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Bit Swap: Motivation to Modify Prior Art Needn’t Be Inventor’s Motivation

Addressing the issue of obviousness, the US Court of Appeals for the Federal Circuit reversed a Patent Trial & Appeal Board decision, finding that the challenged patent claims were obvious because a person of ordinary skill in the art (POSITA) would have been motivated to switch two specific information bits in a 20-bit codeword to improve performance. Honeywell Int’l Inc. v. 3G Licensing, S.A., Case Nos. 23-1354; -1384; -1407 (Fed. Cir. Jan. 2, 2025) (Dyk, Chen, JJ.) (Stoll, J., dissenting).

3G Licensing owns a patent concerning a coding method for transmitting a channel quality indicator (CQI) in mobile communication systems. The CQI, a five-bit binary integer (0 to 30) is sent from user equipment, such as a cell phone, to a base station to indicate cellular connection quality. Base stations adjust data rates using adaptive modulation and coding, assigning higher rates to strong signals and lower rates to weaker ones. CQI accuracy is critical for maximizing data transmission efficiency and ensuring recovery of the original message despite transmission errors.

The challenged claims of the 3G patent relate to a CQI code designed to maximize protection of the most significant bit (MSB) to reduce the impact of transmission errors. The prior art disclosed a method and a basis sequence table that provided additional protection to the MSB, minimizing root-mean-square error. However, the claimed invention differed in that it required swapping the last two bits of the basis sequence table. The Board found that a skilled artisan would not have been motivated to make this modification to enhance MSB protection, nor would a skilled artisan have deemed it desirable. Honeywell appealed.

The Federal Circuit reversed, finding the claims obvious for four primary reasons. First, the Court determined that the Board incorrectly concluded that a POSITA would not have been motivated to swap the last two bits to improve MSB protection. The Court emphasized that the motivation to modify prior art does not need to align with the inventor’s motivation. As a result, the Board’s reasoning that minimizing root-mean-square error was not the patent’s primary purpose should not have been a primary consideration.

Second, the Federal Circuit found that prior art explicitly taught the importance of protecting the MSB through redundancy. A skilled artisan would have understood that swapping the two bits, as claimed, would add redundancy and enhance protection. Honeywell’s expert testimony further supported the conclusion that the prior art would have provided the requisite motivation to arrive at the claimed invention, and 3G’s expert did not dispute that the swap increased MSB protection.

Third, the Federal Circuit concluded that the Board improperly conflated obviousness with anticipation by requiring that the prior art disclose swapping the two bits. Anticipation requires the prior art to specifically disclose the claimed modification, but obviousness does not. The Court found that the Board erroneously treated the two standards as interchangeable.

Finally, the Federal Circuit found that the Board wrongly required that the claimed basis sequence table represent the preferred or most optimal combination. As the Court [...]

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Skilled Artisan’s View Is Decisive in Assessing Asserted Claim Drafting Error

The Court of Appeal (CoA) of the Unified Patent Court (UPC) clarified the legal standard for correcting obvious type inaccuracies in patent claims, explaining that the view of a skilled person at the filing date is decisive when assessing whether a patent claim contains an obvious error. Alexion Pharmaceuticals, Inc. v. Samsung Bioepis NL B.V., Case No. UPC_CoA_402/2024; APL_40470/2024 (CoA Luxembourg Dec. 20, 2024) (Grabinski, Blok, Gougé, JJ.; Enderlin, Hedberg, TJ.)

Alexion owns a European patent directed to a drug comprising an antibody that includes the “SEQ ID NO:4” amino acid sequence and that binds “complement component 5” (C5). The description refers to SEQ ID NO:4 as a sequence of 236 amino acids, and the claims also refer to SEQ ID NO:4. It is known in the state of the art that an antibody comprising the entire amino acid sequence, including amino acids forming a “signal peptide,” is unlikely to bind C5. Alexion sought provisional measures, arguing that Samsung infringed Alexion’s patent even though Samsung’s drug did not include the first 22 amino acids (i.e., the signal peptide in this case) of SEQ ID NO:4.

Originally, Alexion applied for the patent as granted but later requested to amend the claims to exclude the first 22 amino acids because of an obvious error during prosecution. The Technical Board of Appeal (TBA) of the European Patent Office (EPO) rejected the request and found that the requested amendment was not a correction of an obvious error.

The Court of First Instance similarly rejected Alexion’s request, although it found that Samsung made literal use of the patent. The Court of First Instance argued, contrary to the TBA, that the first 22 amino acids were meant to be excluded from SEQ ID NO:4 in the patent claim, and that this sequence was obviously not correctly reproduced in the view of a skilled person because otherwise the claimed drug would be unsuitable to bind to C5 (as was undisputed by the parties). However, the Court of First Instance rejected Alexion’s request for provisional measures against Samsung. The Court of First Instance clarified that it must consider not only its own claim interpretation but also the TBA’s different interpretation. Its rationale was that because it is the infringement-focused court, the Court of First Instance  should, before ordering provisional measures, consider whether the TBA, based on its interpretation, would revoke the patent in parallel proceedings because of insufficient disclosure under Article 83 of the European Patent Convention. Ultimately, considering the TBA’s claim interpretation, the Court of First Instance found that the patent’s validity was not certain to the extent required to provide provisional measures. Alexion appealed.

The CoA rejected Alexion’s appeal, finding that the Court of First Instance’s claim interpretation (i.e.,  excluding the first 22 amino acids from the claim ) was legally flawed. The CoA instead adopted the TBA’s claim interpretation and argued (on this point, not much different from the Court of First Instance) that the EPO was likely to revoke the patent. The [...]

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Transparency Is the Best Medicine: Device Parts Don’t Justify Orange Book Listing

The US Court of Appeals for the Federal Circuit affirmed a district court’s delisting of patents from the Orange Book because the patent claims did not “claim the drug that was approved” or the active ingredient of the drug that was approved. Teva Branded Pharmaceutical Products R&D, Inc., et al. v. Amneal Pharmaceuticals of New York, LLC, et al., Case No. 24-1936 (Fed. Cir. Dec. 20, 2024) (Prost, Taranto, Hughes, JJ.)

Teva owns the product that Amneal sought to delist, ProAir® HFA Inhalation Aerosol. The ProAir® HFA combines albuterol sulfate (the active ingredient) with a propellant and an inhaler device to administer the drug. Although the US Food and Drug Administration (FDA) approved Teva’s ProAir® HFA as a drug, the ProAir® HFA contains both drug and device components (the device components being the physical machinery of the inhaler). Teva lists nine nonexpired patents in the Orange Book for its ProAir® HFA.

Amneal filed an abbreviated new drug application (ANDA) seeking approval to market a generic version of the ProAir® HFA that uses the same active ingredient. Amneal asserted that it did not infringe Teva’s nine patents listed for the ProAir® HFA. Teva sued for infringement of six of those patents. Amneal filed counterclaims for antitrust and for a declaratory judgment of noninfringement and invalidity and sought an order requiring Teva to delist the five patents that it asserted against Amneal. Amneal moved for judgment on the pleadings on the ground that Teva improperly listed the asserted patents. The district court granted Amneal’s motion, concluding that Teva’s patents “do not claim the drug for which the applicant submitted the application.” The district court ordered Teva to delist its patents from the Orange Book. Teva appealed.

On appeal, Teva argued that a patent can be listed in the Orange Book if the claimed invention is found in any part of its new drug application (NDA) product. Teva argued that a patent “claims the drug” if the claim reads on the approved drug (i.e., if the NDA product infringes that claim). Teva also argued that according to the Federal Food, Drug, and Cosmetic Act’s broad definition of the word “drug,” any component of an article that can treat disease meets the statutory definition of a “drug.” With this interpretation, Teva’s patents “claim the drug” as the claim dose counter and canister components of the ProAir® HFA.

The Federal Circuit rejected Teva’s interpretation as overbroad because it would allow the “listing of far more patents than Congress has indicated.” The Court rejected Teva’s argument that a patent claiming any component of a drug is listable, explaining that Teva cannot list its patents just because they claim the dose counter and canister parts of the ProAir® HFA.

The Federal Circuit also rejected Teva’s argument that even if Teva’s statutory arguments were rejected, the Federal Circuit must remand the case to the district court to construe the claims. In doing so, the Court rejected Teva’s interpretation of the word “claims” in the listing and counterclaim/delisting provisions, [...]

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Motivation MIA? Federal Circuit Sends IPR Back to the Drawing Board

The US Court of Appeals for the Federal Circuit vacated and remanded a Patent Trial & Appeal Board decision, finding that the Board erred by failing to explain its holding and reasoning regarding a motivation to combine prior art references. Palo Alto Networks, Inc. v. Centripetal Networks, LLC, Case No. 23-1636 (Fed. Cir. Dec. 16, 2024) (Stoll, Dyk, Stark, JJ.)

Centripetal Networks owns a patent directed to correlating packets in communications networks, introducing an innovative system designed to enhance network security. The patent focuses on packets (small data segments that collectively form larger communications) and their correlation across network boundaries.

Palo Alto Networks challenged the patent’s validity in an inter partes review (IPR) and argued its obviousness based on three prior art references. The first reference described a system using hashing techniques to identify packets traversing network address translation boundaries and teaching how to correlate packets across such boundaries to identify hosts transmitting or receiving them. The second reference detailed methods for detecting unauthorized traffic directed to unused IP addresses, notifying administrators of potential threats, and enabling automated responses, such as blocking or filtering malicious traffic. The reference taught notifying administrators how to manage packets involved in malicious activity after they crossed a network boundary.

Palo Alto argued that combining the packet correlation techniques of the first reference with the notification mechanisms of the second addressed a key claim limitation of the challenged patent. Palo Alto contended that transmitting an indication of a malicious host, as taught by the second reference, naturally followed from the correlation system described in the first. However, the Board found that Palo Alto failed to provide sufficient evidence or argument to show that a person of ordinary skill in the art (POSITA) would recognize the claimed responsiveness between the first reference’s packet correlation and the second reference’s notification mechanisms. Palo Alto appealed.

The Federal Circuit vacated and remanded the Board’s decision, finding that the Board erred by failing to clearly articulate its rationale regarding the motivation to combine the prior art references and whether their combination satisfied the critical limitation of the challenged patent claim. The Court emphasized that the proper inquiry in an obviousness analysis is not whether each reference individually discloses all claim elements but whether their combination would have rendered the invention obvious to a POSITA.

Palo Alto maintained that the Board did not dispute the existence of a motivation to combine and improperly searched for a “bridge” solely within the two references. Centripetal countered that Palo Alto had not established a motivation or provided evidence of a necessary connection – or “bridge” – between the prior art and the claimed invention.

The Federal Circuit determined that the Board’s decision lacked a definitive finding on whether a POSITA would have been motivated to combine the first reference’s correlation techniques with the second reference’s notification step. The Court noted that Palo Alto presented logical and evidentiary support as to why such a combination would make sense, arguing that without a notification step, the [...]

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UPC Issues First FRAND Decision

In a landmark decision, the Unified Patent Court’s (UPC) Local Division Mannheim set standards for enforcing standard essential patents (SEPs) and for negotiating fair, reasonable, and nondiscriminatory (FRAND) licenses under SEPs. In line with the framework previously established by the Court of Justice of the European Union in Huawei Technologies Co. Ltd. v. ZTE Corp., the judgment outlines the obligation on parties in FRAND negotiations. Panasonic Holdings Corp. v. Guangdong OPPO Mobile Telecommunications Corp., Ltd., OROPE Germany GmbH, Case No. UPC_CFI_210/2023; ACT_545551/2023 (Local Division Mannheim Nov. 22, 2024) (Tochtermann, J.; Bötter, J.; Brinkman, J.; Loibner, TJ.)

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The Devil Is in the Details: Bioequivalence, In Vitro Testing Not Enough to Establish Infringement

Addressing for the first time the issue of whether bioequivalence data and in vitro testing can show that an abbreviated new drug application (ANDA) product with different immediate and delayed release portions infringed on a patent, the US Court of Appeals for the Federal Circuit upheld the district court’s finding of noninfringement. Galderma Laboratories, L.P. v. Lupin Inc., Case No. 24-1664 (Fed. Cir. Dec. 6, 2024) (Moore, C.J.; Linn, Prost, JJ.)

Galderma owns and markets Oracea® (doxycycline USP) 40 mg capsules, which are used to treat papules and pustules associated with rosacea. Galderma’s patents cover a unique once-daily oral formulation of doxycycline, combining 30 mg of immediate release (IR) and 10 mg of delayed release (DR) pellets. Lupin filed an ANDA to market a bioequivalent 40 mg doxycycline product, featuring 22 mg IR and 18 mg DR pellets, and using the same enteric polymer for the DR portion as Oracea®. Galderma sued Lupin under the Hatch-Waxman Act, alleging patent infringement.

Despite Lupin’s different pellet composition, Galderma contended that Lupin’s product effectively contained 30 mg IR and 10 mg DR because of a “weak enteric coat” on the DR pellets, causing early release of some doxycycline. Lupin presented two key pieces of evidence:

  • A two-stage in vitro dissolution test at pH 1.1 and 4.5, showing some DR pellet release at pH 4.5.
  • Bioequivalence data comparing Oracea® and Lupin’s product.

The district court ultimately ruled in favor of Lupin. Galderma appealed. The issue on appeal was whether Galderma’s evidence of bioequivalence and in vitro testing was indeed insufficient to establish literal infringement or infringement under the doctrine of equivalents (DoE).

The Federal Circuit agreed with the district court: in vitro testing and bioequivalence were not enough to establish literal infringement. Crucially, Galderma’s two-stage in vitro dissolution test didn’t accurately mimic in vivo conditions. The Court highlighted that the pH 4.5 environment used in the test wasn’t physiologically relevant for a fasted stomach, which typically has a pH between 1 and 2. Moreover, the bioequivalence data failed to address the differing proportions of IR and DR pellets. Consequently, the Court found no clear error in the district court’s factual findings.

Nor did the DoE save Galderma. The Federal Circuit applied two different tests: the function-way-result test and the insubstantial differences test. Under the function-way-result test the court is charged with determining whether the accused product performs the same function, in the same way, to achieve the same result as the claimed invention. Under the insubstantial differences test – as its name suggests – the court is charged with determining whether the differences between the claimed invention and the accused product are insubstantial.

Again, Galderma relied on bioequivalence data and its in vitro testing to argue that either DoE test was satisfied. The Federal Circuit was not persuaded, finding no clear error in the district court’s reasoning. As for the function-way-result test, the in vitro testing did not show that Lupin’s ANDA product used the same function or method as the asserted [...]

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Neck or Nothing? “Quotation” Invalidates On-Sale Bar

The US Court of Appeals for the Federal Circuit found the patents at issue invalid based on the patent owner’s “quotation” letter to a third party, concluding it was a commercial offer for sale under pre-America Invents Act (AIA) 35 U.S.C. § 102(b) notwithstanding the patent owner’s reservation of a post-quote acceptance. Crown Packaging Technology, Inc. v. Belvac Production Machinery, Inc., Case Nos. 22-2299; -2300 (Fed. Cir. Dec. 10, 2024) (Dyk, Hughes, Cunningham, JJ.)

Crown Packaging Technology owns patents for necking machines, which reduce the top diameter of metal beverage cans. The earliest priority date for the patents was April 24, 2008, setting the critical date of April 24, 2007. On November 14, 2006, Crown sent Complete Packaging Machinery a letter quoting one of its necking machines that embodied the claims of its patents.

Crown sued Belvac Production Machinery for infringing Crown’s patents. Belvac raised an invalidity defense under § 102(b), contending that Crown’s pre-critical-date letter to Complete Packaging constituted a commercial offer for sale, which rendered the patents invalid. On summary judgment, Crown argued that its letter could not create a binding contract, was not a commercial offer for sale, and was not an offer for sale “in this country” as required by § 102(b). The district court agreed with Crown, finding that the letter was merely an invitation to make an offer, not an offer in itself. At trial, the jury found the patents valid but not infringed. Both parties appealed.

The Federal Circuit reversed the district court’s validity determination, finding that Crown’s letter was an invalidating offer for sale under § 102(b). The Court’s analysis involved five factors:

  • Whether the subject of the offer embodied the claims of the patents.
  • Whether the offer occurred “in this country.”
  • Whether the offer predated the critical date.
  • Whether the invention was the subject of a commercial offer for sale.
  • Whether the invention was ready for patenting.

Crown conceded that the necking machine embodied the asserted patent claims, was ready for patenting, and that the letter predated the critical date. Thus, the dispute focused on whether the letter was a commercial offer for sale and whether it was made “in this country.”

The Federal Circuit determined that the letter was a commercial offer for sale. While labeled as a “quotation,” the letter included definite terms typically associated with a binding offer, such as pricing, delivery schedules, payment terms, warranties, and liability conditions. These terms established the mutual obligations of the parties. The Court found that the letter required immediate performance since Complete Packaging was obligated to pay 50% of the purchase price upfront and Crown committed to begin manufacturing upon receipt of payment. Also, despite an explicit clause requiring Crown’s written acceptance, the Court found that the letter was still a commercial offer for sale under established legal precedent.

The Federal Circuit also rejected Crown’s argument that the letter was not made “in this country.” Pre-AIA § 102(b) defines an offer made to a US company at its US [...]

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For Deterrence: Inherent Power to the Rescue to Punish Meritless Lawsuit

The US Court of Appeals for the Federal Circuit affirmed a district court’s decision to use its inherent power to award deterrence sanctions for filing a nuisance patent infringement lawsuit. PS Products Inc. v. Panther Trading Co. Inc., Case No. 2023-1665 (Fed. Cir. Dec. 6, 2024) (Moore, Stoll, Cunningham, JJ.)

PSP filed a design patent infringement lawsuit against Panther. PSP voluntarily dismissed the case with prejudice after Panther threatened to seek Rule 11 sanctions for the filing of a frivolous lawsuit. After the case was dismissed, Panther filed a motion seeking its attorneys’ fees under 35 U.S.C. § 285 and $100,000 in deterrence sanctions under the court’s inherent power. The district court found the case exceptional under § 285 and awarded Panther its attorneys’ fees. The district court also found PSP and its counsel joint and severally liable for $25,000 in deterrence sanctions. PSP did not appeal the finding that the case was exceptional or the decision to grant attorneys’ fees, but it did appeal the award of deterrence sanctions under the court’s inherent power.

Design patent infringement requires showing that an ordinary observer would find the accused product and claimed design “substantially the same” such that the observer would be deceived into believing that the accused product was the patented design. However, in some cases the accused product and the patented design are “plainly dissimilar” such that it would be clear to an ordinary observer the two designs were not “substantially the same.”

The Federal Circuit affirmed the district court’s award of deterrence sanctions, finding that the district court did not err by inferring PSP’s bad faith conduct based on the clear lack of legal merit of the case against Panther. The Court found that Panther’s accused product was “plainly dissimilar” to the patented design (shown below), such that PSP’s case was a nuisance lawsuit.

The Federal Circuit found that bad faith was also reasonably inferred based on PSP’s history of filing 25 meritless lawsuits in the same district, even though the district court did not analyze each suit. PSP cited the general venue statute in all 25 lawsuits rather than the required patent-specific venue statute, and PSP did not have proper venue in the lawsuit against Panther.

The Federal Circuit also found no abuse of discretion when the district court imposed sanctions under its inherent power. Rule 11 sanctions were unavailable since the case was already dismissed, but the district court had no other mechanism to sanction PSP’s bad faith conduct of filing multiple meritless lawsuits except the court’s inherent power. Finally, the Court found that imposing deterrence sanctions under the district court’s inherent power was proper even when it had already awarded attorneys’ fees and costs under § 285 because the statute does not preclude separate sanctions.

The Federal Circuit declined to award Panther its attorneys’ fees for the appeal because while PSP’s [...]

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Change Between Provisional and Nonprovisional Application Is Lexicography

The US Court of Appeals for the Federal Circuit affirmed a district court judgment of noninfringement, finding that deleting a portion of a definition between a provisional application and a nonprovisional application was evidence that the patentee intended to exclude the deleted language from the claim scope. DDR Holdings, LLC v. Priceline.com LLC and Booking.com B.V., Case Nos. 23-1176; -1177 (Fed. Cir. Dec. 9, 2024) (Chen, Mayer, Cunningham, JJ.)

DDR owns a patent directed to an e-commerce system involving “‘three main parties’ aside from the end consumer: merchants, hosts, and outsource providers.” The specification describes merchants as “the producers, distributors, or resellers of the goods to be sold through the outsource provider.”

DDR sued Priceline for infringement of four patents. In response, Priceline sought inter partes review (IPR), after which three of the challenged patents were found to be unpatentable. The Patent Trial & Appeal Board found that the fourth challenged patent was patentable over the cited prior art. Although the Board’s determination did not turn on the meaning of the term “merchants,” the Board construed “merchants” as “producers, distributors, or resellers of the goods or services to be sold.” In doing so, the Board applied the then applicable  “broadest reasonable interpretation” standard.

In the district court case, Priceline proposed that, consistent with the specification, “merchants” should be construed as only including purveyors of goods, while DDR sought to also include purveyors of services. The district court agreed with Priceline and adopted a construction that excluded services. Following the district court’s claim construction, the parties stipulated to noninfringement, agreeing that the court’s construction was case-dipositive in Priceline’s favor on the issue of infringement. DDR appealed.

The Federal Circuit affirmed. The Court reviews “claim construction based on intrinsic evidence de novo and review[s] any findings of fact regarding extrinsic evidence for clear error.” With only two exceptions, the Court gives terms “their plain and ordinary meanings to one of skill in the art when read in the context of the specification or during prosecution.” The exceptions are “when a patentee sets out a definition and acts as his own lexicographer” and “when the patentee disavows the full scope of a claim term either in the specification or during prosecution.”

Here, the provisional application for the asserted patent discussed merchants as both “producers of ‘goods’ in one instance, and ‘products or services’ in another.” The asserted patent did not mention services in relation to merchants, instead limiting “merchant” to purveyor of goods. The Federal Circuit found that a skilled artisan would interpret the deletion of the reference to “products or services” between the provisional application and the asserted patent as “indicat[ing] an evolution of the applicant’s intended meaning of the claim term.” The Court found that this was reinforced by the description that limited merchants to purveyors of goods.

DDR argued that incorporating the provisional application by reference into the specification resulted in “one document” and therefore no deletion took place. However, the Federal Circuit did not find this argument persuasive, explaining [...]

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Chromatographic Clash: When Is a Lead Compound Analysis Even Necessary?

The US Court of Appeals for the Federal Circuit affirmed the Patent Trial & Appeal Board’s determination that 79 challenged composition claims across three related patents were unpatentable but reversed the Board’s determination that four challenged process claims were not unpatentable. Cytiva Bioprocess R&D v. JSR Corp., et al., Case Nos. 23-2074; -2075; -2191; -2192; -2193; -2194; -2239; -2252; -2253; -2255 (Fed. Cir. Dec. 4, 2024) (Prost, Taranto, Hughes, JJ.)

The patents in question pertain to chromatography matrices used in affinity chromatography for isolating antibodies. Their primary focus was on the G29A mutation in SPA IgG binding domains, which enhances stability in alkaline environments. The Board upheld the patentability of the process claims while invalidating the composition claims. Cytiva appealed, arguing that the Board erred in its lead compound analysis. JSR cross-appealed on the Board’s finding that the challenged process claim were not unpatentable.

The Federal Circuit disagreed with Cytiva’s argument that a lead compound analysis was necessary. A lead compound analysis is an obviousness framework that involves a two-part inquiry: whether a skilled person in the art would have selected the compound as a starting point for research, and whether the prior art would have motivated the skilled person to modify the compound into the claimed invention. The Federal Circuit noted that lead compound analyses are not always required in chemical patent cases where the prior art references expressly suggest the proposed modification, which was the case here. The Court also explained that even though a lead compound analysis was used here, in this case the claimed compounds could all be lead compounds, and the prior art expressly suggested the G29A modification of the claimed compound.

The Federal Circuit also addressed whether a claim limitation that merely recites an inherent property of an otherwise obvious combination requires additional analysis to demonstrate that a person of ordinary skill in the art would have a reasonable expectation of success. The Court found that additional analysis was unnecessary because “the sole disputed limitation was an inherent property of the claimed composition already determined to be obvious.” The Court found that the Fab binding property of the chromatography matrices was inherent and thus did not require a separate reasonable expectation of success analysis.

As for the process claims that the Board found not unpatentable, the Federal Circuit determined that the composition and process claims were “nearly identical and contain[ed] no substantive distinction relevant to th[e] appeal.” Therefore, the Court held that the Board erred in separating the composition and process claims and found “no basis for treating the claims differently.” The Federal Circuit reversed the Board’s “not unpatentable” determination on those claims and held all challenged patent claims obvious and therefore unpatentable.




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