Federal Circuit Patent Watch: Placing assets in a blind trust is not divestment


Precedential Federal Circuit Opinions 

1.  NOVARTIS PHARMACEUTICALS v. ACCORD HEALTHCARE INC. [OPINION] (2021-1070, 6/21/2022) (Moore, Linn, Hughes)

Moore, C.J. Granting petition for panel rehearing, vacating prior panel decision and reversing district court judgment of no invalidity for patent related to treatment of multiple sclerosis. The Court found the claims invalid due to lack of written description.  The claim contained the negative limitation “absent an immediately preceding loading dose.” “For negative claim limitations, like the no-loading-dose limitation at issue here, there is adequate written description when, for example, ‘the specification describes a reason to exclude the relevant [element].’ … Silence is generally not disclosure… If it were, then every later-added negative limitation would be supported so long as the patent makes no mention of it. While a negative limitation need not be recited in the specification in haec verba, there generally must be something in the specification that conveys to a skilled artisan that the inventor intended the exclusion, such as a discussion of disadvantages or alternatives.” The Court acknowledged that silence in the specification need not be dispositive and that some negative limitations could be inherently disclosed. “We do not today create a heightened standard for negative claim limitations. Just as disclosure is the ‘hallmark of written description’ for positive limitations, Ariad, 598 F.3d at 1351, so too for negative limitations… While silence will not generally suffice to support a negative claim limitation, there may be circumstances in which it can be established that a skilled artisan would understand a negative limitation to necessarily be present in a disclosure. This is not such a case.” Linn, J. dissented.

2.  CENTRIPETAL NETWORKS, INC. v. CISCO SYSTEMS, INC. [OPINION] (2021-1888, 6/23/2022) (Dyk, Taranto, Cunningham)

Dyk, J. Reversing district court’s denial of motion for recusal, vacating and remanding for further proceedings before a different district court judge. While preparing a post-trial decision, the district court judge discovered that his spouse owned 100 shares of stock in the defendant. The judge disclosed the stock ownership to the parties, defendant moved for recusal and that motion was denied. Rather than selling the stock, the judge placed the stock in a blind trust. The Court held that “placing assets in a blind trust is not divestment under [28 U.S.C.] § 455(f).” That the stock was in the losing party did not remove the risk of prejudice. “Where a judge becomes aware of a possible appearance of impropriety, there is a substantial risk that he or she might bend over backwards to rule against that party to try to prove that there is no bias. [citation omitted]. Congress did not make recusal obligations contingent on which party’s stock was owned, and we are aware of no case suggesting that this is a relevant factor… We think it should be a very unusual case where vacatur is denied when a judge discovers a clear disqualifying interest under § 455(b)(4), recusal is required, there is a failure to divest, and the judge proceeds to rule on the case despite that clear obligation.”

WilmerHale represented defendant-appellant, Cisco Systems, Inc.

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.

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