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

Supreme court affirms federal circuit's on-sale bar decision in helsinn

1/22/2019

On Jan. 22, 2019, the U.S. Supreme Court unanimously affirmed Federal Circuit's decision regarding "on sale" bar under AIA's 35 USC 102(a)(1) by holding that the catchall phrase "otherwise available to the public" did not alter the meaning of "on sale." Helsinn Healthcare S.A. v. Teva Pharm. USA, Inc., 586 U.S. ___ (2019). Petitioner Helsinn, a Swiss pharma, acquired rights to palonosetron, the active ingredient in Aloxi. Helsinn submitted protocols for Phase III clinical trials for 0.25mg and 0.75mg dose of palonosetron. Helsinn and MGI Pharma entered into a license agreement, and a supply and purchase agreement. Both agreements included the dosage information and MGI disclosed these agreements in its SEC 8K filing after redacting the dosage information. Two years thereafter, Helsinn filed a provisional patent application covering the above dosages and the asserted patent issued from an application filed on May 2013 claiming priority to the provisional application. Teva filed an ANDA and asserted that the patent was invalid because the 0.25mg dose was "on sale" more than one year before Helsinn filed the provisional patent application.
The district court concluded that the "on sale" provision did not apply because the public disclosure of the agreements did not disclose the dosages and therefore the invention was not "on sale" before the critical date. The Federal Circuit reversed concluding that "if the existence of the sale is public, the details of the invention need not be publicly disclosed in the terms of sale" to fall within the AIA's on-sale bar. In affirming the Federal Circuit, the Supreme Court reasoned that the Court's precedence suggest that a sale or offer of sale need not make an invention available to the public and that "secret sales" can invalidate a patent. According to the Court, the phrase "on sale" had acquired a well-settled meaning when the AIA was enacted and that Congress did not intend to upset that precedent with the addition of a broad catchall phrase. The Court then held that Congress did not alter the meaning of "on sale" when it enacted the AIA and that an inventor's sale of an invention to a third party who is obligated to keep the invention confidential can qualify as a prior art under 35 USC 102(a).
The takeaway from the Supreme Court's decision is that secret sales can be prior art. Any patent application filing must consider the date of such sales for prior art purposes.
Full text of the opinion is available here.

ttab must consider all evidence and arguments regarding likelihood of confusion

1/14/2019

On Jan. 14, 2019, the Federal Circuit vacated the Trademark Trial and Appeal Board's (TTAB) affirmance of an examiner's refusal to register the mark "GUILD MORTGAGE COMPANY" because TTAB failed to consider all of the evidence and arguments. In re Guild Mortgage Co., No. 2017-2620 (Fed. Cir. Jan. 14, 2019). Guild, a mortgage business, applied to register "Guild Mortgage Company" under class 36 for "mortgage banking services." Registration was refused due to likelihood of confusion between Guild's mark and mark "Guild Investment Management" registered in Class 36 for "investment advisory services." Examiner concluded a likelihood of confusion based on her findings that the marks, nature of services, and trade channels were similar and the Board affirmed the findings.
In vacating the Board's decision, the Federal Circuit enumerated the Du Pont factors that must be considered in a finding of likelihood of confusion, namely (1) the similarity/dissimilarity of marks in their entireties as to appearance, sound, connotation and commercial impression; (2) similarity/dissimilarity and nature of the goods/services as described in an application or registration or in connection with which a prior mark is in use; (3) similarity/dissimilarity of established likely-to-continue trade channels; (4) conditions under which and buyers to whom sales are made, i.e., "impulse" v. careful, sophisticated purchasing; (5) fame of prior mark (sales, advertising, length of use); (6) number and nature of similar marks in use on similar goods; (7) nature and extent of any actual confusion; (8) length of time during and conditions under which there has been concurrent use without evidence of actual confusion; (9) variety of good on which a mark is or is not used (10) the market interface between applicant and the owner of prior mark (11) the extent to which applicant has a right to exclude others from use of its mark on its goods (12) extent of potential confusion, i.e., whether de minimus or substantial (13) any other established fact probative of the effect of use. The court reasoned that the Board erred in failing to address Guild's argument and evidence related to DuPont factor 8. Particularly, Guild argued that the registrant and Guild have coexisted in business for over 40 years and operated in the same geographic market without any evidence of actual confusion.
Full text of the opinion is available here.

Rules for playing dice game patent-ineligible

12/28/2018

A Federal Circuit panel consisting of Judges Chen, Mayer and Bryson ruled that the method claims directed to rules for playing a dice game is patent-ineligible subject matter where the only arguable inventive concept relates to the dice markings. In re Marco Guldenaar Holding B.V., No. 2017-2465 (Fed. Cir. Dec. 28, 2018). Marco Guldenaar Holding B.V. filed a patent application directed to dice games intended to be played in casinos. Claim 1 recited, in part, a method of playing a dice game comprising "providing a set of dice, the set of dice comprising a first die, a second die, and a third die, wherein only a single face of the first die has a first die marking, wherein only two faces of the second die have an identical second die marking, and wherein only three faces of the third die have an identical third die marking." Examiner rejected claim 1, and other claims, as directed to an abstract idea of rules for playing a game which is a "method of organizing human activities." The claims were also rejected as obvious over matters old and well known to dice games applying the printed matter doctrine. The Board affirmed the rejections and the applicant appealed.

In affirming the Board's decision, the court reasoned that the claimed method of playing a dice game including placing wagers on whether certain die faces will appear face up is directed to a method of conducting a wagering game that was held patent-ineligible in In re Smith, 815 F.3d 816 (Fed. Cir. 2016). In dismissing the appellant's argument that the die markings on one, two, or three die faces amounts to "significantly more" than an abstract idea, the Court held that the markings constitute printed matter that falls outside the scope of Section 101 and the method of playing a dice game does not recite an inventive concept sufficient to transform the claimed subject matter patent-eligible. The alternative arguments based on obviousness were not reviewed by the court as the rejection of the appealed claims were affirmed under Section 101.

Full text of the opinion is available here.

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 as 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 a Rule 36 judgment, in another case between the same parties (VirnetX I) in which the Board found the RFC2401 to be a printed publication for 102b analysis. Subsequent to the VirnetX I decision, Apple filed a notice of supplemental authority in this case notifying the court of the relevance of the Rule 36 judgment in VirnetX I arguing that VirnetX was collaterally estopped from relitigating the printed publication issue.

On appeal, the Federal Circuit stated that 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. According to the court, 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 here, the court reasoned that the question of whether RFC 2401 was a printed publication was essential to the Rule 36 judgment in VirnetX I since each ground of unpatentability that VirnetX appealed in VirnetX I 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) Novartis is the owner of two patents US 5,665,772 and 6,440,990 that are directed to the compound everolimus and methods of treatment using the compound, respectively. Everolimus is an active ingredient in Zortress and Afinitor used to treat certain cancers. Both '990 and '772 patents claim the same priority date. The '990 patent was filed after June 8, 1995 and expired on Sept. 23, 2013, i.e., 20 years from earliest effective filing date. The '772 patent was filed before June 8, 1995 and expired on Sept. 9, 2014, 17 years from the issuance date but due to a fie-year patent term extension, the term of the '772 patent expires on Sept. 9, 2019.

Novartis sued ANDA filers Breckenridge, Par, and West-ward Pharma for infringing certain claims of the '772 patent. In the district court, the defendants conceded that their proposed products would infringe the '772 patent and the parties stipulated that the asserted claims would be invalid if the district court found the '990 patent to be a proper double patenting reference to the '772 patent. Relying on the Federal Circuit's decision in Gilead Sciences, Inc. v. Natco Pharma Ltd., 753 F.3d 1208 (Fed. Cir. 2014), which held that a later-filed but earlier-expiring patent can serve as a double patenting reference for an earlier-filed but later-expiring patent, the district court found the '990 patent to be a proper double patenting reference for the '772 patent. Novartis appealed the decision.

On appeal, the Federal Circuit reversed the lower court's decision as it erred in using the '990 patent as a reference for the '772 patent in its obviousness-type double patenting determination. Writing for the panel, Judge Chen reasoned that the change in patent term law under the Uruguay Round Agreements Act of 1994 changed the double patenting analysis and unlike the patents in Gilead which were both post-URAA, the '772 patent is pre-URAA and the '990 patent is post-URAA and the 17-year term granted to the '772 patent is not an unjustified extension of time.

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 distinctiveness 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.