Federal Circuit Review | February 2017

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“Common Sense” Alone Is Not a Sufficient Motivation to Combine References

In In Re: Van Os, Appeal No. 2015-1975, the Federal Circuit held that the Patent Trial and Appeal Board’s reliance on intuition or common sense as a motivation to combine references must be supported by explicit and clear reasoning.

Apple’s inventors appealed the Board’s decision affirming the examiner’s rejection of four claims directed to a touchscreen interface in a portable electronic device that allows a user to rearrange icons.   The Board concluded that the claims would have been obvious over a combination of two prior art references.

The Federal Circuit rejected the Board’s finding of obviousness because the Board and examiner did not adequately explain a person of ordinary skill in the art’s (“POSITA”) motivation to combine the prior art references. Neither the Board nor the examiner had provided any reasoning or analysis to support a motivation to combine references beyond stating it would have been “intuitive.” The Court noted that common sense can provide a motivation to combine prior art references, but explained that explicit and clear reasoning is needed to provide a rational underpinning for why common sense compels a finding of obviousness. Therefore, the Court vacated and remanded for additional findings and explanation by the Board.


Federal Circuit Establishes Legal Standard for Standing to Appeal Final Agency Action

In Phigenix, Inc.  v. ImmunoGen, Inc., Appeal No. 2016-1544, the Federal Circuit, for the first time, established the legal standard for demonstrating standing in an appeal from a final agency action.  The Federal Circuit held that a party seeking to establish such standing bears the same burden of production as that of a plaintiff moving for summary judgment.  When the party’s standing is not self-evident, the party must identify record evidence or, if standing was not an issue before the agency, submit additional evidence to the court at the first appropriate time.

In an inter partes review filed by Phigenix, the Board found Immunogen’s patent nonobvious. Prior to addressing obviousness, the Federal Circuit addressed ImmunoGen’s argument that Phigenix lacked standing for the appeal. The Federal Circuit set forth the following standard:  The appellant bears the burden of production, as that of a plaintiff moving for summary judgment, to introduce evidence of standing. This burden may be met by identifying record evidence sufficient to support its standing, or if standing was not an issue before the agency, by submitting affidavits or other evidence.  Such evidence must be submitted at the first appropriate time, usually in response to a motion to dismiss or in the opening brief.

Phigenix argued it had standing based on (1) the existence of ImmunoGen’s patent encumbering Phigenix’s licensing efforts of its own patent, (2) 35 U.S.C. § 141, the statute authorizing  appeal for parties dissatisfied with a final PTAB decision, and (3) the estoppel effect of PTAB decisions under 35 U.S.C. § 315(e) adversely impacting Phigenix’s ability to provide a contractual warranty.  Phigenix submitted declarations and a letter as evidence of injury in fact.  

The Federal Circuit found the conclusory statements of Phigenix’s declarations and the allegations of hypothetical harm failed to meet the requirements of Fed. R. Civ. P. 56(c)(4).  The Federal Circuit also held that Phigenix could not base its injury in fact upon a violation of 35 U.S.C. § 141 because it has been permitted to file its appeal, and the exercise of its right to appeal did not necessarily establish Article III standing.  Further, the estoppel effect under 35 U.S.C. § 315(e) did not show injury in fact because Phigenix was “not engaged in activity that would give rise to a possible infringement suit.”


Actions Performed by Patients Were Attributable to Doctors Under Akamai V Divided Infringement Standard

In Eli Lilly and Company v. Teva Parenteral Medicines, Appeal No. 2015-2067, the Federal Circuit affirmed a finding of direct infringement attributable to physicians under the Akamai V divided infringement standard, which supported the district court’s finding of induced infringement of a pharmaceutical method claim. 

The district court determined that Teva induced infringement of Eli Lilly’s patent covering the method of administering a chemo therapy drug.  Doctors performed the underlying direct infringement.  On appeal, Teva argued that there was no direct infringement by a single actor because patients self-administer vitamins prior to the doctors’ administering of the drug.  Teva also argued that there was no attribution of the accused conduct to a single actor because a single entity did not direct or control the asserted method steps. 

The Federal Circuit held that that Eli Lilly had satisfied the two-prong test—outlined in Akamai v. Limelight, 797 F.3d 1020 (Fed. Cir. 2015) (Akamai V)—to prove direct infringement by more than one actor.  The product labeling instructed doctors and patients on dosage ranges and schedules.  Doctors would also discontinue treatment if they discovered patients were not following the prescribed regimen.  The Court held that this was sufficient evidence that the doctors (1) conditioned the patient’s participation in the activity, and (2) controlled the manner and timing of that performance.

Teva also argued that there was insufficient evidence of inducement.  But the Court found that self-administration of the vitamins was not merely a suggestion but rather a critical step in the doctors’ treatment regimen.  The Court also held that there was no requirement that Eli Lilly prove the general prevalence of the induced activity.  It was irrelevant that some users ignored label warnings.

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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