About bwheelock

Education J.D., Washington University in St. Louis B.S.E. in Mechanical Engineering, Duke University

In Illumina, Inc. v. Ariosa Diagnostics, Inc., [2019-1419] (August 3, 2020), the Federal Circuit modified the Court’s original opinion on March 17, 2020.  The Federal Circuit reversed the district court’s determination that claims 1–2, 4–5, and 9–10 of U.S. Patent 9,580,751 and claims 1–2 and 10–14 of U.S. Patent 9,738,931 were invalid under 35 U.S.C. § 101 as directed to an ineligible natural phenomenon.

Posted in 101

Reason for Claim Amendment Was Tangential to Equivalent, Doctrine of Equivalents Applies

In Bio-Rad Laboratories, Inc. v. 10x Genomics Inc., [2019-2255, 2019-2285] (August 3, 2020), the Federal Circuit affirmed the judgment of infringement of U.S. Patent No. 8,889,083 and the entirety of the jury’s damages award, but reversed the district court’s construction of the asserted claims of U.S. Patent No 8,304,193 and 8,329,407 and vacated the judgment of infringement of those patents. The Federal Circuit remanded for a new trial on the issue of whether 10X’s accused products infringe the ’407 and ’193 patents under the proper claim construction.

The Federal Circuit found that the district court properly denied JMOL that the claims were not infringed under the Doctrine of Equivalents.  The Federal Circuit noted two limitations on the Doctrine of Equivalents: Prosecution History Estoppel, and Vitiation – giving such a broad range of equivalents, that the limitation is effectively eliminated.

Prosecution history estoppel arises when a patent applicant narrows the scope of his claims during prosecution for a reason substantially relating to patentability, giving rise to a presumption of surrender of all equivalents within the territory between the original claim and the amended claim.  This presumption can be overcome if the patentee can show that one of the following “exceptions” to prosecution history estoppel applies: (1) the rationale underlying the amendment bears no more than a tangential relation to the equivalent in question; (2) the equivalent was unforeseeable at the time of the application; or (3) there was some other reason suggesting that the patentee could not reasonably be expected to have described the equivalent. This presumption can be overcome if the patentee can show that one of the following “exceptions” to prosecution history estoppel applies: (1) the rationale underlying the amendment bears no more than a tangential relation to the equivalent in question; (2) the equivalent was unforeseeable at the time of the application; or (3) there was some other reason suggesting that the patentee could not reasonably be expected to have described the equivalent.

The district court held that prosecution history estoppel does not apply in this case because the amendment at issue was only tangentially related to the accused equivalent.  The court reasoned that, during prosecution, the inventors sought to distinguish the microchannels in their system from fluorinated prior art microchannels that would react with the carrier fluid. In the district court’s view, the objectively apparent reason for the amendment was to distinguish fluorinated microchannels from microchannels that had no fluorinated properties. The district court concluded that an accused product like 10X’s —having minute or negligible quantities of fluorine that have no function in the product and do not react with the microchannels—could meet the “non-fluorinated” limitation under the doctrine of equivalents.  The Federal Circuit agreed, noting the inventors surrendered microchannels coated with fluorine “for a purpose—not those containing de minimis amounts of fluorine that have no effect on how the microchannel functions in the system.”  The crux of the tangentiality inquiry remains the patentee’s objectively apparent reason for the narrowing amendment as discernible from the prosecution history record, and the prosecution history record reveals that the reason for the amendment was to distinguish microchannels that reacted with carrier fluids.  Thus prosecution history does not apply.

Regarding vitiation, the Federal Circuit explained that vitiation is not an exception or threshold determination that forecloses resort to the doctrine of equivalents, but is instead a legal conclusion of a lack of equivalence based on the evidence presented and the theory of equivalence asserted.  On appeal, 10X argued that the doctrine of equivalents is unavailable to Bio-Rad because “fluorinated” and “non-fluorinated” are “diametric opposites” and because a fluorinated microchannel is the “antitheses” of a non-fluorinated microchannel.  The Federal Circuit found that despite some surface appeal, this argument did not hold up under even minimal scrutiny.

The Federal Circuit said that the appropriate inquiry is whether a reasonable juror could have found that a negligibly-fluorinated microchannel performs the same function, in the same way, and achieves the same result, as a non-fluorinated microchannel. Based on the evidence presented at trial — including expert testimony — the Federal Circuit found that the district court correctly concluded that a reasonable juror could find that a 0.02% Kynar-containing microchannel is insubstantially different from a non-fluorinated microchannel.

Regarding infringement of the ’407 and ’193 patents, the issues was whether or not the claim preamble was a limitation.  10X argued that the district court incorrectly treated portions of the preamble as not being a claim limitation, and Federal Circuit agreed.  The Federal Circuit acknowledged that in TomTom, Inc. v. Adolph, 790 F.3d 1315, 1324 (Fed. Cir. 2015)), it found that part of the preamble was a claim limitation and another part of the claim limitation was not.  The Federal Circuit said that crucially, unlike TomTom, the preamble in this case cannot be neatly packaged into two separate portions.  The Federal Circuit correctly held that portions of the preamble provide antecedent basis for the use of terms in the body of the claim, but disagreed that these limiting terms can be read separately from the remainder of the preamble. The language relied upon for antecedent basis in the preamble at issue was intertwined with the rest of the preamble.  The Federal Circuit thus vacated the finding of infringement and remanded for determination of infringement under the correct, narrower construction.

Federal Circuit to PTAB: Show Your Work

In Alacritech, Inc., v. Intel, [2019-1467, 2019-1468] (July 31, 2020) the Federal Circuit vacated the Board’s obviousness determination as to claims 41–43 of U.S. Patent No. 8,131,880  because the Board did not adequately support its finding that the asserted prior art combination teaches or suggests a limitation recited in claims, and remanded for further proceedings regarding those claims.

The ’880 patent relates to computer networking, and is specifically directed to offloading certain network-related processing tasks from a host computer’s central processing unit (CPU) to an “intelligent network interface card” (INIC). According to the ’880 patent, one of the tasks that can be offloaded from the CPU to the INIC is the reassembly of data from packets received by the host computer from the network.

The Federal Circuit said that to support Federal Circuit review, the Board is obligated to provide an administrative record showing the evidence on which the findings are based, accompanied by the agency’s reasoning in reaching its conclusions.  The Federal Circuit said that it does not require perfect explanations, and it will uphold a decision of less than ideal clarity if the agency’s path may reasonably be discerned.  However, the Federal Circuit found that the Board’s analysis of the disclosure of the reassembly limitations in claims 41–43 falls short of that which the APA and our precedent require.

The Federal Circuit found that the Board’s analysis did not acknowledge the parties’ dispute over where the reassembly occurs, much less explain how the prior art teaches or suggests reassembly in the network interface. As such, the Federal Circuit said that it could not reasonably discern whether the Board followed a proper path in determining that the asserted prior art teaches or suggests the reassembly limitations, and by extension, that the subject matter of claims 41–43 would have been obvious.  The Federal Circuit further noted that because the Board’s reasoning appears to be untethered to either party’s position, it could not infer that the Board’s obviousness determinations flowed directly from its rejection of the patent owner’s arguments, or adoption of the Petitioner’s arguments.

The Federal Circuit vacated the Board’s obviousness determination as to claims 41–43 and remanded for further proceedings consistent with this opinion.   

Posted in IPR

Improved Method of Operating a Flow Cytometry Apparatus Is Not Abstract

In XY, LLC v. Trans Ova Genetics, LC, [2019-1789] (July 31, 2020), the Federal Circuit reversed the district court’s judgment that the asserted claims of RE46559 are ineligible under §101, and vacate the district court’s determination that claim-preclusion judgment, and remand for further proceedings certain claims of U.S. Patent Nos. 6,732,422, 7,723,116, and 8,652,769 were claim-precluded based on a prior lawsuit filed by XY against Trans Ova.

The ‘559 patent is directed to a method of operating a flow cytometry apparatus with at least n detectors to analyze at least two populations of particles in the same sample.  At Alice step two the district court found that the claims were directed to the mathematical equation that permits rotating multi-dimensional data.  At Alice step two, the district court held that the asserted claims lacked an inventive concept because XY admitted that each claim element was known in the art.

Beginning its analysis with Alice step one, the Federal Circuit concluded that the district court erred when it held that the claims are directed to the mathematical equation that permits rotating multi-dimensional data.  The Federal Circuit found that the claims are directed to a purportedly improved method of operating a flow cytometry apparatus.  The Federal Circuit found the asserted ’559 patent claims were analogous to the claims at issue in Diehr and Thales.  Like the claims in Diehr, the asserted claims “describe in detail a step-by-step method” for accomplishing a physical process.  Like the claims in Thales, the claims are directed to a method in which at least two sensors or detectors gather data about an object before mathematical operations are applied to the gathered data to generate more accurate information about the object than was previously possible in the art.  Having concluded that the asserted claims of the ’559 patent are not directed to an abstract idea at Alice step one, the Federal Circuit did not reach Alice step two.

Turning to the issue of claim preclusion, the Federal Circuit said that the parties’ only dispute concerned whether the district court properly concluded that XY’s 2012 and 2016 lawsuits present the same cause of action. XY argues that the district court erred by failing to compare the currently asserted patent claims to the previously asserted patent claims to determine whether the causes of action in the two lawsuits are essentially the same, and the Federal Circuit agreed.  The district court’s holding was based solely on the fact that the earlier-asserted patents and the later-asserted patents shared a common specification and were continuations of, and terminally-disclaimed to, the same parent patent.  The Federal Circuit concluded that the district court erred in its claim-preclusion analysis by failing to compare the scope of the patent claims asserted in the 2012 lawsuit with the scope of the patent claims asserted in the 2016 lawsuit, and vacated and remanded the case.

Posted in 101

“Half-Liquid” is Wholly Indefinite

In IBSA Institut Biochemique, S.A. v. Teva Pharmaceuticals USA, Inc., [2019-2400] (July 31, 2020), the Federal Circuit affirmed claims the district court determination that claims 1, 2, 4, and 7–9 of U.S. Patent No. 7,723,390 were invalid as indefinite under 35 U.S.C. § 112.

Central to the appeal was the parties’ dispute over the construction of “half-liquid,” which appears in independent claim 1.  IBSA proposed that the term “half-liquid” should be construed to mean “semi-liquid, i.e., having a thick consistency between solid and liquid.” Teva argued that the term “half-liquid” is indefinite or should be construed as “a non-solid, non-paste, non-gel, non-slurry, non-gas substance.”

The district court determined that IBSA’s proposed construction was not supported by the record, and that a skilled artisan could not otherwise ascertain a reasonably certain meaning for “half-liquid.”

The Federal Circuit began by noting that a claim is invalid for indefiniteness if its language, read in light of the specification and prosecution history, fails to inform, with reasonable certainty, those skilled in the art about the scope of the invention.  The Federal Circuit then turned to the language of the claim to determine whether the meaning of “half-liquid” is reasonably clear. Neither party meaningfully disputed that the claim language did not make the meaning of “half-liquid” reasonably clear. The Federal Circuit found that the claim language clarifies only that a “half-liquid” differs from a liquid.  The Federal Circuit then turned to the specification and prosecution history, which did not help. In fact, the fact that at one time a claim to a semi-liquid depended from the claim to the half-liquid established that half-liquid and semi-liquid were not synonyms.

Because the intrinsic evidence failed to establish the boundaries of a “half-liquid,” the  Federal Circuit turned to the extrinsic evidence, and found no error in the district court’s determination that the extrinsic evidence does not supply “half-liquid” with a definite meaning under § 112.

The Federal Circuit concluded that taken together, the intrinsic and extrinsic evidence fail to inform, with reasonable certainty, those skilled in the art about the scope of the invention, and affirmed the judgment of the district court.

It is important to make sure the meaning of every claim term is clear from the specification, particularly where the claims have been translated from another language.

Lack of Likelihood of Success and Irreparable Harm Doomed Preliminary Injunction

In Takeda Pharmaceuticals USA, Inc. v. Mylan Pharmaceuticals Inc., [  2020-1407, 2020-1417] (July 31, 2020), the Federal Circuit affirmed the denial of a preliminary injunction on the grounds that Takeda failed to show that it was likely to succeed on the merits or that it would be irreparably harmed absent a preliminary injunction.

A plaintiff seeking a preliminary injunction must establish [1] that he is likely to succeed on the merits, [2] that he is likely to suffer irreparable harm in the absence of preliminary relief, [3] that the balance of equities tips in his favor, and [4] that an injunction is in the public interest.”

On the likelihood of success, the Federal Circuit agreed that the final judgment in the prior litigation likely triggered Section 1.2(d) of a License Agreement, permitting Mylan to market its generic colchicine product, and therefore Takeda was unlikely to succeed on the merits.

The Federal Circuit then considered the issue of irreparable harm. Takeda primarily relied on Section 1.10 of the License Agreement, which created a presumption of harm if the license agreement were breached, to prove irreparable harm. The Federal Circuit by its terms, Section 1.10 only offers Takeda a basis for establishing irreparable harm in the event Mylan breached Section 1.2.  However, because it concluded that it is unlikely Takeda can show that Mylan breached the License Agreement, the Federal Circuit further conclude that Section 1.10 is not useful for establishing irreparable harm.

Judge Newman in dissent argued that there was no accelerating event and thus Mylan breached the Agreement, entitling Takeda to a preliminary injunction.

Axles are Still Abstract Ideas

In American Axle & Manufacturing, Inc., v. Neapco Holdings LLC, [2018-1763] (July 31, 2020), the Federal Circuit modified and reissued its October 3, 2019 opinion. In American Axle & Manufacturing, Inc., v. Neapco Holdings LLC, [2018-1763] (July 31, 2020). On petition for rehearing en banc, the Federal Circuit denied rehearing en banc.  DYK, wrote a concurrence, joined by WALLACH and TARANTO.  CHEN, also wrote a concurrence, joined by WALLACH.  NEWMAN wrote a dissent, joined by MOORE, O’MALLEY, REYNA, and STOLL.  STOLL wrote a dissent, joined by NEWMAN, MOORE, O’MALLEY, and REYNA. O’MALLEY wrote a dissent joined by NEWMAN, MOORE, and STOLL. LOURIE, dissented without opinion.

Posted in 101

Institution Decision Not Carved in Stone; Final Written Decision Can Differ

In Fanduel, Inc. v. Interactive Games LLC, [2019-1393] (July 29. 2020), the Federal Circuit affirmed the PTAB’s determination that Fanduel, had failed to prove that claim 6 of U.S. Patent No. 8,771,058 was obvious in view of the asserted prior art.  Fanduel argued that the Board violated the APA by adopting in its final written decision a “new theory”—that the combination of Walker, Carter, and the Slot Payouts Webpage failed to disclose the claimed combination, after instituting on that ground.

The Federal Circuit said that the critical question for compliance with the APA and due process is whether patent owner received adequate notice of the issues that would be considered, and ultimately resolved, at that hearing.  The Federal Circuit added that FanDuel’s argument that it lacked notice that the Board might address and reject the obviousness arguments made in FanDuel’s own petition strains credulity.

Moreover, the Federal Circuit failed to see how the Board changed theories at all in this case. The Federal Circuit said that by finding at institution that Fan-Duel had a reasonable likelihood of succeeding in its obviousness challenge to claim 6, despite one reference’s contested prior art status, the Board was not adopting a position on the ultimate import of the three references. The Federal Circuit said that the Board said nothing in its institution decision endorsing FanDuel’s arguments such that later rejecting these arguments would have been a change in theory.

The Federal Circuit said that there is nothing inherently inconsistent about the Board instituting IPR on obviousness grounds and then ultimately finding that the petitioner did not provide preponderant evidence that the challenged claim was obvious. The Federal Circuit observed that this happens with some frequency, and that is has encouraged the Board to “change its view of the merits after further development of the record, if convinced its initial inclinations were wrong.

The Federal Circuit also rejected FanDuel’s suggestion that the patent owner’s failure to put forth rebuttal evidence regarding the substance of the references’ disclosures in any way limited the Board’s ability to decide for itself what the references would teach or suggest to a person of skill in the art.  The Federal Circuit noted that the Petitioner always has the burden of showing invalidity, and that the patent owner does not even have to file a response, and thus, a patent owner’s response, alone, does not define the universe of issues the Board may address in its final written decision.

The Federal Circuit concluded that from the moment FanDuel filed its petition, it was on notice that the Board would decide whether those references taught what FanDuel claimed they taught. That is exactly what the Board ultimately did. No APA violation results from such a course.  The Board’s purported new theory in this case was merely an assessment of the arguments and evidence Fan-Duel put forth in its petition.

On the substantive issues, the Federal Circuit agreed with Board that FanDuel failed to show that claim 6 was obvious.

Patent Owner is Not Always Indispensable

In Gensetix,Inc. v. Baylor College of Medicine, [2019-1424] (July 24, 2020), the Federal Circuit affirmed-in-part, reversed-in-part, and remanded  the dismissal of the suit for failure to join an indispensable party.

Gensetix, Inc. , exclusively licensed U.S. Patent Nos. 8,728,806 and 9,333,248 from the University of Texas, an arm of the state of Texas. Gensetix brought suit, naming the University of Texas as an involuntary plaintiff. The district court determined that the Eleventh Amendment barred joinder of UT as an involuntary plaintiff, and concluded that the suit could not proceed in UT’s absence.

The Federal Circuit agreed that sovereign immunity prevented UT from being joined as an involuntary plaintiff, noting that sovereign immunity is reflected in (rather than created by) the Eleventh Amendment, and transcends the narrow text of the Amendment itself. Sovereign immunity serves to avoid the indignity of subjecting a State to the coercive process of judicial tribunals at the instance of private parties. The Federal Circuit distinguished cases where the state is the plaintiff, noting that the Eleventh Amendment applies to suits against a state, not suits by a state. Thus, the fact that UT did not voluntarily invoke federal court jurisdiction was dispositive. Accordingly, Rule 19(a)(2) cannot be used to drag an unwilling UT into federal court.

However, the Federal Circuit found that the district court abused its discretion when it dismissed the suit because of the absence of UT. Rule 19(b) provides that, where joinder of a required party is not feasible, “the court must determine whether, in equity and good conscience, the action should proceed among the existing parties or should be dismissed.” Fed. R. Civ. P. 19(b). This inquiry involves consideration of four factors: (1) the extent to which a judgment rendered might prejudice the missing required party or the existing par-ties; (2) the extent to which any prejudice could be lessened or avoided (3) whether a judgment rendered in the required party’s absence would be adequate; and (4) whether the plaintiff would have an adequate remedy if the action were dismissed for nonjoinder.

The district court found that three out of the four Rule 19(b) factors weighed in favor of dismissing the case. However, the Federal Circuit concluded that the district court abused its discretion by collapsing the multi-factorial Rule 19(b) inquiry into one dispositive fact: UT’s status as a sovereign.

The Federal Circuit said that the proper analysis of the Rule 19(b) factors is far more nuanced than the district court’s. As to the prejudice to UT, the interests of UT and Gensetix are aligned. Despite UT’s sovereign status, given Gensetix’s identical interest in the validity of the patents-in-suit, any prejudice to UT is greatly reduced. There is also no risk of multiple suits be-cause, under the express terms of the parties’ agreement, UT may not sue Baylor once Gensetix has commenced liti-gation. And, as an exclusive licensee with less than all sub-stantial rights in the patents-in-suit, Gensetix cannot enforce its patent rights without the court allowing the suit to proceed in UT’s absence. Given this clear factual record, we conclude that it was an abuse of discretion to find that the suit may not proceed in UT’s absence. Accordingly, we reverse the district court on this point.

Gensetix provides some guidance when licensing from an arm of the state government. To be able to suit without joint the patent owner, the licensee should make sure that their license is exclusive, in all fields, and that the licensee can enforce the patent, and patent owner cannot bring suit once the licensee does. This should tip the balance of the FRCP 19(b) factors in favor of the licensee enforcing the patent.

PTAB is not Limited to § 102 and § 103 when Reviewing Amended Claims in IPR

In Uniloc 2017 LLC v. Hulu, LLC, [2019-1686] (July 22, 2020) the Federal Circuit affirmed the PTAB’s denial of Uniloc 2017’s motion to amend on the grounds that the substitute claims were unpatentable under 35 USC 101.

During an IPR the patent owner may file one motion to amend the patent, canceling any challenged patent claim and for each challenged claim, proposing a reasonable number of substitute claims. § 316(d)(1). At the conclusion of the IPR, the Director shall issue and publish a certificate incorporating in the patent by operation of the certificate any new or amended claim determined to be patentable. § 318(b).

In its Final Written Decision, the PTAB, in addition to explaining why the challenged original claims are unpatentable, denied Uniloc’s Motion to Amend the claims, concluding that Hulu had shown by a preponderance of the evidence that the Substitute Claims are directed to non-statutory subject matter under 35 U.S.C. § 101. Ineligibility was the sole ground on which the PTAB denied the motion to amend.

Rejecting the argument that the case was moot, the Federal Circuit considered PTAB authority to consider § 101 eligibility for proposed
substitute claims, concluding that the PTAB was authorized by statute to assess Uniloc’s proposed Substitute Claims for eligibility under § 101 and,
finding the claims ineligible, to deny the motion to amend.

Uniloc argued that the PTAB was limited in its review of proposed
substitute claims to anticipation or obviousness, as provided by § 311(b). However the Federal Circuit found that the PTAB correctly concluded that it is not limited by § 311(b) in its review of proposed substitute claims in an
IPR, and that it may consider § 101 eligibility. The Federal Circuit said that this determination was supported by the text, structure, and history of
the IPR Statutes, which indicate Congress’s unambiguous intent to permit the PTAB to review proposed substitute claims more broadly than those bases provided in § 311(b).

The Federal Circuit said that the IPR Statutes plainly and repeatedly require the PTAB to determine the “patentability” of proposed substitute claims. The Federal Circuit said that Congress did not intend §311 to constrain the PTAB’s review of proposed substitute claims to anticipation and obviousness, pursuant to § 102 and § 103, because §311 is confined to the review of existing patent claims, not proposed ones. The Federal Circuit said that the structure and legislative history of the IPR Statutes support this conclusion, as section 311 applies to the petition phase of the proceedings, and not to a separate adjudication-stage provision, such as § 316. Finally, the Federal Circuit found support in the IPR statute’s legislative history.

The Federal Circuit concluded that the PTAB can consider §101 when considering amended or substitute claims in an IPR (and no doubt §112 as well).