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Is Pleading “Generic” Enough to Plead Inducement?

by Christopher M. Bruno | Jul 11, 2024 | Patents

The US Court of Appeals for the Federal Circuit held that a branded pharmaceutical manufacturer properly pled a theory of inducement by alleging that the generic competitor promoted its product as “generic” to the branded product and referred to the branded product’s sales for patented uses. Amarin Pharma Inc. v. Hikma Pharmaceuticals USA Inc., Case No. 23-1169 (Fed. Cir. June 25, 2024) (Moore, Lourie, Albright, JJ.)

Amarin Pharmaceuticals sells the drug Vascepa, which the US Food and Drug Administration (FDA) approved for two uses:

To treat severe hypertriglyceridemia.
As an adjunct therapy to reduce certain cardiovascular risks.

In 2016, Hikma submitted an abbreviated new drug application (ANDA) to market a generic version of Vascepa, which at the time was only approved for treatment of severe hypertriglyceridemia. Hikma and Amarin then litigated patents covering Vascepa under the Hatch-Waxman Act, with Hikma invalidating the patent claims covering the severe hypertriglyceridemia indication. After Amarin obtained approval for its second indication, Hikma submitted to the FDA a “section viii carve out” (i.e., prescribing information that purposedly did not include the second indication). The FDA approved Hikma’s product, which was sold with a “skinny label.” After Hikma’s ANDA was approved, Hikma issued a series of press releases that referred to its product as a “generic” version of Vascepa, even though the product was not approved for the cardiovascular risk indication. The press releases also referred to Vascepa’s annual sales as approximately $1.1 billion – the amount of Vascepa scales for all uses – as well as its usage information.

Amarin sued Hikma again for patent infringement, this time claiming that Hikma induced infringement of patents covering the cardiovascular risk indication. The district court overruled the magistrate judge’s recommendation and concluded that Amarin’s complaint did not plead a plausible case of induced infringement. Amarin appealed.

The Federal Circuit reversed. First, it explained its view that the case was a “run-of-the-mill” inducement infringement case, rather than one governed by the Hatch-Waxman Act framework. Emphasizing the deferential plausibility standard applicable at the pleadings stage, the Court held that, combined with allegations that Hikma’s label included warnings that would promote infringement, Amarin’s averments about Hikma’s press releases were sufficient at this stage to plausibly claim that Hikma induced infringement of the cardiovascular risk limitation by its references to the branded product.

The Federal Circuit also rejected Hikma’s claim that a ruling in Amarin’s favor would “effectively eviscerate section viii carve-outs.” The Court explained that its ruling was an ordinary application of induced infringement that promotes scrutiny of generic companies’ communications for clarity and consistency.

Practice Note: This case continues the trend of inducement cases that has received renewed interest after GlaxoSmithKline v. Teva Pharmaceuticals. Branded pharmaceutical manufacturers may be emboldened to sue after launch based on theories of inducement where section viii carveouts were employed.

What Makes a Trademark Case “Exceptional” in the Fifth Circuit?

by Benjamin Ediger, Ph.D. | Jul 11, 2024 | Trademarks

The US Court of Appeals for the Fifth Circuit affirmed a senior party mark but found that the district court committed clear error in finding that a similar junior party mark was valid. The Fifth Circuit also found that the district court abused its discretion in awarding attorneys’ fees to the senior user. Appliance Liquidation Outlet, L.L.C. v. Axis Supply Corp., Case No. 23-50413 (5th Cir. June 21, 2024) (Smith, Haynes, Douglas, JJ.)

Appliance Liquidation Outlet (ALO), a decades-old appliance store in San Antonio, Texas, brought a trademark action under the Lanham Act and Texas law (which in all relevant aspects tracks the Lanham Act) against Axis Supply Corporation, another San Antonio appliance store that opened in 2021. Axis’s store and social media prominently featured the phrase “Appliance Liquidation”:

ALO noted that Axis’s opening happened to coincide with an influx of customers conflating ALO with Axis. ALO’s storefront had prominently displayed a banner reciting “Appliance Liquidation Outlet” for years:

Although ALO had never registered its mark, ALO had long engaged in a variety of promotional activities to raise brand recognition, including partnering with local sports teams and holding antique exhibitions and car shows.

Soon after Axis opened its store, ALO experienced a rush of customers who failed to differentiate between the stores and believed that ALO operated both. ALO requested that Axis stop using “Appliance Liquidation” and sued Axis in state court when Axis refused. Axis removed the dispute to the federal district court. After a bench trial, the district court held for ALO, enjoining Axis from using “Appliance Liquidation” and “Appliance Liquidation Outlet” and causing confusion between the two businesses. The district court also awarded attorneys’ fees under 15 U.S.C. § 1117(a) to ALO, finding that Axis’s decision to change its name only a week before trial (about 1.5 years into the dispute) amounted to litigating in an unreasonable manner. Axis appealed.

The Fifth Circuit affirmed the district court’s holding that Axis had infringed ALO’s “Appliance Liquidation Outlet” mark but assigned clear error to the district court’s finding that “Appliance Liquidation” was valid mark. The Fifth Circuit also found that the district court had abused its discretion in awarding attorneys’ fees to ALO.

With respect to the marks’ validity, the Fifth Circuit noted that both marks were unregistered and thus were not presumptively valid. The Court found that the record did not support the conclusion that “Appliance Liquidation” was a source identifier and thus found that it was not a valid mark. However, the Fifth Circuit was satisfied that “Appliance Liquidation Outlet” served as a source identifier. The Court found that although “Appliance Liquidation Outlet” was descriptive, the evidence established that San Antonian consumers perceived the mark as conveying information about ALO, not merely reflecting a class of services or businesses, and [...]

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Family Feud: Counterclaims Too Little, Too Late

by Kathleen Lynch | Jun 27, 2024 | Copyrights

The US Court of Appeals for the Seventh Circuit affirmed a district court’s ruling that aggrieved family members’ counterclaims for various intellectual property matters were long overdue and subject to a laches defense. Sumrall v. LeSEA, Inc., Case No. 23-2833 (7th Cir. June 12, 2024) (Scudder, Pryor, St. Eve, JJ.)

During Lester Frank Sumrall’s life, he created a legacy that began as a church, later blossoming into the Lester Sumrall Evangelical Association (LeSEA). Through LeSEA, Sumrall delivered his ministry from Indiana to the rest of the world via television, travel, writings and media productions. These works, including books and films (many of which Sumrall registered for copyrights in his or LeSEA’s name) are the subject of dispute. Particularly in dispute was the ownership of the “Traveler Photo,” a picture that Sumrall’s grandson Lester took during a ministry trip to China while Lester worked for LeSEA.

Sumrall’s death raised issues regarding succession. After his death, Sumrall’s sons, Peter, Stephen and Frank, took over LeSEA. Peter and Stephen relayed to Frank and others that Sumrall left all his assets to the ministry. Eight years later, Lester researched Indiana’s intestate succession law. Believing that Sumrall died without a will, Lester thought Frank should have inherited one-third of Sumrall’s estate. Under this belief, Frank granted Lester power of attorney to legally pursue his interest in the estate. For 12 years, Lester took no further legal action.

After learning that Sumrall did indeed have a will, Lester petitioned an Indiana probate court to open an estate for Sumrall in 2017. One of Lester’s cousins produced the will that granted some personal items to Sumrall’s grandchildren, with the remainder of his estate divided among his sons equally. The probate court denied the petition, reasoning that the estate was devoid of assets.

This case began with LeSEA’s trademark infringement claims against Lester and a competitor Lester created, the LeSEA Broadcasting Corporation. Those claims were resolved after Lester stopped using LeSEA’s name and therefore were not on appeal.

At issue in the appeal were counterclaims brought by the Lester Sumrall Family Trust against LeSEA, LeSEA’s affiliate corporations, and Lester’s uncles and cousins who are currently involved in the ministry (collectively, LeSEA). Lester and the trust asserted that:

LeSEA unrightfully took ownership of Sumrall’s copyrights.
LeSEA unlawfully used the Traveler Photo in its materials.
The trust was entitled to damages for its state law claims.
LeSEA unlawfully continued to use Sumrall’s right of publicity.

The Seventh Circuit rejected the appellants’ assertion that they owned Sumrall’s copyrighted works. The Court ruled that the appellants’ copyright claim arose under the Copyright Act, which bars suits three years after they accrue. The Court explained that an ownership claim accrues “when plain and express repudiation of co-ownership is communicated to the claimant.” Here, repudiation occurred when Sumrall died 28 years prior to the counterclaim and Stephen and Peter declared in “plain and express” terms that LeSEA owned the copyrights and the remainder of the estate.

As for the Traveler Photo, the [...]

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E for Effort? PI Analysis in Trade Secret Suit Riddled With Errors

by Tessa Kroll | Jun 27, 2024 | Trade Secrets

The US Court of Appeals for the Federal Circuit reversed the granting of a sweeping preliminary injunction (PI) in a trade secret suit against a competitor, finding that the district court’s analysis failed to consider potentially dispositive issues and the requirements of the Defend Trade Secrets Act (DTSA). Insulet Corp. v. EOFlow, Co., Case No. 24-1137 (Fed. Cir. June 17, 2024) (Lourie, Prost, Stark, JJ.) Among other things, the district court:

Failed to consider whether the plaintiff’s claims were time-barred.
Used an incorrect definition of “trade secret.”
Based its irreparable harm analysis on an unsubstantiated fear of a competitor’s potential acquisition of the defendant.
Failed to meaningfully assess the balance of harm and the public interest factors.

Insulet and EOFlow are medical device manufacturers that make insulin pump patches. Insulet began developing its OmniPod product in the early 2000s and launched next-generation models in 2007 and 2013. EOFlow began developing its own insulin pump product, the EOPatch, in 2011 and began work on its second-generation product in 2017. Around the time that EOFlow began developing its second-generation device, four Insulet employees joined EOFlow.

In early 2023, Medtronic allegedly started a diligence process to acquire EOFlow. Shortly thereafter, Insulet sued EOFlow for trade secret misappropriation, seeking an injunction to bar all technical communications between EOFlow and Medtronic. The district court granted Insulet’s request, finding that Insulet was likely to succeed on its trade secret claim because EOFlow had hired former Insulet employees who retained Insulet’s confidential documents, and Medtronic’s intended acquisition of EOFlow would cause irreparable harm to Insulet. The injunction broadly prevented EOFlow from “manufacturing, marketing, or selling any product that was designed, developed, or manufactured, in whole or in part, using or relying on the Trade Secrets of Insulet.”

EOFlow appealed the injunction. EOFlow argued that the district court failed to address whether Insulet’s claim was time-barred under 18 U.S.C. § 1836(d) of the DTSA and to consider factors relevant to Insulet’s likelihood of success or meaningfully assess the balance of harm and public interest factors.

The Federal Circuit first observed that the district court had expressed no opinion regarding EOFlow’s § 1836(d) statute of limitations (SoL) argument, even though Insulet’s compliance with the SoL was a material factor that would significantly impact Insulet’s likelihood of success. This alone constituted an abuse of discretion meriting reversal.

The Federal Circuit found that even if the district court had addressed the SoL, the injunction was not adequately supported. The Federal Circuit explained that the district court had improperly and broadly defined “trade secret” as “any and all Confidential Information of Insulet,” where “Confidential Information” was defined by the district court to mean any materials marked “confidential” as well as any CAD files, drawings or specifications. The Federal Circuit explained that the district court should have required Insulet to define the allegedly misappropriated trade secrets with particularity. Instead, the district court allowed Insulet to “advance a hazy grouping of information” and stated that “it would be unfair to require at [...]

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Rum Wars: Lanham Act Doesn’t Preclude Judicial Review of PTO Renewal Decisions

by Kavya Rallabhandi | Jun 27, 2024 | Trademarks

The US Court of Appeals for the Fourth Circuit reversed and remanded a district court’s ruling, holding that the Lanham Act does not foreclose an Administrative Procedure Act (APA) action for judicial review of the US Patent & Trademark Office’s (PTO) compliance with statutes and regulations governing trademark registration renewal. Bacardi & Co. Ltd. v. USPTO, Case No. 22-1659 (4th Cir. June 13, 2024) (Rushing, Richardson, Motz, JJ.)

The Arechabala family exported rum to the United States using the registered HAVANA CLUB trademark until the Cuban government expropriated Arechabala’s assets without compensation and let the HAVANA CLUB trademark expire. Empresa Cubana Exportadora de Alimentos y Productos Varios (Cubaexport) then registered HAVANA CLUB as a trademark in the US for itself. Bacardi & Company Limited and Bacardi USA, Inc. (collectively, Bacardi) obtained an interest in the HAVANA CLUB mark from the Arechabala family, filed a US trademark application for HAVANA CLUB and petitioned the PTO to cancel Cubaexport’s registration. Upon the PTO’s denial of Bacardi’s trademark application and cancellation petition, Bacardi filed a civil action challenging these administrative rulings.

Two years later, Cubaexport was required to renew its HAVANA CLUB trademark registration under Section 8 of the Lanham Act. Because of a trade embargo, Cubaexport sought a specific license from the US Department of the Treasury’s Office of Foreign Assets Control (OFAC) to pay the renewal fee, but OFAC denied the request. OFAC’s denial resulted in the PTO denying renewal of Cubaexport’s HAVANA CLUB registration. Cubaexport petitioned OFAC and the PTO to reverse their decisions. Ten years later, once OFAC issued a special license to Cubaexport, the PTO permitted Cubaexport to renew its HAVANA CLUB trademark registration.

Bacardi sued the PTO under the APA, claiming that the PTO Director violated Section 9 of the Lanham Act and the PTO’s own regulations by purporting to renew a trademark registration 10 years after it expired. The district court ruled that the Lanham Act precluded judicial review under the APA and thereby dismissed Bacardi’s lawsuit for lack of subject matter jurisdiction. Bacardi appealed.

The Fourth Circuit reversed, finding that “[n]othing in the Lanham Act expressly precludes judicial review of the PTO’s trademark registration renewal decisions.” In fact, Section 21 of the Lanham Act specifically authorizes, rather than forecloses, parties dissatisfied with certain decisions of the Director or the Trademark Trial & Appeal Board to appeal to the US Court of Appeals for the Federal Circuit or institute a civil action in federal district court. Section 21 of the Lanham Act also does not limit proceedings under sections or statutes such as the APA, and the Lanham Act is silent as to whether a third party may seek judicial review of the PTO’s decision to grant a renewal application.

Having found nothing in the Lanham Act that expressly precludes judicial review of PTO registration renewal decisions or fairly implies congressional intent to do so, the Fourth Circuit concluded that the APA’s mechanism for judicial review remains available.

What Do You Meme? TFW Commercial Use Outweighs Fair Use

by Anisa Noorassa | Jun 20, 2024 | Copyrights

The US Court of Appeals for the Eighth Circuit affirmed a district court’s copyright infringement decision, finding that a congressional reelection campaign’s use of a popular meme to solicit donations was commercial in nature and therefore not fair use. Laney Griner v. King for Congress, Case No. 22-3623 (8th Cir. June 7, 2024) (Benton, Erickson, Kobes JJ.)

Laney Griner owns the copyright for the popular meme “Success Kid,” which is a photograph of then 11-month-old Sam Griner with his hand in a fist clenching sand at the beach.

Griner took the photograph in 2007. The photograph went on to become one of the first viral memes, with billions of internet users spreading the image with a variety of captions. Griner registered the copyright of the Success Kid meme in 2012 and has since licensed that photograph to many companies, including Virgin Mobile, Vitamin Water, Microsoft and Coca-Cola, for commercial use.

Steven King served as a congressional representative from Iowa from 2003 to 2021. During his 2020 reelection campaign, the King for Congress Committee, which supported the congressional campaign, posted the meme on its website, Facebook and Twitter in an effort to seek donations:

After requesting the removal of the posts to no avail, Griner filed a lawsuit for copyright infringement and violation of Sam’s privacy. The jury found that neither the committee nor the congressman violated Sam’s privacy, but it did find that the committee (but not the congressman) had “innocently” infringed Griner’s copyright. The jury awarded $750 in damages, which is the statutory minimum. The committee appealed.

The committee argued that its use of the meme was fair use under Section 107 of the Copyright Act. Under the Copyright Act, four factors define fair use:

The purpose and character of the use, including whether such use is of a commercial nature or is for nonprofit educational purposes
The nature of the copyrighted work
The amount and substantiality of the portion used in relation to the copyrighted work as a whole
The effect of the use upon the potential market for or value of the copyrighted work

The Eighth Circuit found that the first factor weighed against the committee since the post clearly used the meme to call for donations and was undoubtedly commercial in nature. The commercial nature of the use voided the committee’s argument that the meme had been used millions, if not billions, of times without permission by users across the internet. Likewise, the “transformative elements” that the committee added (original text) were not persuasive enough to overcome this commercial nature. The Court found that the third factor also weighed against the committee since the “most substantial part of the work,” the “Success Kid himself,” was used in the committee’s post. The Court found that the fourth factor weighed in neither party’s favor, despite [...]

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Fourth Estate Redux: Dismissal for Lack of Registration Not on the Merits

by Karen Gover | Jun 20, 2024 | Copyrights

In the latest development of a complicated eight-year court battle regarding a copyright infringement claim, the US Court of Appeals for the First Circuit vacated and remanded the district court’s dismissal on claim preclusion grounds. The Court concluded that dismissal for failure to register the copyright was not “on the merits,” and therefore preclusion did not apply. Foss v. Marvic Inc. et al., Case No. 23-1214 (1st Cir June 10, 2024) (Barron, C.J.; Lipez, Kayatta, JJ.)

In 2006, Cynthia Foss designed a brochure for Marvic, a purveyor of sunrooms, for $3,000. Foss’s grievance with Marvic began in 2016 when she discovered that Marvic had been using a modified version of that brochure without permission. Foss filed a copyright infringement claim in January 2018 demanding $264,000. She inaccurately alleged that she had applied to register the copyright for the brochure. Eight months later, Foss amended her complaint, falsely alleging that she had registered the brochure with the US Copyright Office in February 2018 when in fact she had only applied for registration.

The district court stayed the action pending the Supreme Court’s decision in Fourth Estate v. Wall-Street, which construed 17 U.S.C. § 411(a) to require registration before a copyright claimant may sue for infringement. After Fourth Estate was issued, the district court dismissed Foss’s copyright infringement claim because the Copyright Office had not acted on her application for copyright. Later, the Copyright Office granted Foss a copyright registration in the brochure. Rather than move for reconsideration of the dismissal of her claim in the first action, Foss filed an appeal, which she lost.

After losing the appeal, Foss filed a second copyright infringement complaint against Marvic based on the same facts as the first. Foss also filed an amended complaint naming Charter Communication. She sought a declaratory judgment that Charter was not entitled to assert a safe harbor defense under the Digital Millenium Copyright Act (DMCA). Marvic and Charter filed motions to dismiss. In February 2023, the district court granted the motions, finding that “[b]ecause Foss’s prior copyright infringement claim against Marvic was dismissed with prejudice, [we] agree[d], for substantially the reasons stated in their supporting memorand[a], that her copyright claims . . . are barred by res judicata.” Foss appealed.

On the issue of claim preclusion, the First Circuit concluded that the first dismissal had not been a “final judgment on the merits” because it was based exclusively on the failure to satisfy the precondition of registration. The Court noted that it had ruled on this issue in Foss v. Eastern States Exposition, another copyright infringement action brought by Foss. The Court explained that, as it concluded in the Eastern States Exposition case, dismissal due to lack of prior registration is “too disconnected from the merits of the underlying claim” to be claim preclusive.

Marvic argued that the prior dismissal “with prejudice” constituted a final judgment on the merits and that the dismissal was “a sanction” based on Foss’s “repeatedly ignoring court directives [...]

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New Arguments Yield Same Unpatentability Outcome

by Karen Gover | Jun 13, 2024 | Patents

On remand from the US Court of Appeals for the Federal Circuit in connection with inter partes review (IPR) proceedings, the Patent Trial & Appeal Board considered the petitioner’s reply arguments and evidence regarding the claim constructions that were first proposed in the patent owner’s response but again found that the claims were not unpatentable. Axonics, Inc. v. Medtronic, Inc., IPR2020-00712; -00680 (May 30, 2024) (Tartal, Jeschke, Dougal, APJ)

Axonics filed IPR petitions challenging two patents owned by Medtronic that are directed to the transcutaneous charging of implanted medical devices. In its petitions, Axonics did not propose any express claim constructions. In its preliminary response, Medtronic agreed that claim construction was not necessary. In its patent owner response, however, Medtronic – for the first time – advanced a new claim construction that differed from the interpretation of the relevant claims implied in Axonics’s claim charts. Axonics defended its own implicit construction but also offered new arguments and evidence that the prior art anticipated the patents even under the alternative construction. The Board adopted Medtronic’s new claim construction but refused to consider Axonics’s new arguments and evidence because they were first presented in the reply. The Board then found that Axonics failed to show by a preponderance of the evidence that the challenged claims were unpatentable. Axonics appealed.

Axonics did not dispute the new claim construction first introduced by Medtronic in its response and adopted by the Board; it argued only that the Board erred in refusing to consider its reply arguments and evidence under the new construction. The Federal Circuit agreed, concluding that in such a situation, “a petitioner must be given the opportunity in its reply to argue and present evidence of anticipation or obviousness under the new construction, at least where it relies on the same embodiments for each invalidity ground as were relied on in the petition.” The Court remanded for the Board to consider Axonics’s new arguments.

On remand, the Board considered Axonics’s new arguments and evidence that the challenged claims were unpatentable over the prior art under the new construction. It also considered Medtronic’s amended sur-reply. The Board again determined that none of the challenged claims were unpatentable. In its analysis, the Board pointed out that some of Axonics’s new arguments and evidence regarding what the prior art disclosed in light of the new claim construction were inconsistent with the arguments and evidence it initially offered in its petition. In particular, the Board observed that the declaration testimony of Axonics’s expert regarding the prior art, on which Axonics relied in its petition, did not support the new claim construction, even considering the expert’s supplemental declaration. The Board also rejected Axonics’s attempts in its post-remand brief to discredit Medtronic’s arguments as “untimely and wrong,” “incorrect” and “contradictory of the positions on infringement it has taken in district court.” Citing the Federal Circuit, the Board pointed out that in an IPR, the burden of persuasion to prove unpatentability by a preponderance of the evidence [...]

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The $X Factor: Demystifying Damages Calculations

by Keval Amin | Jun 13, 2024 | Patents

The US Court of Appeals for the Federal Circuit affirmed a district court’s decision to deny a defendant’s motion for a new trial on damages, finding that the plaintiff’s damages expert sufficiently showed that prior license agreements were economically comparable to a hypothetically negotiated agreement between the parties. EcoFactor, Inc. v. Google LLC, Case No. 23-1101 (Fed. Cir. June 3, 2024) (Reyna, Lourie, JJ.) (Prost, J., dissenting).

EcoFactor owns a patent directed to mitigating strain on the electricity grid by adjusting thermostat settings within HVAC systems. The patent describes a system where thermostats collect internal temperature readings and use them alongside external temperatures to estimate internal temperature change rates, including future predictions. EcoFactor sued Google alleging infringement based on Google’s Nest smart thermostat products.

After discovery, Google sought summary judgment, arguing that claims of EcoFactor’s patent were invalid as abstract ideas under 35 U.S.C. § 101. The district court denied this motion as well as Google’s Daubert motion to exclude the testimony of EcoFactor’s damages expert. At trial the jury found that Google infringed EcoFactor’s patent and awarded damages. The district court denied Google’s subsequent motions for judgment as a matter of law on noninfringement and for a new trial on damages. Google appealed.

Google raised three key issues. First, it argued that the district court erred in denying its motion for summary judgment. Second, Google asserted that the district court erred in denying its motion for judgment as a matter of law concerning the noninfringement of EcoFactor’s patent. Third, Google claimed that the district court wrongly denied its motion for a new trial on damages, arguing that EcoFactor’s damages expert opinion was based on unreliable methodology.

The Federal Circuit upheld the district court’s decision to deny summary judgment because there were genuine issues of material fact warranting a trial. The Court also affirmed the jury’s infringement verdict against Google, finding that it was supported by substantial evidence. Despite Google’s argument that its Nest thermostats did not meet the claims of EcoFactor’s patent, the Court concluded that expert testimony and corroborating documentation demonstrated otherwise.

On the damages issue, Google argued that EcoFactor’s expert testimony was unreliable because there was no evidence that the parties to the three license agreements used by the expert actually applied the royalty rate stated in the agreement. While Google acknowledged that each of the license agreements include a specified royalty rate, Google argued that each also included a “whereas” clause indicating that the licensee would pay EcoFactor a lump sum amount “set forth in this Agreement based on what EcoFactor believes is a reasonable royalty calculation of [$X] per-unit for . . . estimated past and [] projected future sales of products accused of infringement in the Litigation.” Google asserted that while the agreements may have included a stated rate, there was no evidence that the agreements actually applied the rate in calculating the lump sum payment.

The Federal Circuit rejected Google’s argument. The Court explained that the proposed royalty rate was derived from three [...]

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Interference Analysis Is a Two-Way Street

by Jacob Michael Bass | Jun 6, 2024 | Patents

On appeal from an interference proceeding, the US Court of Appeals for the Federal Circuit reversed a Patent Trial & Appeal Board decision that found the claims of the senior party’s patent were not invalid as time-barred under 35 U.S.C. § 135(b)(1). The Federal Circuit concluded that the “two-way test” requires looking to see if either set of pre-critical and post-critical date claims contains a material limitation not found in the other and not just looking to see if the post-critical date claims have additional material limitations. Speck et al. v. Bates et al., Case No. 22-1905 (Fed. Cir. May 23, 2024) (Dyk, Bryson, Stoll, JJ.)

35 U.S.C. § 135(b)(1), pre-AIA, provides that “a claim which is the same as, or for the same or substantially the same subject matter as, a claim of an issued patent may not be made in any application unless such a claim is made prior to one year from the date on which the patent was granted.” This has been described as a statute of repose that places a time limit on a patentee’s exposure to an interference, the deadline for which is referred to as the “critical date.” At issue in this appeal was the “long-standing” exception to § 135(b)(1) for instances where the applicant files its claim after the critical period but has already been claiming substantially the same invention as the patentee during the critical period.

This case involves drug-coated balloon catheter technology. Bates is the senior party that filed a patent application, and Speck is the junior party that owns an issued patent. Speck’s patent issued on September 4, 2012, whereas Bates filed his application on August 29, 2013, six days before the critical date of Speck’s patent (i.e., one year after the filing date). Bates amended the application on August 30, 2013 (still before the critical date), and canceled all of the original claims and replaced them with new claims. Bates later amended the claims after the critical date to add a requirement that the device be “free of a containment material atop the drug layer.” The amendment was made to overcome a rejection from the examiner during prosecution.

Speck filed a motion to terminate the interference on the ground that the claims of Bates’s application were time-barred under § 135(b)(1) because Bates amended the claims more than one year after Speck’s patent issued. Speck also moved the Board to find that the claims of Bates’s application were unpatentable for lack of written description.

The Board denied Speck’s motion to terminate under § 135(b)(1), finding that the later-amended claims did not differ materially from the claims in other patents and patent applications Bates owned that were filed prior to the critical date, because “Speck ha[d] not directed [the Board] to a material limitation of the Bates involved claims that is not present in the earlier Bates claims.” Speck filed a motion for rehearing, which the Board denied. The Board also denied Speck’s motion to find that Bates’s claims lacked [...]

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