Federal Circuit Review - December 2013

by Knobbe Martens Olson & Bear LLP
Contact


 

Apple Awarded Permanent Injunction

In Apple Inc. v. Samsung Electronics Co., Appeal No. 13-1129, the Federal Circuit vacated denial of a permanent injunction with respect to Apple’s utility patents and affirmed denial of a permanent injunction with respect to Apple’s design patents and trade dress. 

In 2011, Apple sued Samsung for infringing utility and design patents and diluting Apple’s iPhone trade dress. Samsung filed counterclaims. The jury returned a verdict for Apple of more than $1 billion in damages, a portion of which was later set aside. After trial, Apple moved to enjoin Samsung from importing or selling infringing products or “any other products not more than colorably different from an Infringing Product as to a feature or design found to infringe.” Apple also sought to enjoin the sale of any products found to dilute Apple’s trade dress. 

The Federal Circuit affirmed in part and vacated in part. The Federal Circuit affirmed the denial of Apple’s request for a permanent injunction with respect to Apple’s design patents and trade dress. The Federal Circuit vacated the denial of injunctive relief with respect to Apple’s utility patents. 

Regarding irreparable harm, the Federal Circuit confirmed the district court’s application of a causal nexus requirement in the permanent injunction context. The district court erred in its treatment of survey evidence that showed consumers would be willing to pay a significant price premium in relation to the cost of the product. The Federal Circuit vacated the portion of the district court’s irreparable harm findings with respect to Apple’s utility patents. Regarding inadequacy of legal remedies, the district court abused its discretion by failing to analyze relevant differences between licensing to Samsung, Apple’s primary competitor, and Apple’s past licensing behavior. The Federal Circuit found no clear errors of judgment with respect to the balance of hardships and public interest factors. 

Patent Rights Exhausted 

In Lifescan Scotland, Ltd. v. Shasta Technologies, LLC, Appeal No. 13-1271, the Federal Circuit reversed the district court’s grant of a preliminary injunction, because Defendants established that Shasta’s customers’ purchase of LifeScan’s blood glucose meters exhausted the patent rights in LifeScan’s method patent for comparing measurements in blood glucose monitoring systems. 

LifeScan sued Shasta for indirect patent infringement of LifeScan’s patent directed to a method of comparing the measurements in a blood glucose monitoring system. The blood glucose monitoring system consisted of an electrochemical meter and disposable test strips. Shasta, which did not sell blood glucose meters, competed with LifeScan in the market for test strips. Accordingly, LifeScan alleged that the users of Shasta’s test trips would be the direct infringers. Shasta argued that it had a substantial defense based on the doctrine of patent exhaustion under Quanta Computer, Inc. v. LG Electronics, Inc., 553 U.S. 617 (2008). Specifically, Shasta argued that LifeScan’s sale and distribution of its meters exhausted LifeScan’s rights under its method patent because the meters substantially embodied the invention. The district court rejected Shasta’s argument and granted LifeScan’s motion for a preliminary injunction, finding that patent exhaustion only applies to a “sale” in which the patentee receives “consideration” in exchange for a patented product and not where, as here, LifeScan distributes some of its meters for free. With regards to those meters that did qualify as a sale, the district court still concluded that patent exhaustion did not apply because the patent “is a method patent that requires both a meter and a test strip for an individual to practice it.” 

The Federal Circuit reversed, concluding that Shasta established a patent exhaustion defense as a matter of law. The Federal Circuit looked, in particular, to the patent abstract, specification, and the prosecution history to find that LifeScan’s meters substantially embodied the methods claimed in the patent. The Federal Circuit found that the inventive concept was in the meters alone because the meters “control” and “carry out” the inventive functions of the method claims. The Federal Circuit further stated that, although the specification described the strips, the claims covering the strips were not ultimately allowed. Accordingly, the Federal Circuit refused to extend the patent’s exclusive rights to bar the use of the meters with strips manufactured by Shasta, as such a bar would prevent the use of the meters for their contemplated function. Lastly, the Federal Circuit held that patent exhaustion applies to all authorized transfers of title in property, irrespective of whether the transfer is a gift or a sale. 

Invention Priority Awarded Despite Errors in Conception 

In Sanofi-Aventis v. Pfizer Inc., Appeal No. 12-1345, the Federal Circuit affirmed a decision from the Board of Patent Appeals and Interferences (the “Board”) awarding priority of invention to Pfizer, despite Pfizer’s lack of a completely correct nucleotide sequence by Sanofi’s benefit date. 

Sanofi appealed a decision from the Board awarding priority of invention to Pfizer. On appeal, the Federal Circuit reviewed the Board’s rulings of law for correctness and factual findings for support by substantial evidence. 

Sanofi was awarded a priority date of December 6, 1995. Since Pfizer’s filing date is March 1, 1996, Pfizer bore the burden of proving a date of conception earlier than the Sanofi date. Pfizer presented evidence that it had isolated and identified the desired cDNA before the Sanofi date. However, due to sequencing errors, Pfizer did not then have a completely accurate analysis of the entire nucleotide sequence. The Board held that Pfizer had established conception of the subject matter when it selected, isolated, and obtained the desired IL-13bc full-length polynucleotide and verified that it was the desired product, regardless of whether the fully correct sequencing of the polynucleotide was complete. On appeal, Sanofi argued that conception of the claimed cDNA could not be established for priority purposes until the fully correct nucleotide sequence was determined and that, because Pfizer’s sequence analysis before the Sanofi date contained errors as to 8 of the 1143 nucleotides, Pfizer cannot be credited with conception. 

The Federal Circuit affirmed, concluding that the Board correctly based conception and reduction to practice on the possession of the isolated DNA segment that was shown to have the desired properties. The Federal Circuit noted that the issue was not identification of the operative DNA by full nucleotide analysis, but isolation of the operative DNA and identification by distinguishing properties of the isolate. The precedent cited by Sanofi does not hold, as Sanofi asserts, that conception requires the complete and correct sequencing of the isolated DNA. The Federal Circuit further noted that, in a variety of circumstances, conception was found although the complete nucleotide sequence was not known. Furthermore, for proteins and polynucleotide species, although a sequence is the gold standard for identifying the species with precision, it is not the only way to identify the composition precisely. The Federal Circuit concluded that Pfizer, upon selecting, isolating and characterizing the IL-13bc, was able to define the IL-13bc so as to distinguish it from other materials and to define how to obtain it.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

© Knobbe Martens Olson & Bear LLP | Attorney Advertising

Written by:

Knobbe Martens Olson & Bear LLP
Contact
more
less

Knobbe Martens Olson & Bear LLP on:

Readers' Choice 2017
Reporters on Deadline

"My best business intelligence, in one easy email…"

Your first step to building a free, personalized, morning email brief covering pertinent authors and topics on JD Supra:
Sign up using*

Already signed up? Log in here

*By using the service, you signify your acceptance of JD Supra's Privacy Policy.
Privacy Policy (Updated: October 8, 2015):
hide

JD Supra provides users with access to its legal industry publishing services (the "Service") through its website (the "Website") as well as through other sources. Our policies with regard to data collection and use of personal information of users of the Service, regardless of the manner in which users access the Service, and visitors to the Website are set forth in this statement ("Policy"). By using the Service, you signify your acceptance of this Policy.

Information Collection and Use by JD Supra

JD Supra collects users' names, companies, titles, e-mail address and industry. JD Supra also tracks the pages that users visit, logs IP addresses and aggregates non-personally identifiable user data and browser type. This data is gathered using cookies and other technologies.

The information and data collected is used to authenticate users and to send notifications relating to the Service, including email alerts to which users have subscribed; to manage the Service and Website, to improve the Service and to customize the user's experience. This information is also provided to the authors of the content to give them insight into their readership and help them to improve their content, so that it is most useful for our users.

JD Supra does not sell, rent or otherwise provide your details to third parties, other than to the authors of the content on JD Supra.

If you prefer not to enable cookies, you may change your browser settings to disable cookies; however, please note that rejecting cookies while visiting the Website may result in certain parts of the Website not operating correctly or as efficiently as if cookies were allowed.

Email Choice/Opt-out

Users who opt in to receive emails may choose to no longer receive e-mail updates and newsletters by selecting the "opt-out of future email" option in the email they receive from JD Supra or in their JD Supra account management screen.

Security

JD Supra takes reasonable precautions to insure that user information is kept private. We restrict access to user information to those individuals who reasonably need access to perform their job functions, such as our third party email service, customer service personnel and technical staff. However, please note that no method of transmitting or storing data is completely secure and we cannot guarantee the security of user information. Unauthorized entry or use, hardware or software failure, and other factors may compromise the security of user information at any time.

If you have reason to believe that your interaction with us is no longer secure, you must immediately notify us of the problem by contacting us at info@jdsupra.com. In the unlikely event that we believe that the security of your user information in our possession or control may have been compromised, we may seek to notify you of that development and, if so, will endeavor to do so as promptly as practicable under the circumstances.

Sharing and Disclosure of Information JD Supra Collects

Except as otherwise described in this privacy statement, JD Supra will not disclose personal information to any third party unless we believe that disclosure is necessary to: (1) comply with applicable laws; (2) respond to governmental inquiries or requests; (3) comply with valid legal process; (4) protect the rights, privacy, safety or property of JD Supra, users of the Service, Website visitors or the public; (5) permit us to pursue available remedies or limit the damages that we may sustain; and (6) enforce our Terms & Conditions of Use.

In the event there is a change in the corporate structure of JD Supra such as, but not limited to, merger, consolidation, sale, liquidation or transfer of substantial assets, JD Supra may, in its sole discretion, transfer, sell or assign information collected on and through the Service to one or more affiliated or unaffiliated third parties.

Links to Other Websites

This Website and the Service may contain links to other websites. The operator of such other websites may collect information about you, including through cookies or other technologies. If you are using the Service through the Website and link to another site, you will leave the Website and this Policy will not apply to your use of and activity on those other sites. We encourage you to read the legal notices posted on those sites, including their privacy policies. We shall have no responsibility or liability for your visitation to, and the data collection and use practices of, such other sites. This Policy applies solely to the information collected in connection with your use of this Website and does not apply to any practices conducted offline or in connection with any other websites.

Changes in Our Privacy Policy

We reserve the right to change this Policy at any time. Please refer to the date at the top of this page to determine when this Policy was last revised. Any changes to our privacy policy will become effective upon posting of the revised policy on the Website. By continuing to use the Service or Website following such changes, you will be deemed to have agreed to such changes. If you do not agree with the terms of this Policy, as it may be amended from time to time, in whole or part, please do not continue using the Service or the Website.

Contacting JD Supra

If you have any questions about this privacy statement, the practices of this site, your dealings with this Web site, or if you would like to change any of the information you have provided to us, please contact us at: info@jdsupra.com.

- hide
*With LinkedIn, you don't need to create a separate login to manage your free JD Supra account, and we can make suggestions based on your needs and interests. We will not post anything on LinkedIn in your name. Or, sign up using your email address.
Feedback? Tell us what you think of the new jdsupra.com!