Priority Claims Cannot Be Incorporated by Reference

In Vanda Pharmaceuticals Inc. v. West-Ward Pharmaceuticals International Limited, Appeal Nos. 2016-2707 and 2016-2708, the Federal Circuit held that when a patent for a drug issues after an ANDA is filed, there can still be jurisdiction for an infringement lawsuit even when the ANDA is not amended until after the lawsuit is filed.  The Federal Circuit further held that method of treatment claims directed toward administering specific dosages of a drug in the presence or absence of a particular genotype are patent eligible. 

West-Ward filed an ANDA seeking approval to manufacture and sell a generic version of Vanda’s drug for treating schizophrenia patients.  After the ANDA was filed, Vanda filed suit alleging infringement of its patent.  While the first suit was pending, Vanda obtained a second patent for its drug and filed a second infringement lawsuit.  After the second lawsuit was filed, West-Ward amended its ANDA to assert that the second issued patent was invalid and/or not infringed.  The two lawsuits were consolidated, and the district court determined that the asserted patent claims were infringed through inducement and not invalid.  West-Ward appealed. 

The Federal Circuit first addressed whether the district court had jurisdiction over the second-filed lawsuit when the second patent issued after West-Ward filed its ANDA and where Vanda sued West-Ward for infringement before West-Ward amended its ANDA to submit a Paragraph IV certification for the second patent.  The Federal Circuit found that there was jurisdiction, in part, because Vanda’s complaint alleged West-Ward infringed the second patent under 35 U.S.C. § 271(e)(2)(A) by filing the ANDA.  The mere fact that West-Ward had not submitted a Paragraph IV certification for the second patent until after Vanda filed suit did not establish that there was no justiciable controversy.  

Next, West-Ward argued there was no infringement of the second patent because the patent issued after the ANDA was filed and Vanda sued for infringement before West-Ward submitted a Paragraph IV certification.  The Federal Circuit held that amendments to an ANDA can constitute an act of infringement.  The Federal Circuit also addressed the issue of induced infringement and held that Vanda did not need to prove an actual past instance of direct infringement by a physician to establish infringement under 35 U.S.C. § 271(e)(2)(A).  This section makes it possible for a patent owner to have a court determine whether, if a drug were put on the market, it would infringe the patent.  

The Federal Circuit then evaluated whether the asserted claims were patent eligible.  West-Ward argued that the asserted claims were ineligible under § 101 because they were directed to a natural relationship between the drug, CYP2D6 metabolism, and QT prolongation.  In its analysis, the Federal Circuit distinguished the claims at issue from those in Mayo Collaborative Services v. Prometheus Laboratories, Inc., 566 U.S. 66 (2012).  In Mayo, the claims were directed to a diagnostic method based on the relationships between concentrations of metabolites in the blood and the likelihood that a drug dosage would prove ineffective or cause harm.  In this case, the Federal Circuit held that the claims were patent eligible because they “are directed to a specific method of treatment for specific patients using a specific compound at specific doses to achieve a specific outcome.”  Accordingly, the Federal Circuit affirmed the district court’s decision and grant of injunctive relief. 

Judge Prost dissented, arguing that the asserted patent claims are directed to a law of nature and therefore constitute ineligible patent subject matter. 

A Clear Disclaimer of Claim Scope Requires More Than Potential Inferences Drawn From an Embodiment in the Specification 

In Sumitomo Dainippon Pharma Co. v. Emcure Pharmaceuticals, Appeal Nos. 2017-1798, 2017-1799, 2017-1800, the Federal Circuit held that a claim depicting a molecule encompassed the three-dimensional orientation of the molecule specifically depicted in the claim because the patentees had not disclaimed the relevant three-dimensional orientation. 

Defendants filed ANDAs to obtain approval to market generic versions of the schizophrenia and bipolar drug LATUDA, the active ingredient for which is lurasidone.  Plaintiffs thereafter sued Defendants for allegedly infringing a patent covering the lurasidone compound.  While lurasidone can exist in two distinct three-dimensional structures that are mirror images of one another (“enantiomers”), only the (-) enantiomer was depicted in the claim at issue.  Defendants argued for a construction that limited the claimed compound to a “racemic” (50/50) mixture of the two enantiomers. The Defendants supported their construction by citing similarities between the claimed compound and one disclosed in the specification.  The Defendants also relied on citations to chemistry textbooks which suggested the claimed structure depicted is a shorthand representation for a racemic mixture.  The district court disagreed and held that the claimed compound’s resemblance to a mixture disclosed in the specification did not justify importing limitations from the specification into the claim.  The district court agreed with Plaintiffs’ proposal to interpret the claim to cover both enantiomers and mixtures thereof.  Defendants stipulated to infringement under this construction, then appealed the district court’s decision. 

The Federal Circuit affirmed the district court’s construction, holding that the plain language of the claim negated a limiting interpretation because the claim itself showed the (-) enantiomer and failed to include any language limiting claim scope to a racemic mixture.  The Federal Circuit also found no evidence in the specification that the claim was intentionally linked or described as coextensive with a racemic mixture, or that the specification included a clear disclaimer of claim scope.  Although the Federal Circuit acknowledged Defendants’ arguments based on extrinsic evidence, the Federal Circuit found no clear error in the district court’s rejection of the chemistry textbooks as irrelevant or contradictory.  

PTAB Should Consider a Court’s Prior Claim Construction of the Same Term in the Same Patent

In Droplets, Inc. V. E*TRADE Bank, Appeal Nos. 2016-2504, 2016-2602, the Federal Circuit held that a priority claim must be explicitly stated in the patent and cannot be incorporated by reference from an earlier patent.   

E*TRADE petitioned for inter partes review of Droplets’ ’115 patent.  The ’115 patent specifically claimed priority only to the ’838 patent.  Droplets argued the ’115 patent was entitled to the benefit of an earlier provisional application because the ’115 patent incorporated by reference the ’838 patent, which claimed priority to the provisional application.  The Board held that incorporation by reference did not satisfy 35 U.S.C. § 120’s “specific reference” requirement to claim priority and invalidated all claims as obvious over the cited art.  Droplets appealed. 

Patent Office regulations require a priority claim under § 120 recite the application number and familial relationship either in an application data sheet or in the first sentence of the specification.  The Federal Circuit held that incorporating a different patent’s priority claim by reference did not meet those requirements.  The Federal Circuit noted that § 120 should be applied strictly to prevent placing the burden of deciphering priority on the public when the patentee was in the best position to do so.  Thus, the Federal Circuit affirmed.

IPR Petition Not Time Barred Because Petitioner Did Not Control Prior Litigation and Litigation Parties Were Not Real Parties in Interest in the IPR

In Wi-Fi One, LLC v. Broadcom Corp., Appeal No. 2015-1944, the Federal Circuit held that the IPR petition was not time barred because the IPR petitioner was not in privity with a district court defendant.  The evidence failed to show that (1) the petitioner had the right to control the district court litigation or (2) the district court defendants were real parties in interest in the IPR proceeding.

Ericsson, Inc. sued various defendants in district court for patent infringement.  Although not a defendant, Broadcom was the manufacturer of some of the chips that formed the basis for some of the infringement allegations.  More than a year after Ericsson filed its complaint, Broadcom requested inter partes review of the patent at issue, then owned by Wi-Fi.  Wi-Fi argued Broadcom’s petition was time-barred under 35 U.S.C. § 315(b) because Broadcom was in privity with the district court defendants.  The Board found Wi-Fi failed to prove privity and found the patent invalid.

Wi-Fi appealed, arguing the decision to institute was incorrect because Broadcom’s petition was time-barred.  The Federal Circuit panel initially refused to review the Board’s institution decision, citing the Federal Circuit’s prior decision in Achates Reference Publishing, Inc. v. Apple Inc., 803 F.3d 652 (Fed. Cir. 2015).  However, the en banc Federal Circuit later remanded this appeal to the panel because it had determined that the Board’s time-bar decisions at the time of initiation could be appealed.  

On remand, Wi-Fi argued that the Board’s privity test, whether the party in question had sufficient control over the prior proceeding, was erroneous because the Supreme Court had adopted a more flexible standard outside the patent context.  Wi-Fi also argued the Board abused its discretion when it refused Wi-Fi additional discovery on Broadcom’s role in the district court litigation.  The Federal Circuit affirmed the Board, concluding that, although Broadcom’s interests were generally aligned with the defendants, the evidence did not show that Broadcom had the right to control the previous litigation.  Nor did the evidence suggest that the defendants were real parties in interest in Broadcom’s IPR.  The Federal Circuit also determined the Board had not abused its discretion by denying Wi-Fi additional discovery because the Board reasonably found that the discovery Wi-Fi requested, including indemnity agreements, would likely not have established control.

Judge Reyna dissented, writing that the Board applied an erroneous standard for establishing privity because it limited its analysis to the “control” ground and ignored the other grounds for establishing privity set forth by the Supreme Court.  Judge Reyna also wrote that indemnity agreements evidenced privity and that the panel should have reversed the Board’s ruling denying Wi-Fi additional discovery.