JOLT Digest

Federal Circuit Provides Guidance for Obviousness Determinations by the PTO and the Board of Patent Appeals and Interferences
By Abby Lauer – Edited by Dorothy Du

In re Kao, 2010-1307 (Fed. Cir. May 13, 2011)
Slip Opinion

The Federal Circuit vacated and remanded a decision of the Board of Patent Appeals and Interferences (“Board”), which had rejected patent application 11/680,432 (“the ‘432 application”) for obviousness. The Federal Circuit also affirmed findings of obviousness by the Board regarding patent applications 12/167,859 (“the ‘859 application”) and11/766,740 (the ‘740 application”). All of the patent applications at issue claimed controlled release drug formulations containing the opioid pain reliever oxymorphone.

In vacating and remanding the Board’s decision regarding the ‘432 application, the Federal Circuit held that the Board lacked “substantial evidence” in its determination that it would have been obvious for someone skilled in the art to combine the claims of a prior art reference with the controlled release oxymorphone formulation. In addition, the Board did not properly analyze the evidence of secondary considerations of nonobviousness that were presented by the patent holder. The Court agreed with the Board that both the ‘859 and the ‘740 applications were obvious in view of certain prior art references.

PatentlyO provides an overview of the case. Patent Docs provides detailed commentary and analysis.

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Written by Mehdi Eddebbarh & Jack Burns
Edited by Albert Wang
Editorial Policy

I. Introduction

Patent law strives to stimulate innovation by awarding inventors a temporary monopoly over patented inventions.  Antitrust law seeks to ensure efficient competition, in part by restricting monopolistic behavior.  Perhaps the most scrutinized area of intersection between patent law and antitrust law is the proper treatment of “reverse payments,” also referred to as “pay-for-delay” settlements.  Arkansas Carpenters Health and Welfare Fund v. Bayer AG, 625 F.3d 779, 780 (2d Cir. 2010) (Pooler, J., dissenting).  These are settlement agreements in patent infringement litigation in which a patent holder pays the alleged infringer to concede the validity of the patent and refrain from entering the market.  Henry N. Butler & Jeffrey Paul Jarosch, Policy Reversal on Reverse Payments: Why Courts Should Not Follow the New DOJ Position on Reverse-Payment Settlements of Pharmaceutical Patent Litigation, 96 Iowa L. Rev. 57, 60 (2010).

Senators Chuck Grassley and Herb Kohl recently introduced legislation in Congress that would create a presumption that pay-for-delay deals in the pharmaceutical industry are illegal.  Additionally, there is currently a circuit split over the proper standard for determining whether reverse payment settlements are improper.  The Supreme Court has not spoken on the issue, and recently denied a petition for certiorari by the Plaintiffs-Appellants in Arkansas Carpenters Health and Welfare Fund v. Bayer AG challenging the reverse payment settlement in that case.  Amicus curiae supporting the petitioners included 32 state Attorneys General and the American Antitrust Institute.

This commentary will explain why Congress and the judiciary should continue to allow pioneer patent holders and firms challenging those patents to use reverse payment settlements to settle their disputes.  To that end, this commentary will explain the importance of recognizing the right to exclude granted by patent laws and discuss the judicial policy in favor of settlements.  Some courts have referred to this as the “exclusionary zone of the patent,” and have essentially found that because patents provide a monopoly, any anticompetitive effects stemming from the exclusion of generic manufacturers through settlements should be recognized as a valid outgrowth of rights inherent in the patent grant.

While recognition of those underlying policies provides significant deference to patent holders, it also provides an incentive for patent holders to conduct sham litigation to eliminate threats to the validity of weak patents.  Thus, Congress should amend the current regime to clarify that where a reverse payment is challenged, some scrutiny of the patent’s validity is necessary.  Further, Congress should amend the 180-day exclusivity period, currently granted only to the first generic firm to challenge a pioneer patent, to give a subsequent challenger the same benefit where the first challenger settles.  (more…)

Federal Circuit Rules Federal Law Trumps State Law in Interpretation of Patent Ownership Rights
By Flora Amwayi – Edited by Jonathan Allred

Abraxis Bioscience, Inc. v. Navinta LLC, 2009-1539, 2011 WL 873298 (Fed. Cir. Mar. 14, 2011)
Slip Opinion

The Federal Circuit denied a petition for an en banc rehearing of a Federal Circuit panel order dismissing Abraxis’ patent infringement case against Navinta. The court dismissed the case on the grounds that Abraxis did not have standing to sue for infringement since it did not own the patents at the time the original complaint against Navinta was filed. The original panel order hinged on whether interpretation of patent ownership should be governed by New York state law (as outlined in choice of law provisions) or by federal rules of patent ownership and assignment (Federal Circuit law). See 35 U.S.C. § 261.

By denying the en banc rehearing, the court affirmed the panel’s holding that the resolution of ownership and assignment question is an issue of Federal Circuit law since it determines a plaintiff’s standing to sue for patent infringement. In so holding, the court stated that “state law cannot retroactively override federal law to revive failed agreements.”

The Patent Law Blog provides an overview of the case. The Patent Prosecutor criticizes the decision as a refusal to correct the Federal Circuit’s intrusion into state contract law. (more…)

Federal Circuit Throws out $1.67 Billion Jury Verdict for Lack of Written Description
Centocor Ortho Biotech, Inc. v. Abbott Lab., No. 2010-1144 (Fed. Cir. Feb. 23, 2011)

By Katie Booth – Edited by Chinh Vo
Slip Opinion

The Federal Circuit recently ruled that a district court erred when it declined to grant the motion of defendant Abbott Laboratories (“Abbott”) for JMOL that the plaintiff’s asserted patent claims were invalid. In so holding, the court set aside a jury verdict of $1.67 billion in damages to plaintiff Centocor Ortho Biotech (“Centocor”) in the infringement suit concerning antibodies used to treat arthritis.

The Federal Circuit found that Centocor’s written description in its patent application was not adequate and conveyed merely a wish or plan to invent an antibody rather than constructive possession of that antibody. The court also held that Centocor’s disclosure of the TNF-α protein did not provide an adequate written description for all binding antibodies, since the protein was already known and the antibody claimed could not be routinely produced at the time of filing.

Patent Docs and Patently-O provide thorough overviews of the case. (more…)

Federal Circuit rules that prosecution laches requires evidence of prejudice
By Jonathan Allred – Edited by Elizabeth Akerman

Cancer Research Technology Ltd. v. Barr Laboratories, Inc., No. 2010-1204 (Fed. Cir. Nov. 9, 2010)
Slip Opinion

The Federal Circuit overturned the District Court of Delaware, which had ruled that the plaintiff’s patent was unenforceable for prosecution laches, and, in the alternative, invalid for inequitable conduct.

Prosecution laches is an equitable defense to infringement when the plaintiff has delayed the prosecution of a patent application unreasonably. In this case, the Federal Circuit held that prosecution laches requires a finding of prejudice – evidence that the accused infringer “invested in, worked on, or used the claimed technology during the period of delay” – in addition to an unreasonable delay in prosecution.

As the opinion notes, the usefulness of the doctrine will be limited now that patent terms are measured from the effective filing date and not the date of refilling.

The Federal Circuit also overturned the Delaware court’s ruling on inequitable conduct.

Patently-O offers a synopsis and disagrees with the dissent. Inventive Step summarizes the opinion. The Patent Prospector provides the text of the opinion with commentary sympathetic with the dissent interjected throughout. (more…)