosed two alloys having the following characteristics: (1) 0.25% Mo with 0.75% Ni, and (2) 0.31% Mo with 0.94% Ni. Titanium Metals, 778 F.2d at 782–83. While it is true that, in finding the claim obvious, the court stated that “[t]he proportions are so close that prima facie one skilled in the art would have expected them to have the same

properties,” id. at 783, the facts of the case put that comment in context. The claims and prior art in Titanium Metals disclosed single points, not ranges, and the claimed amount fell within the two single amounts disclosed by the prior art. In other words, the prior art establishes two measures—which were themselves not far apart—and the claim simply adopted a measure between those end points. Titanium Metals is thus a case much like the range cases where the claimed amount falls directly within the established prior art range. Here, unlike in Titanium Metals, the claimed range unquestionably falls outside the range disclosed by the prior art.

In In re Peterson, the Court affirmed the finding of obviousness regarding the composition of a nickel-based single-crystal superalloy. 315 F.3d at 1327. The prior art disclosed ranges that either fully or at least partially overlapped with the claimed ranges. It is well-established that a prima facie case of obviousness exists when the claimed and prior art ranges overlap. See id. at 1329. While the court in In re Peterson cited the proposition from Titanium Metals that “a prima facie case of obviousness exists when the claimed range and the prior art range do not overlap but are close enough such that one

skilled in the art would have expected them to have the same properties,” id. at 1329 (citing Titanium Metals, 778 F.2d at 783) (emphasis omitted), that statement was dicta; all of the ranges in In re Peterson overlapped at least to some degree.

While a rejection based on ranges approaching each other might well be appropriate where there is a teaching in the prior art that the end points of the prior art range are approximate, or can be flexibly applied, the PTAB cites to no such evidence. And, Appellees are not able to cite to any evidence of such a teaching before us. Indeed, if anything, Maugans emphasizes limiting the amount of the first polymer, as increasing such amount negatively affects the spinnability and fabric strength. See Maugans at col. 12 ll. 47–58 (“fabrics prepared from fibers of the invention will exhibit a fabric strength which is at least 5 percent, more preferably at least 10 percent, and most preferably at least 20 percent of fabric prepared from fiber prepared form unmodified second polymer” and “fibers of the invention will exhibit a spinnability (maximum draw rpms) which is no more than 25 percent less than, more preferably no more than 15 percent less than the spinnability (maximum draw rpms) of fiber prepared from unmodified second polymer.”).

The court summarized their discussion of the weight percentage issue by saying:

We find that the PTAB erred in finding that the examiner established a prima facie case of obviousness solely because the claimed range and the prior art range approach one another. Consequently, we need not address whether the Maugans reference affirmatively teaches away from the claimed invention.

The court the turned its attention to the density feature.

In this case the Appellant had conceded that the claimed range of 0.915–0.950 g/cm³ falls within the prior art range of 0.855–0.950 g/cm³. The issue was whether Appellants provided sufficient evidence of unexpected results to support a finding of non-obviousness over the prior art.

The CAFC took the opportunity to remind us that: “When an applicant seeks to overcome a prima facie case of obviousness by showing improved performance in a range that is within or overlaps with a range disclosed in the prior art, the applicant must ‘show that the [claimed] range is critical, generally by showing that the claimed range achieves unexpected results relative to the prior art range.” In re Geisler, 116 F.3d 1465, 1469–70 (Fed. Cir. 1997)”

In this case, the PTAB had concluded “Appellants have not adequately explained why the

alleged improvement shown therein is considered significant and unexpected relative to the closest prior art, Maugans.” And the CAFC agreed using the substantial evidence rule.

The end result was that although claims 37 and 44 were found obvious according to § 103, claims 1-8, 30-36, 38, 40-43, 45, 46, 49 and 50 were deemed non-obvious and the case was remanded.

The take home lesson here is that it can be helpful to argue multiple claim features. Even if only one of your arguments is successful, that can be sufficient to establish §103 non-obviousness.

As a footnote, it is interesting that neither the PTAB nor the CAFC referred to the Supreme Court’s decision in KSR. By reading between the lines, one can infer that there was no teaching, suggestion or motivation in Maugans to extend the weight percentage from 25% to 26%. Could this be part of a larger trend? Since the decision is non- precedential, perhaps the answer is no.