[author: Kevin E. Noonan]
In a decision ripe for Supreme Court review (appropriately, this time), a fractured Federal Circuit delivered a plurality opinion in Marine Polymer Technologies, Inc. v. Hemcon, Inc. (Fed. Cir. 2012) (en banc). The case revealed a deep division between judges taking a strict constructionist view of the patent statute (in this case, 35 U.S.C. § 152 regarding intervening rights), and another cohort of judges who are apparently willing to adopt a more outcome-determinative view of the matter.
The case involved claims of U.S. Patent No. 6,864,245 directed to poly-N-acetyl glucosamine polymer used for treating trauma and other uses, purified from arthropods, fungi, and microalgae. The claims recited "biocompatible" preparations, based on four tests set forth in specification. A substance passes the test if the reaction is only mild or slight reactivity (<++), but some language in the specification indicated that truly biocompatible embodiments falling within the scope of the claim must be (< +), i.e., having "no detectable biological reactivity." The claims, on the other hand, recited biocompatible "generically," with no distinction based on degree (although some dependent claims recite values of 0).
During a Markman heating at the District Court, Marine Polymer argued that "biocompatible" p-GlcNAc should be construed to mean "biomedically pure [p-GlcNAc] that reproducibly exhibits acceptably low levels of adverse bioreactivity, as determined by biocompatibility tests." HemCon countered that "biocompatible" should be read as limiting the claims to p-GlcNAc that had been "harvested from plant microalgae," or in the alternative, should be interpreted broadly to mean "suited for biomedical applications." The District Court concluded that "biocompatible" p-GlcNAc, as claimed in the '245 patent, means p-GlcNAc "with low variability, high purity, and no detectable biological reactivity as determined by biocompatibility tests." The District Court granted summary judgment of infringement, and a jury entered a verdict of no invalidity and damages of ~$29M. In addition, the District Court granted Marine Polymer a permanent injunction.
While the District Court was pending, HemCon filed an ex parte request for re-examination, basing the "substantial new question of patentability" on District Court's claim construction. The examiner adopted a claim construction that differed from the District Court, concluding that "biocompatible" means "low variability, high purity, and little or no detectable reactivity" because (according to the examiner) independent claim 1 could not be construed to mean "no detectable bioreactivity" because there were dependent claims that recited low level of bioreactivity. Because this interpretation was broader than the District Court's claim construction, the examiner rejected all 22 claims on obviousness grounds. In response, the patentee canceled the dependent claims that recited little or no detectable reactivity, and argued that the District Court's construction should prevail. The examiner agreed and withdrew the rejections and issued the reexamination certificate.
A merits panel reversed the District Court on grounds that HemCon was entitled to intervening rights under Section 252. (Intervening rights apply to reexaminations under Sections 307(b) and 316(b).) In the Federal Circuit's en banc decision, written by Judge Lourie (joined by Chief Judge Rader and Judges Newman, Bryson and Prost in full, and Linn in part), with a dissent written by Judge Dyk (joined by Gajarsa, Reyna, and Wallach in full and Linn in part) (Judges O'Malley and Moore took no part in the decision), the Court "affirmed" (because the Federal Circuit was equally divided and hence there was no basis to reverse). The issue dividing the Court was whether a claim must be amended during reexamination (as opposed to merely changed in scope) for intervening rights to arise.
The "majority" opinion upheld the District Court's claim construction as being supported by intrinsic evidence (ignoring inconsistent portions of the specification), and determined that the claims did not define the term "biocompatible." Accordingly, the District Court was correct in interrogating the specification to ascertain the proper meaning of the term in the claim.
The opinion characterized the issue as "a conflict between teachings in the specification and the doctrine of claim differentiation," because the presence of dependent claims reciting the "little or no bioreactivity" limitation implied that the independent claim encompassed embodiments having a greater degree of bioreactivity). But the Court opined that the doctrine of claim differentiation was not controlling (not a "hard and fast rule") while claim construction based on the written description is, citing Seachange Int'l, Inc. v. C-Cor, Inc., 413 F.3d 1361, 1369 (Fed. Cir. 2005).
The issue of whether intervening rights arose as a consequence of the reexamination is where the Court split 5 to 5. HemCon's position was that cancellation of the dependent claims effectively changed the scope of the independent claim, and that this was enough to confer intervening rights. The majority rejected this contention, saying that the statute requires that the claims be "amended or new" to raise intervening rights, and here the independent claim was not amended. The opinion considered two types of intervening rights: absolute intervening rights and equitable intervening rights. Intervening rights do not accrue, according to the opinion, where the accused product or activity infringes a claim that existed in the original patent and remains "without substantive change" after reissue, citing Seattle Box Co. v. Indus. Crating & Packing, Inc., 731 F.2d 818, 827–28 (Fed. Cir. 1984). The opinion holds that the threshold inquiry is whether the claims were "amended or new"; only thereafter does the question become was there a substantive change. Accordingly, "HemCon ignores this threshold statutory requirement [that a claim be amended] and asks that we proceed directly to the subsidiary 'substantive change' analysis, which derives from § 252." While the plurality opinion recognizes that the amendments made during the reexamination changed claim scope, this is not the same as amending the claims, and HemCon's position that the equivalence of the effect should lead to an equivalent outcome (i.e., to raise intervening rights) "goes too far." Thus:
Section 307(a) identifies three categories of claims in a reexamined patent: (1) claims that existed in the original patent but have been cancelled as unpatentable, (2) claims that existed in the original patent and have been confirmed as patentable, and (3) amended or new claims that did not exist in the original patent but have been found to be patentable and will be incorporated into the patent by the PTO.
Intervening rights apply only to category #3 says the Court, if only because "[a]ny interpretation of 'amended' that includes disavowal or disclaimer by argument alone, as advocated by HemCon, would conflict with the rest of § 307, for it is difficult to envision how arguments about claim meaning could be 'incorporated into a patent' by the Director of the PTO."
The plurality addresses the concern raised by the dissent that their decision creates a "loophole" fraught with the potential for gamesmanship by patentees; the plurality does not believe the potential for a "loophole" is likely, because invalid claims will need amendment to be allowed. "Thus, the fear of gamesmanship does not persuade us to rule contrary to the plain meaning of the statute."
In sum, the plain directive of the governing statute before us does not permit HemCon to invoke intervening rights against claims that the PTO confirmed on reexamination to be patentable as originally issued. To be sure, patent applicants' actions and arguments during prosecution, including prosecution in a reexamination proceeding, can affect the proper interpretation and effective scope of their claims. But in rejecting HemCon's request for intervening rights, we are not here interpreting claims. Rather, we are interpreting a statute that provides for intervening rights following reexamination only as to "amended or new" claims. The asserted claims of the '245 patent are neither.
The dissent contends that the Court failed to address the issue except by dicta, and that the possible existence (or creation) of strategic advantages would only increase under the expanded post-grant review provisions of the Leahy-Smith America Invents Act (LS-AIA). For the dissenting judges, "[t]he starting point for an intervening rights determination is the meaning of the original claim language" as opposed to the plain meaning of the statute. These judges disagreed with District Court's claim construction, being more convinced by the claim differentiation argument that the meaning of the term "biocompatible" was broader than it was interpreted by the District Court's claim construction. It was also an important issue for these judges that whether the "product of nature" polymer was patent-eligible depends on the meaning of the term "biocompatible."
This case illustrates the continuing difficulties with the Federal Circuit's claim construction jurisprudence; the dissent says "[o]ne might at the outset be somewhat skeptical of this construction because it was not proposed by either party and was indeed contrary to the patentee's own proposed construction." This sentiment is in direct opposition to other pronouncements of the Federal Circuit, to the effect that a district court should not adopt either party's claim construction position but should instead come to an independent determination. (See, for example, Exxon Chemical Patents v. Lubrizol). Here, however, the dissenting judges think the District Court construction is contrary to the specification and prosecution history (and which is entitled to no deference), and also put more emphasis on the claim differentiation doctrine (saying it is ignored only if "compelled" by the intrinsic evidence). Thus:
Judge Lourie's new approach to claim construction would enable patentees to eliminate questions of validity by narrowing claims in accordance with a preferred embodiment or single example, while also allowing alleged infringers to narrow claims beyond their valid scope to avoid infringement. That approach cannot be correct.
The dissent also disagrees with the plurality's claim construction, relying on those portions of the specification that appear to indicate that "biocompatible" may be entitled to a broader interpretation that was given it by the District Court:
In other words, under the district court's incorrect claim construction, now binding on the parties as a result of the affirmance of the district court's judgment, the original and reexamined claims are identical in scope, and there is thus no issue of intervening rights and no need for the majority to offer "an alternative ground for decision."
The dissenting opinion equates "new or amended" = "substantially identical" ("clearly intended to have the same meaning"), relying on Laitram Corp. v. NEC Corp., 163 F.3d 1342, 1346 (Fed. Cir. 1998) ("Reexamined claims are "identical" to their original counterparts if they are 'without substantive change'") (this portion of the dissent is rebutted by the plurality on the grounds that the claims in Laitram were amended). Because "[t]he effect [of canceling claims] was to narrow the claims and protect them from a finding of invalidity," the dissenting judges believe that "[h]ere, although identical in language, the claims of the patent after reexamination were not identical in scope for purposes of intervening rights because they were "substantively changed" during reexamination." In perhaps their strongest argument, the dissenting judges note that the Supreme Court recognized that the scope of patents could be changed by an amendment to the specification where there is no formal amendment to the claim, citing Russell v. Dodge, 93 U.S. 460, 463 (1876) (noting that a specification might "be substantially changed, either by the addition of new matter or the omission of important particulars, so as to enlarge the scope of the invention as originally claimed").
Once again, this case illustrates one of the consequences of the difficulties inherent in applying the Federal Circuit's rubrics regarding whether the claims are being construed in light of the specification or the majority is importing limitations from the specification into the claims. The decision is also reminiscent of the differences on opinion that arose in Retractable Techs., Inc. v. Becton, Dickinson & Co., There, Judge Lourie wrote for the majority (reversing the District Court's construction) that:
There is a fine line between construing the claims in light of the specification and improperly importing a limitation from the specification into the claims. See Phillips, 415 F.3d at 1323. In reviewing the intrinsic record to construe the claims, we strive to capture the scope of the actual invention, rather than strictly limit the scope of claims to disclosed embodiments or allow the claim language to become divorced from what the specification conveys is the invention. Id. at 1323–24.
This sentiment was espoused even more strongly by Judge Plager, whoe wrote in a concurring opinion that: "the claims cannot go beyond the actual invention that entitles the inventor to a patent" and that "the [patentee's] obligation [was] to make full disclosure of what is actually invented, and to claim that and nothing more."
On the contrary, Chief Judge Rader, dissenting-in-part, argued the primacy of the claim language, and that it is impermissible to read limitations from the specification into the claims. He also joined in Judge Moore's dissenting opinion, which focused on a deficiency in the Court's application of the law: where to draw the "fine line" between "construing the claims in light of the specification and improperly importing a limitation from the specification into the claims." Relying principally on Phillips v. AWH Corp., 415 F.3d 1303, 1312 (Fed. Cir. 2005) (en banc), and the "bedrock principle" that "the claims of a patent define the invention to which the patentee is entitled the right to exclude," Judge Moore discounted the concerns voiced by the majority in Retractable Technologies, including that "the metes and bounds of what the inventor claims extend beyond what he has invented or disclosed in the specification." In that case, the question is one of validity rather than claim construction, she wrote, and it is not the role of the court to "tailor the claim language to the invention disclosed." Citing Phillips, Judge Moore's dissent relied once again on the mantra that the "plain meaning" of the clams controls (and the dissent voices surprise that this question was not resolved in Phillips). Judge Moore states her (stringent) standard for the relationship between the claims and the specification: "the specification cannot be used to narrow a claim term -- to deviate from the plain and ordinary meaning -- unless the inventor acted as his own lexicographer or intentionally disclaimed or disavowed claim scope," citing Phillips and Teleflex, Inc. v. Ficosa N. Am. Corp., 299 F.3d 1313, 1327 (Fed. Cir. 2002). Judge Moore identified the problem with the panel decision with particularlty:
The error in Retractable is the majority's attempt to rewrite the claims to better conform to what it discerns is the "invention" of the patent instead of construing the language of the claim. Indeed, the majority candidly explained that its construction, limiting "body" to a one-piece body, "is required to tether the claims to what the specifications indicate the inventor actually invented."
HemCon's position is supported by amici curiae Hewlett-Packard Co., Broadcom Corp., Cisco Systems, Inc., Dell, Inc., eBay, Inc., Facebook, Inc., Google Inc., and SAP America, Inc.; and GEICO Corp., FedEx Corp., and Macy's, Inc.
Marine Polymer's position is supported by amici curiae Jan K. Voda; Intellectual Ventures Management LLC; the Biotechnology Industry Association and Phar- maceutical Research and Manufacturers of America; Soverain Software LLC and Tessera, Inc.; and Sealy Corp.
Marine Polymer Technologies, Inc. v. Hemcon, Inc. (Fed. Cir. 2012) (en banc)
Panel: Chief Judge Rader and Circuit Judges Newman, Lourie, Bryson, Gajarsa, Linn, Dyk, Prost, Reyna, and Wallach
Opinion for the court by Circuit Judge Lourie, joined by Chief Judge Rader and Circuit Judges Newman, Bryson, and Prost in full, and by Circuit Judge Linn as to part II; dissenting opinion by Circuit Judge Dyk, joined by Circuit Judges Gajarsa, Reynam and Wallach in full, and by Circuit Judge Linn as to parts I-II.