Assignor Estoppel is Still A Thing

In Mag Aerospace Industries, Inc. v, B/E Aerospace, Inc., [2015-1370, 1426] (March 23, 2016), the Federal Circuit affirmed summary judgment of non-infringement, and the district court’s ruling that the doctrine of assignor estoppel barred B/E from challenging the validity of the patents.

One of the inventors of the patents-in-suit, Pondelick, now works for B/E..but Pondelick assigned the patents to his former employer, who in turn assigned them to MAG. The district court concluded that Pondelick was in privity with B/E and thus that assignor estoppel applied to bar B/E from attacking the validity of the patents.

The district court analyzed a number of factors identified in Shamrock Technologies to determine whether a finding of privity was appropriate:

  1. the assignor’s leadership role at the new employer;
  2. the assignor’s ownership stake in the defendant company;
  3. whether the defendant company changed course from manufacturing non-infringing goods to infringing activity after the inventor was hired;
  4. the assignor’s role in the infringing activities;
  5. whether the inventor was hired to start the infringing operations;
  6. whether the decision to manufacture the infringing product was made partly by the inventor;
  7. whether the defendant company began manufacturing the accused product shortly after hiring the assignor; and
  8. whether the inventor was in charge of the infringing operation.

The district court acknowledged B/E’s arguments but found on balance that assignor estoppel was appropriate. The Federal Circuit found that the district court’s conclusion was not clearly erroneous, agreeing that many of the Shamrock factors weigh in favor of finding privity.

Of course the PTAB does not apply Assignor Estoppel, so patent challengers should raise their challenges there, and patent assignees should consider language in their assignments to forestall such challenges.


Sometimes the Application of a New Technology is Obvious from the New Technology Itself

In In re Cree, [2015-1365] (March 21, 2016), the Federal Circuit affirmed the decision of the PTAB in an ex parte reexamination that the claims directed to the production of white light through the “down-conversion” of blue light from LEDs was obvious from references teaching the down-conversion from other light sources including lasers.  The Board found that the claimed invention was predictable in view of the state of the art in LEDs, the market demand for white light devices, the finite number of identified means to convert light from LEDs into white light, and the advantages of using the down-conversion approach.

Among other things Cree contended that neither the Examiner nor the Board articulated any rational motivation to combine the teaches of down-conversion of laser light with high intensity LEDs.  The  Federal Circuit said that it was the availability of high-powered LEDs that provided the motivation to use such LEDs in known down-conversion production of white light.  Cree further argued that a person of ordinary skill would fail to appreciate that  teachings on down-conversion of laser light would be applicable to LEDs as well.  However the Federal Circuit found sufficient factual evidence that those of skill in the art have sufficient understanding of the scientific and engineering principles involved to have had a reason to combine the references.  Finally Cree argued that the Board’s rejection was based on “impermissible hindsight,” but the Federal Circuit found this to simply be “a repackaging” of the argument that there was insufficient evidence of a motivation to combine the references.

The Federal Circuit was also unimpressed with Cree’s showing of secondary considerations.  Cree pointed to third party press releases about the third party’s work on the same concept.  The Federal Circuit agreed that praise from a competitor tends to show non-obviousness, “self-serving statements from researchers about their own work do not have the same reliability.”   The Federal Circuit discounted evidence of licensing because it was unclear whether the licensing was due to the merits of the claimed invention or because of a desire to avoid litigation, prior business relationships, or for other economic reasons.”  Finally the Federal Circuit discounted evidence of commercial success because of a lack of showing of nexus between the invention and the success.


ANDA Filings Create Personal Jurisdiction Everywhere

In Acorda Therapeutics, Inc. v, Mylan Pharmaceutical Inc., [2015-1460) (March 18, 2016), the Federal Circuit affirmed that Mylan was subject to specific personal jurisdiction in the District of Delaware,  The Federal Circuit said that under Fed. R. Civ. P. 4(k)(1)(A), the district court had personal jurisdiction over Mylan if Mylan would be “subject to the jurisdiction of a court of general jurisdiction in the state where the district court is located,” and there is no dispute that Mylan would be subject to Delaware courts’ jurisdiction under Delaware’s long-arm statute, Del. Code Ann. tit. 10, § 3104, as long as Delaware’s exercise of personal jurisdiction over Mylan would be consistent with the Fourteenth Amendment’s Due Process Clause.

The Federal Circuit noted that Mylan had taken the costly, significant step of applying to the FDA for approval to engage in future activities—including the marketing of its generic drugs— that will be purposefully directed at Delaware (and, it is undisputed, elsewhere). The Federal Circuit said that if Mylan had already begun its deliberate marketing of these drugs in Delaware, there is no doubt that it could be sued for infringement in Delaware. The Federal Circuit concluded that the minimum-contacts standard is satisfied by the particular actions Mylan has already taken—its ANDA filings—for the purpose of engaging in injury-causing and allegedly wrongful marketing conduct in Delaware.