PATENT CASE OF THE WEEK

Celgene Corporation v. Laura A. Peter, Appeal Nos. 2018-1167, -1168, -1169, -1171 (Fed. Cir. July 30, 2019)

In this week’s Case of the Week, the Federal Circuit held that the retroactive application of inter partes review proceedings to pre-AIA patents is not an unconstitutional taking under the Fifth Amendment, exercising its discretion to reach the issue despite it being raised for the first time on appeal. After the IPR decisions on appeal were entered, the question had expressly been left open by the Supreme Court in Oil States Energy Servs., LLC v. Greene’s Energy Grp., LLC, 138 S. Ct. 1365 (2018), and the Federal Circuit found that the non-factual nature of the issue, and the Patent Trial and Appeal Board’s likely inability to correct it had it been raised, counseled in favor of hearing the argument.

On the takings issue, the Court reasoned that patents have long been subject to reconsideration and possible cancellation by the USPTO, and that inter partes reviews do not differ significantly enough from preexisting reexamination proceedings to constitute a Fifth Amendment taking. While the AIA introduced some procedural changes to inter partes reexamination procedures, the Court found their similarities in substance and purpose to be more persuasive. The Court reiterated the “longstanding recognition that no one has a vested right in any given mode of procedure,” and found that certain differences between IPRs and its predecessor procedures did not disrupt the decades-long expectation that the USPTO could reconsider issued patents.

The Court also affirmed the Board’s determination that claims of two pharmaceutical industry patents were invalid as obvious. The patents claimed methods for safe delivery of teratogenic drugs, comprising identifying potential parents from a computer database, providing them with counseling information concerning the risks of fetal exposure, and authorizing prescriptions upon a determination of non-pregnancy. Among other things, the Court rejected appellant’s argument that a finding of no “long-felt need” was inconsistent with finding a motivation to combine the prior art, agreeing with the Board that where safety is at issue, a POSITA would be motivated to improve existing systems even though such systems were mostly successful.

The opinion can be found here.

ALSO THIS WEEK

VirnetX Inc. v. Apple Inc., Appeal Nos. 2017-1591, -1592, -1593 (Fed. Cir. August 1, 2019)

In an appeal from two pre-AIA inter partes reexamination proceedings before the patent office, the Federal Circuit ordered one of the proceedings to be terminated pursuant to 35 USC 317(b) and affirmed the other. VirnetX has sued Apple for patent infringement. Apple sought an inter partes reexamination. At trial in the district court, VirnetX prevailed on Apple’s invalidity challenge, which Apple appealed. The Federal Circuit affirmed, and Apple did not seek certiorari before the Supreme Court. In the reexam, VirnetX argued that the proceeding had to be terminated pursuant to the estoppel provision of pre-AIA Section 317(b), which requires as much “[o]nce a final decision has been entered” in the district court proceeding. The PTAB did not terminate the proceedings, however, because Apple still had a hypothetical right to appeal to the Supreme Court following further proceedings on the infringement front, which was still pending in the district court following remand from the Federal Circuit. A panel of the Federal Circuit Court disagreed, finding that the invalidity decision was final. It remanded with instructions to terminate the reexam proceedings. 

The Federal Circuit affirmed the PTAB’s findings of invalidity as to all claims not subject to the estoppel. However, there was not complete overlap, so some VirnetX claims survive.

Judge Reyna dissented, arguing that the district court case was not yet final. 

The opinion can be found here.

Amgen Inc. v. Coherus Biosciences Inc., Appeal No. 2018-1993 (Fed. Cir. July 29, 2019)

In this appeal from the United States District Court for the District of Delaware, the Federal Circuit addresses issues relating to prosecution history estoppel and infringement under the doctrine of equivalents of a patent that covers Amgen’s biologic drug, Neulasta. Finding that prosecution history estoppel barred Amgen from succeeding on its infringement claim under the doctrine of equivalents, the Court affirmed the district court’s dismissal of Amgen’s complaint for failure to state a claim. Specifically, the Court found that the district court did not err in finding that because Amgen, during prosecution, distinguished a prior art reference that did not disclose one of the “particular, recited combinations of salts” claimed by the patent at issue, it could not now argue that Coherus’s abbreviated Biologic License Application (aBLA), which disclosed a compound using a combination of salts other than the particular combination claimed by the patent, infringed under the doctrine of equivalents. While this was just one of three grounds argued by Amgen to distinguish that prior art reference, the Court held that because Amgen did not rely on the combination of its asserted grounds, prosecution history estoppel applies to each individual ground. In addition, the Court held that there is no requirement that argument-based estoppel apply only to arguments made in the most recent submission before allowance, and that Amgen’s prior statements made in other responses cannot just be erased.

The opinion can be found here.

Solutran, Inc. v. Elavon, Inc., Appeal No. 2019-1345, -1460 (Fed. Cir. July 30, 2019)

The Solutran patent at issue is directed to a system and method for converting information on paper checks into digital form to eliminate the need for physically transporting paper checks from merchant to bank and between banks. The district court found on summary judgment that the patent was infringed and was not invalid for being directed to non-patentable subject matter under section 101 of the Patent Act. As to the section 101 defense, the district court followed the reasoning of the Patent Trial & Appeal Board in rejecting a petition for institution of a CBM review of the Solutran patent, on grounds that the patent was directed to a method of handling and transporting paper checks, rather than to an abstract idea. The Federal Circuit reversed on de novo review. In step one of its Alice analysis, the Federal Circuit found that the patent claims were directed to the abstract idea of crediting a merchant’s account as early as possible while electronically processing a check. In step two of the Alice analysis, the Court rejected Solutran’s argument that the claims contain a sufficiently transformative inventive concept so as to be patent eligible.

The opinion can be found here.