Rajan Law Office Blog - Rajan Law Office, LLC | Intellectual Property & Litigation

rule 36 judgment has collateral estoppel effect

12/10/2018

On December 10, 2018, the Federal Circuit affirmed the PTAB's decisions finding that Apple had met its burden of proving the challenged claims as obvious because VirnetX was collaterally estopped from relitigating whether a prior art reference was a printed publication. VirnetX Inc. v. Apple, Inc., No. 2017-2490, -2494 (Fed. Cir. Dec. 10, 2018) Apple filed two IPRs challenging US 8,504,696 as obvious over a US patent and printed publication RFC 2401. VirnetX argued that RFC 2401 was not a 102(b) prior art but the Board disagreed and invalidated the challenged patent. During pendency of appeal in this case, the Federal Circuit affirmed the Board's decisions in another case between the same parties in which the Board found the RFC2401 to be a printed publication. Thereafter, Apple filed a notice of supplemental authority in this case notifying the court of the relevance of the Rule 36 judgment in the related case arguing that VirnetX was collaterally estopped from relitigating the printed publication issue.
According to the court, a party is collaterally estopped from relitigating an issue if: (1) a prior action presents an identical issue; (2) the prior action actually litigated and adjudged that issue; (3) the judgment in that prior action necessarily required determination of the identical issue; and (4) the prior action featured full representation of the estopped party. A Rule 36 judgment may serve as a basis for collateral estoppel if the issue was essential or necessary to the Rule 36 judgment. In affirming the Board's decision, the court reasoned that the question of whether RFC 2401 was a printed publication was essential to the Rule 36 judgment because each ground of unpatentability that VirnetX appealed in the related case relied on RFC 2401.
Full text of the opinion is available here.

Patent issue date is reference point for double patenting rejection

12/7/2018

On December 7, 2018, the Federal Circuit held that obviousness-type double patenting must consider the issuance date of the patent as the reference point for rejection where the patent issues from an application filed prior to June 8, 1995. Novartis Pharm. Corp. v. Breckenridge Pharm. Inc., No. 2017-2173 (Fed. Cir. Dec. 7, 2018)
Full text of the opinion is available here.

surnames with acquired distinctiveness trademark registrable

11/26/2018

On November 26, 2018, the Federal Circuit held that surnames that have acquired distinctiveness may be registered as a trademark. Schlafly v. St. Louis Brewery, LLC, No. 2017-1468 (Fed. Cir. Nov. 26, 2018). The Saint Louis Brewery has been selling beer with the SCHLAFLY logo since 1991 and applied for trademark registration in 2011 for use with various types of beer. The application was opposed by relatives with the same surnames. TTAB denied the opposition finding acquired distinctness of the mark by relying on the long continuous use of the mark, the geographic scope of use of the mark, the variety of products with the mark in commerce, the prominent placement of the mark on SLB's products, the large sales volume of SCHLAFLY beer, the marketing types and expenditures of SLB, total revenue for SCHLAFLY marked products, SLB's ranking among craft brewers in the U.S., awards won by SCHLAFLY beer, and media and other reports on SCHLAFLY beer products. The opposers of the mark argued that SLB failed to submit consumer surveys as evidence of secondary meaning.
In affirming the TTAB, the Federal Circuit ruled that surnames may be registered as trademark upon showing of acquired distinctness and that distinctiveness may be shown by both direct and circumstantial evidence. Because the Board found that the SCHLAFLY mark for beers had acquired secondary meaning, there is no bar to registration.
Full text of the opinion is available here.

2D plan view of shoe bottom satisfies section 112

8/20/2018

On August 20, 2018, a Federal Circuit panel, in a unanimous decision regarding a design patent application for a shoe bottom design, ruled that Section 112 requirements of enablement and definiteness may be satisfied by a single, 2D plan-view drawing as the ornamental design is capable of being disclosed and judged from such 2D view. In re Maatita, No. 17-2037 (Fed. Cir. Aug. 20, 2018). Applicant Ron Maatita filed a design patent application covering the design of an athletic shoe bottom with two figures showing a plan view of the claimed design. Examiner objected that the two figures were identical except for the unclaimed surrounding environment and rejected the single claim for failing to satisfy the enablement and definiteness requirements of 35 USC 112. Applicant responded that the figures represented the same embodiment and that the omission of certain design elements only affected the breadth of the claim. The examiner again rejected the claim reasoning that the examiner prepared four 3D rendering show different implementation of the 2D view and therefore, the claim failed to satisfy Section 112. The Board affirmed the examiner's decision. In reversing the Board decision, the Federal Circuit reasoned that the shoe design is similar to that of a rug, which is capable of being viewed and understood in two-dimensions through a plan-view illustration.
Full text of the opinion is available here.

USPTO not entitled to attorney fees under 35 usc 145

7/27/2018

On July 27, 2018, in a 7-4 decision the en banc court of the Federal Circuit held that the American Rule prohibits courts from shifting attorneys' fees from one party to another absent Congress' specific and explicit directive and that the USPTO is not entitled to such fees under 35 USC 145. Nantkwest, Inc. v. Iancu, No. 16-1764 (Fed. Cir. July 27, 2018) (en banc).
In this case, the Examiner rejected an application directed to a method of treating cancer based on obviousness and the Board affirmed the decision. The applicant sought review in the district court (E.D. Va.) under 35 USC 145 and the court issued a summary judgment in favor of the USPTO. USPTO then sought reimbursement of expenses for the district court proceeding under Section 145 including attorneys fees of over $78,000. The district court denied the fees citing the American rule which requires each litigant to pay for his/her attorney's fees. On appeal, a Federal Circuit panel reversed the decision and the en banc court ordered review sua sponte.
The en banc court affirmed the district court's decision in a 7-4 decision. Writing for the majority, Judge Stoll reasoned that the word "expenses" does not include an implicit authorization to award attorneys fees under Section 145. According to the Court, the existence of several Patent Act provisions awarding attorneys fees demonstrates Congress' use of "specific and explicit" language in the Patent Act to shift fees when it so desired. Judge Prost, in her dissent joined by Judges Dyk, Reyna and Hughes, argued that the text of Section 145 imposing "all expenses" on the applicant displaces the American Rule.
Full text of the opinion is available here.

sovereign immunity challenges to IPR rejected

7/20/2018

Federal Circuit affirmed the PTAB's denial of a motion by Saint Regis Mohawk tribe to dismiss, on the basis of sovereign immunity, an IPR proceeding against patents that were assigned to the Tribe by Allergan. St. Regis Mohawk Tribe v. Mylan Pharm. Inc., Nos. 18-1638, -1639 (July 20, 2018). Allergan, owner of patents relating to Restasis product for alleviating symptoms of chronic dry eye, sued several generics including Mylan in E.D. Texas. Mylan filed an IPR challenging the patents and the PTAB instituted the IPRs. Prior to a scheduled oral hearing Allergan entered into an agreement transferring the patents to the Tribe. The Tribe then moved to terminate the IPRs asserting tribal sovereign immunity and the Board denied the motion.
On appeal, the Federal Circuit held that sovereign immunity cannot be asserted in IPRs. In affirming the Board's denials, the Court reasoned that IPR is neither a judicial proceeding instituted by a private party or an enforcement action brought by the federal government. According to the court, the "immunity does not apply where the federal government acting through an agency engages in an investigative action or pursues an adjudicatory agency action."
Full text of the opinion is available here.

Patent owner eligible to recover lost foreign profits, rules US supreme court

6/22/2018

On June 22, 2018, in a 7-2 decision, the U.S. Supreme Court held that a patent owner may recover lost foreign profits under 35 USC 284 for infringement under Section 271(f)(2). WesternGeco LLC v. Ion Geophysical Corp., 585 U.S. __ (2018). WesternGeco LLC, owner of four patents relating to lateral-steering technology for surveying the ocean floor, performs surveys for oil and gas companies using its patented technology. ION Geophysical manufactured components in the US and shipped to companies abroad who combined them to create a competing system indistinguishable from WesternGeco. WesternGeco sued for patent infringement under Section 271(f)(1) and (f)(2). At trial, WesternGeco proved that it lost 10 contracts due to ION's infringement and the jury awarded damages of $12.5 million in royalties and $93.4 million in lost profits. The district court denied ION's post-trial motion to set aside the verdict and dismissed the arguments that 271(f) does not apply extraterritorially to lost profits. On appeal, the Federal Circuit reversed the award of lost-profits damages holding that Section 271(a) does not allow patent owners to recover for lost foreign sales. The Court granted cert, vacated the Federal Circuit's judgment and remanded it in light of its Halo Elec. v. Pulse Elec. decision. On remand, the Federal Circuit reinstated its decision regarding the extraterritoriality of Section 271(f). The Court again granted cert.
In his opinion, Justice Thomas acknowledged that there's a presumption against extraterritoriality of federal statutes but questions of extraterritoriality are determined using a two-step framework. The first step asks whether the presumption has been rebutted by a clear indication of extraterritorial application in the statutory text. The second step asks whether the case involves a domestic application of the statute, which is determined by identifying the statute's focus and asking whether the conduct relevant to that focus occurred in the U.S territory. If it did, then it's a permissible domestic application of the statute. In resolving this case under step two using the court's discretion, the Court reasoned that step one would require resolving difficult questions that do not change the outcome of the case but could have far-reaching effects in future cases.
Justice Thomas, citing the Court's decision in RJR Nabisco v. European Community, which found that conduct relevant to a statute's focus which occurs in the U.S. involves a permissible domestic application of the statute, even if other conduct occurred abroad. The Court found that the focus of Section 284, in a case involving infringement under Section 271(f), is on the act of exporting components from the U.S. and therefore, the focus is domestic conduct. Because ION's domestic act of supplying the components that infringed WesternGeco's patents, lost-profits damages that were awarded were a domestic application of Section 284.
In his dissenting opinion, joined by Justice Breyer, Justice Gorsuch agreed with the Federal Circuit's result in concluding that the Patent Act forecloses claim for lost profits because in their view the Act's terms prohibit the lost profits sought in the case whatever the general presumption against extraterritoriality applicable to all statutes might allow.

inventor testimony insufficient to prove conception date

4/17/2018

On April 17, 2018, the Federal Circuit affirmed the PTAB's finding that patent owner failed to sufficiently corroborate inventor's testimony of conception. Apator Miitors APS v. Kamstrup A/S, No. 2017-1681 (Fed. Cir. Apr. 17, 2018) (Moore, J.). Kamstrup filed an IPR and Board instituted based in part on Nielsen. During trial, Apator attempted to swear behind Nielsen's effective filing date by proffering a declaration from the inventor. PTAB found that the only evidence of an earlier conception date was the inventor's declaration and that "mere unsupported evidence of the alleged inventor, on an issue of priority" was insufficient proof of prior conception. Based on its finding, the PTAB found the claims to be unpatentable in view of Nielsen reference. On appeal, the Federal Circuit, a panel consisting of Judges Moore, Linn and Chen, affirmed finding that substantial evidence supported the PTAB's finding. The Court reasoned that Apator failed to meet its burden of proof because the email evidence provided to support an earlier conception date failed to indicate that a file relating to the invention was attached.
Full text of opinion is available here.

Section 271(e) infringement applies for anda amendments

4/13/2018

On April 13, 2018, the Federal Circuit held that 35 USC 271(e) infringement applies for ANDA amendments including paragraph IV certification for later-issued patent. Vanda Pharma. Inc. v. West-Ward Pharma. Int'l Ltd., No. 16-2707 (Fed. Cir. Apr. 13, 2018). Vanda owns '610 patent for schizophrenia treatment using iloperidone and has an exclusive license to expired '198 patent which covers the iloperidone compound. Vanda owns a NDA for antipsychotic drug Fanapt (iloperidone) and West-Ward filed an ANDA before '610 issued or was listed in the Orange Book. Vanda sued West-Ward for infringement of '198 patent. After '610 patent issued, Vanda sued for infringement of '610 patent and then Vanda listed '610 patent in the Orange Book. West-Ward amended its ANDA to contain para IV certification that '610 patent is invalid and/or not infringed and sent Vanda the para IV notice re '610 patent. The district consolidated the two lawsuits and found that West-Ward's submission of para IV certification for '610 patent was an act of infringement.
On appeal, the Federal Circuit, in a split decision, held that amending the ANDA by submitting a para IV certification is an act of infringement under the Hatch-Waxman act even if the patent issued after the ANDA filing but before FDA approval. The majority reasoned that the legislative history supports the conclusion that "application," as referred to in Section 271(e)(2)(A), includes ANDA amendments.
Full text of the opinion is available here.

ptab's time-bar determinations appealable, rules fed. cir. en banc

1/9/2018

On Jan. 8, 2018, the en banc court of the Federal Circuit held that the time-bar determinations under 35 USC 315(b) are appealable and overruled the court's 2015 ruling in Achates. Wi-Fi One, LLC v. Broadcom Corp., Nos. 2015-1944, -1945, -1946 (Fed. Cir. Jan. 8, 2018) (en banc) According to the Court, there was no clear and convincing indication of congressional intent barring judicial review of USPTO's action denying institution of inter partes review that are filed more than one year after the petitioner is served with a complaint for patent infringement.

Full text of the opinion is available here.