Articles Posted in Patents

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The Biologics Price Competition and Innovation Act, concerning FDA approval of a drug that is biosimilar to an already-licensed biological “reference product,” 42 U.S.C. 262(k), treats submission of a biosimilar application as an “artificial” patent infringement. An applicant must provide its biosimilar application and manufacturing information to the reference product’s sponsor. The parties collaborate to identify patents for immediate litigation. Second phase litigation is triggered when the applicant gives the sponsor notice at least 180 days before commercially marketing the biosimilar. Amgen claims patents on methods of manufacturing and using filgrastim. Sandoz sought FDA approval to market a biosimilar, Zarxio, and notified Amgen that it had submitted an application, that it intended to market Zarxio immediately upon receiving FDA approval, and that it did not intend to provide application and manufacturing information. Amgen sued for patent infringement and asserted that Sandoz engaged in “unlawful” conduct under California law by failure to provide its application and manufacturing information and by notification of commercial marketing before obtaining FDA licensure. The FDA licensed Zarxio. Sandoz provided Amgen another notice of commercial marketing. The Supreme Court unanimously held that section 262(l)(2)(A) is not enforceable by injunction under federal law, but the Federal Circuit should determine whether a state-law injunction is available. Submitting an application constitutes artificial infringement; failing to disclose the application and manufacturing information does not. Section 262(l)(9)(C) provides a remedy for failure to turn over the application and manufacturing information, authorizing the sponsor, but not the applicant, to bring an immediate declaratory-judgment action, thus vesting in the sponsor the control that the applicant would otherwise have exercised over the scope and timing of the patent litigation. An applicant may provide notice under section 262(l)(8)(A) before obtaining FDA licensure. View "Sandoz Inc. v. Amgen Inc." on Justia Law

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Lexmark holds patents on the components of toner cartridges that it manufactures and sells. Lexmark allows consumers to buy a cartridge at full price, with no restrictions, or to buy a cartridge at a discount through Lexmark’s “Return Program,” by signing a contract agreeing to use the cartridge only once and to refrain from transferring the cartridge to anyone but Lexmark. Remanufacturers acquire empty Lexmark cartridges—including Return Program cartridges—from purchasers in the U.S. and overseas, refill them, and resell them in the U.S. Lexmark sued remanufacturers with respect to Return Program cartridges that Lexmark had sold within the U.S. and cartridges that Lexmark had sold abroad and that remanufacturers imported into the country. The Federal Circuit ruled for Lexmark with respect to both. The Supreme Court reversed. Lexmark exhausted its patent rights (35 U.S.C. 271(a)) in all of the cartridges. A patentee’s decision to sell a product exhausts all of its patent rights in that item, regardless of any restrictions the patentee purports to impose. If a patentee negotiates a contract restricting the purchaser’s right to use or resell an item, it may be able to enforce that restriction as a matter of contract law, but may not do so through a patent infringement lawsuit. The exhaustion doctrine is not a presumption about the authority that comes along with a sale; it is a limit on the scope of the patentee’s rights. The Patent Act just ensures that the patentee receives one reward—of whatever it considers satisfactory compensation—for every item that passes outside the scope of its patent monopoly. View "Impression Products, Inc. v. Lexmark International, Inc." on Justia Law

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The patent venue statute, 28 U.S.C. 1400(b), provides that “[a]ny civil action for patent infringement may be brought in the judicial district where the defendant resides, or where the defendant has committed acts of infringement and has a regular and established place of business.” In its 1957 “Fourco” decision, the Supreme Court concluded that for purposes of section 1400(b) a domestic corporation “resides” only in its state of incorporation, rejecting the argument that section 1400(b) incorporates the broader definition of corporate “residence” contained in the general venue statute, 28 U.S.C. 1391(c). Congress has not amended section 1400(b) since Fourco. Kraft filed a patent infringement suit in the District of Delaware against TC, a competitor, organized under Indiana law and headquartered in Indiana. TC ships the allegedly infringing products into Delaware. Reversing the district court and Federal Circuit, the Supreme Court held that, ss applied to domestic corporations, “reside[nce]” in section 1400(b) refers only to the state of incorporation. Section 1400(b) was enacted as a "stand alone" statute. Amendments to section 1391 did not modify the meaning of 1400(b) as interpreted by Fourco. View "TC Heartland LLC v. Kraft Foods Group Brands LLC" on Justia Law

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In 2003, SCA notified First Quality that its adult incontinence products infringed an SCA patent. First Quality responded that its patent antedated SCA’s patent and made it invalid. In 2004, SCA sought reexamination of its patent. In 2007, the Patent and Trademark Office confirmed the SCA patent’s validity. SCA sued for patent infringement in 2010. The district court granted First Quality summary judgment, citing equitable estoppel and laches. While SCA’s appeal was pending, the Supreme Court held that laches could not preclude a claim for damages incurred within the Copyright Act’s 3-year limitations period. The Federal Circuit nevertheless affirmed, based on Circuit precedent, which permitted laches to be asserted against a claim incurred within the Patent Act’s 6-year limitations period, 35 U.S.C. 286. The Supreme Court vacated. Laches cannot be invoked as a defense against a claim for damages brought within the limitations period. A statute of limitations reflects a congressional decision that timeliness is better judged by a hard and fast rule instead of a case-specific judicial determination. Applying laches within a statutory limitations period would give judges a “legislation-overriding” role that exceeds the Judiciary’s power and would clash with the gap-filling purpose for which the laches defense developed in the equity courts. View "SCA Hygiene Products Aktiebolag v. First Quality Baby Products, LLC" on Justia Law

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Promega sublicensed a patent, which claims a toolkit for genetic testing, to Life Technologies for the manufacture and sale of kits for use in licensed law enforcement fields worldwide. One of the kit’s five components, an enzyme, was manufactured by Life Technologies in the U.S. and shipped to the United Kingdom, where the other components were made, for combination there. When Life Technologies began selling kits outside the licensed fields of use, Promega sued, citing section 271(f)(1) of the Patent Act, which prohibits the supply from the U.S. of “all or a substantial portion of the components of a patented invention” for combination abroad. The district court held that the section did not encompass the supply of a single component of a multicomponent invention. The Federal Circuit reversed, reasoning that a single important component could constitute a “substantial portion” of the components of an invention. The Supreme Court reversed. The supply of a single component of a multicomponent invention for manufacture abroad does not give rise to liability under section 271(f)(1), which refers to a quantitative measurement. The Court rejected Promega’s proffered “case-specific approach,” which would require a factfinder to decipher whether the components at issue are a “substantial portion” under either a qualitative or a quantitative test. When a product is made abroad and all components but a single commodity article are supplied from abroad, the activity is outside the statute’s scope. View "Life Technologies Corp. v. Promega Corp." on Justia Law

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The Patent Act prohibits the manufacture or sale an “article of manufacture” to which a patented design or a colorable imitation thereof has been applied and makes an infringer liable “to the extent of his total profit,” 35 U.S.C. 289. A jury found that Samsung smartphones infringed Apple's design patents, which covered a rectangular front face with rounded edges and a grid of colorful icons on a black screen. Apple was awarded $399 million—Samsung’s entire profit from the sale of its infringing smartphones. The Federal Circuit affirmed the award. A unanimous Supreme Court reversed and remanded. In the case of a multicomponent product, the relevant “article of manufacture” for a section 289 damages award need not be the end product sold to the consumer but may be only a component of that product. The Court noted Patent Act section 171(a), which makes certain “design[s] for an article of manufacture” eligible for design patent protection and permits a design patent that extends to only a component of a multicomponent product. The term “article of manufacture” is broad enough to embrace both a product sold to a consumer and a component of that product, whether sold separately or not. The Court declined to resolve whether the relevant article of manufacture for each design patent at issue is the smartphone or a particular smartphone component. View "Samsung Electronics Co. v. Apple Inc." on Justia Law

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A third party may ask the Patent and Trademark Office (PTO) for inter partes review to reexamine claims in an issued patent and to cancel any claim found to be unpatentable in light of prior art; the decision “whether to institute an inter partes review . . . shall be final and non-appealable,” 35 U.S.C. 314(d). PTO is authorized to issue regulations governing inter partes review. One such regulation provides that, during inter partes review, a patent claim “shall be given its broadest reasonable construction in light of the specification of the patent in which it appears.” Garmin sought inter partes review of Cuozzo’s patent, asserting that claim 17 was obvious in light of prior patents. PTO reexamined claims 17, 10 and 14, finding those claims to be logically linked to the challenge; concluded that the claims were obvious in light of prior art; and canceled the claims. The Federal Circuit and Supreme Court affirmed. Section 314(d) bars a challenge to the decision to institute review. The “strong presumption” favoring judicial review is overcome by clear and convincing indications that Congress intended to bar review of the determination “to initiate an inter partes review under this section,” or where the challenge consists of questions closely tied to statutes related to that determination. Cuozzo’s claim does not implicate a constitutional question, nor present other questions beyond “this section.” The regulation requiring the broadest reasonable construction standard is a reasonable exercise of PTO's rulemaking authority, which is not limited to procedural regulations. The purpose of inter partes review is not only to resolve disputes among parties, but also to protect the public’s “paramount interest in seeing that patent monopolies . . . are kept within their legitimate scope.” Congress did not dictate what standard should apply in inter partes review. The broadest reasonable construction standard helps ensure precision in drafting claims and prevents a patent from tying up too much knowledge; PTO has used the standard for more than 100 years. View "Cuozzo Speed Techs., LLC v. Lee" on Justia Law

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In Patent Act infringement cases, courts may increase the damages up to three times the amount assessed, 35 U.S.C. 284. Under the Federal Circuit’s “Seagate” test for section 284 damages, a patent-holder had to demonstrate by clear and convincing evidence that the infringer acted despite an objectively high likelihood that its actions constituted infringement of a valid patent and that the risk of infringement “was either known or so obvious that it should have been known to the accused infringer.” The Federal Circuit reviewed objective recklessness de novo; subjective knowledge for substantial evidence; and the award of enhanced damages for abuse of discretion. The Supreme Court unanimously held that the Seagate test is inconsistent with section 284, which includes no precise rule for awarding damages. By requiring an objective recklessness finding, the test excluded from discretionary punishment many of the most culpable offenders, including the “wanton and malicious pirate” who intentionally infringes a patent, with no thoughts about its validity or defenses. A patent infringer’s subjective willfulness, whether intentional or knowing, may warrant enhanced damages, regardless of whether infringement was objectively reckless. Under Seagate, the ability of the infringer to muster a reasonable defense at trial was dispositive, even if he was not previously aware of the defense. Culpability is generally measured against the actor’s knowledge at the time of the challenged conduct. Seagate’s clear and convincing evidence requirement is also inconsistent with section 284, which imposes no specific evidentiary burden, much less such a high one. The Court also rejected the Federal Circuit’s tripartite appellate review framework. Section 284 commits the enhanced damages determination to the district court’s discretion; that decision should be reviewed for abuse of discretion. View "Halo Elecs., Inc. v. Pulse Elecs., Inc." on Justia Law

Posted in: Patents

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Marvel Entertainment’s corporate predecessor agreed to purchase Kimble’s patent for a Spider-Man toy in exchange for a lump sum plus a 3% royalty on future sales. The agreement set no end date for royalties. As the patent neared the end of its statutory 20-year term, Marvel discovered Brulotte v. Thys Co., in which the Supreme Court held that a patentee cannot continue to receive royalties for sales made after his patent expires and sought a declaratory judgment that it could stop paying Kimble royalties. The district court granted relief. The Ninth Circuit and Supreme Court affirmed, adhering to Brulotte. A patent typically expires 20 years from its application date. 35 U S.C. 154(a)(2). At that point, the unrestricted right to make or use the article passes to the public. The Brulotte rule may prevent some parties from entering into deals they desire, but parties can often find ways to achieve similar outcomes. Congress, moreover, has had multiple opportunities to reverse Brulotte and has even rejected bills that would have replaced Brulotte’s per se rule with the rule of reason standard. Congress, not the Court, gets to make patent policy. View "Kimble v. Marvel Entertainment, LLC" on Justia Law

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Commil, holder of a patent for a method of implementing short-range wireless networks, sued, claiming that Cisco Systems, a maker and seller of wireless networking equipment, had directly infringed Commil’s patent in its networking equipment and had induced others to infringe the patent by selling the infringing equipment for use. After two trials, Cisco was found liable for both direct and induced infringement. Cisco had raised the defense that it had a good-faith belief that Commil’s patent was invalid, but the court found Cisco’s supporting evidence inadmissible. The Federal Circuit held that the trial court erred in excluding evidence of a good-faith belief that Commil’s patent was invalid. The Supreme Court vacated and remanded. A defendant’s belief regarding patent validity is not a defense to an induced infringement claim. The Court noted the long held presumption that a patent is valid; 35 U.S.C. 282(a) establishes a high bar, the clear and convincing standard, to rebut the presumption. If a patent is actually shown to be invalid, there is no patent to be infringed. Orderly administration of the patent system requires courts to interpret and implement the statutory framework to determine the procedures and sequences that the parties must follow to prove the act of wrongful inducement and any related issues of patent validity. Accused inducers who believe a patent is invalid have other, proper ways to obtain a ruling to that effect, including seeking ex parte reexamination. View "Commil USA, LLC v. Cisco Systems, Inc." on Justia Law

Posted in: Patents