JOLT Digest

Class action claim against Zicam manufacturer Matrixx reinstated by the Ninth Circuit

By Abby Lauer – Edited by Alissa Del Riego
Siracusano v. Matrixx Initiatives, Inc., No. 06-15677 (9th Cir. Oct. 28, 2009)
Opinion

The Ninth Circuit has unanimously reversed the U.S. District Court for the District of Arizona’s holding, which had dismissed a class action claim against Zicam manufacturer Matrixx for the complaint’s failure to adequately allege a violation of the Private Securities Litigation Reform Act of 1995 (“PSLRA”).

In an opinion written by Tashima, J., the Ninth Circuit held that the District Court improperly relied on a statistical significance standard to determine that the plaintiffs’ complaint did not allege “a material misrepresentation or omission of fact.” Siracusano v. Matrixx Initiative, Inc., No. 06-15677 at 18 (9th Cir. Oct. 28, 2009). Instead of determining materiality as a matter of law, the district court should have allowed the jury to conduct a “fact-specific inquiry.” Siracusano v. Matrixx Initiative, Inc., No. 06-15677 at 20 (9th Cir. Oct. 28, 2009). In addition, the Ninth Circuit held that the lower court erred in dismissing plaintiffs’ complaint for failure to allege scienter on the part of Matrixx executives. The court reasoned that the inference that Matrixx executives knew about the possible link between Zicam and anosmia (loss of smell) before issuing allegedly misleading statements is at least as likely as any plausible opposing inference.

Phoenix’s East Valley Tribune provides an overview of the case. For further discussion of the opinion and pleading standard precedents, see The D & O Diary. For more information about homeopathic remedies, including Zicam, see this recent Washington Post article. (more…)

Bayer Schering Pharma v. Barr Labs

By Aaron Dulles – Edited by Evelyn Breithaupt
Bayer Schering Pharma AG and Bayer Healthcare Pharm., Inc. v. Barr Labs., Inc., No. 2008-1282 (Fed. Cir. Aug. 5, 2009)
Slip Opinion

On August 5, 2009, a Federal Circuit panel affirmed the decision of the District of New Jersey, which had found Bayer’s U.S. Patent No. 6,787,531 (”‘531 Patent”) invalid because of obviousness. The ‘531 Patent concerns a formulation of the well-known contraceptive drug drospirenone. The patent previously protected Bayer’s formulation of a daily oral contraceptive product, marketed as the drug Yasmin. When Barr Labs sought approval from the FDA to market a generic version of Yasmin, Bayer filed a patent infringement suit. The district court found that under KSR International Co. v. Teleflex Inc., 550 U.S. 398 (2007), the formulation of drospirenone in the Yasmin product was obvious. The sole issue of appeal was obviousness, and by a 2-1 vote the Federal Circuit affirmed the district court’s decision.

Passino PLLC suggests that the majority’s application of the In re O’Farrell, 853 F.2d 894 (Fed. Cir. 1988) standards was too rigid, and thus appeared to go against warnings in KSR concerning rigid application of tests. Patent Docs agreed, asserting that the judges both at the trial and appellate levels disregarded important evidence and emphasizing that the “common sense” of obviousness is that of the practitioner, not the judge. AboutLawSuits.com noted the ruling, but focused on known potential negative side effects of the drospirenone-based contraceptives such as Yasmin. (more…)

By Sharona Hakimi

Senators Urge FCC to Carefully Examine Exclusive Cell Phone Deals

On June 16, Ars Technica reported that senators wrote a letter to the FCC voicing concern over exclusivity agreements between service providers and phone manufacturers. The four senators who signed the letter – Senators John Kerry (D-MA), Roger Wicker (R-MS), Byron Dorgan (D-ND), and Amy Klobuchar (D-MN) – expressed particular concern as to whether the deals restrict consumer choice regarding handsets and geographic regions. They also noted that the agreements may disadvantage competing smaller carriers and discourage new innovation. According to the letter, the “Senate Committee on Commerce, Science and Transportation will convene a hearing this week to examine issues confronting wireless consumers” and decide if legislative action is necessary. Although the iPhone’s exclusivity agreements have garnered the most attention, the letter considers all cell phone carriers.

Microsoft Files Suit After Finding Evidence of Click Fraud

On June 16, the New York Times reported that Microsoft sued three individuals and several corporations for $750,000 in damages for click fraud – manipulating clicks on online advertisements. After noticing suspicious spikes in traffic from auto insurance and World of Warcraft web advertisements, Microsoft began an investigation that eventually uncovered an alleged click fraud manipulation scheme. Microsoft’s complaint alleges that the defendant directed traffic to his competitors’ Web sites so they would pay for the clicks and exhaust their advertising budgets. Jeremy Fain, a vice president of Interactive Advertising Bureau, said that although there is much precedent for mail and wire fraud, there is little regarding internet fraud. He went on to say that this case may “create more of a legal precedent, and more of a legal library of cases to draw from in the future.”

EU Seizure of Indian Drugs Hinders Medicine Dispersal

According to a recent report by Intellectual Property Watch, an increase in European seizures of Indian medicines believed to infringe intellectual property rights has triggered concerns that there is a strategic pattern in enforcement. On June 16, Spicy IP reported that India has recently protested to the TRIPS Council, expressing strong disapproval of EU’s controversial regulations and demanding more transparency of the various seizures. In May, German officials held about 3 million pounds of Amoxicillin on suspicion of a trademark infringement, delaying shipment to the Pacific by 4 weeks. “These random seizures seriously impact our ability to service the healthcare needs of people living in developing countries in a timely manner,” according to a drug supplier spokesperson. The EU claims that it is merely trying to reduce the “fast growing and dangerous” problem of counterfeits in developing countries.

Federal Circuit Resolves Split Regarding Product-by-Process Claims

By Sharona Hakimi – Edited by Stephanie Weiner
Abbott Laboratories v. Sandoz, Inc., May 18, 2009, No. 07-1400, -1406
Opinion (hosted by Patently-O)

On May 18th the Court of Appeals for the Federal Circuit, sitting en banc, reconciled a long-standing conflict between two lines of cases determining the scope of product-by-process claims. The Federal Circuit affirmed the Atlantic Thermoplastics Co. v. Faytex Corp. rule that infringement of a product-by-process claim requires actually using those claimed process steps to make the product, and overruled the more inclusive Scripps Clinic & Research Foundation v. Genentech, Inc. rule, which defined product-by-process claims as limited solely by the end product.

Peter Zura of the 271 Patent Blog summarizes the opinion and provides excerpts that outline past relevant Supreme Court decisions. Kevin E. Noonan of Patent Docs provides an overview of the case and particularly emphasizes Judge Newman’s dissenting opinion. The Patent Prospector provides an in-depth summary and long excerpts from the decision. (more…)

Federal Circuit Holds That Later-Developed Alternative Manufacturing Processes May Be “Patentably Distinct” from Their Related Products

By Tyler Lacey – Edited by Evan Kubota
Takeda Pharmaceutical Co. v. Doll, April 10, 2009, No. 2008-1131
Opinion

On April 10th, the United States Court of Appeals for the Federal Circuit vacated and remanded the decision of the United States District Court for the District of Columbia, holding that manufacturing processes developed after a product is patented may be “patentably distinct” from their related products.

In a non-unanimous opinion written by Circuit Judge Rader, the Federal Circuit held that “the relevant time frame for determining whether a product and process are ‘patentably distinct’ should be at the filing date of the [process] application.”  If there exists only one process to manufacture a product, the process cannot be patented separately from the product because the two are substantially co-extensive.  However, if multiple, materially different processes for making a product existed at the time of the product’s invention, then those processes are distinct from the product and can therefore be patented separately. See Manual of Patent Examining Procedure §806.05.  This decision now allows for processes discovered after the product’s invention to be considered “patentably distinct,” defeating any patent invalidity claim based on the double patent doctrine.  The double patent doctrine prevents a patentee from obtaining extra exclusivity time for a single invention by obtaining two patents for it. 

Peter Zura of the 271 Patent Blog summarizes the opinion. The Patent Prospector criticizes the decision arguing that the double patent issue was “resolved badly” and asserting that the court did not “[think] through the implications of its ruling.”  Patently-O provides a summary of the original district court opinion. (more…)