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CAFC Weekly: May 14, 2010

by Orlando Lopez

This week, in what looks like a sequel to the week ending May 7, the CAFC considered another inequitable conduct case and two 35 USC 156 patent term extension cases. A licensing case and a personal jurisdiction case round out the week.

In Tal-Tech Limited v. Esquel Enterprises Limited, another inequitable conduct case, Tal-Tech returns to the CAFC after being there once before for the same inequitable conduct charge and having the CAFC remand back to District Court. Tal-Tech is now appealing an award of attorney’s fees to Esquel based on a finding of inequitable conduct and a finding of misconduct. The supposedly withheld material facts, were first disclosed by the inventor at a deposition during litigation. The patent in suit refers to a thermal adhesive to reduce pucker in garments, such as dress shirts. The inventor answered a question as to what sparked his invention by drawing a raincoat seal. It is this raincoat seal drawing that brought on the inequitable conduct charge. The CAFC, the second time around, upheld the District Court’s inequitable conduct holding. Some of the issues considered in this case are up for en banc review in Therasesnse (see CAFC Weekly-April 30, 2010). The dissent by Judge Gajarsa underscores the need for the en banc review. As Wong the inventor found out, if they bring you back to Court a second time, they can take the shirt patent off your back.

In PhotoCure ASA v. Kappos, the issue being considered is whether the statute (35 USC 156) for patent term extension to recover time lost during regulatory review, was correctly applied by the USPTO. The CAFC upheld the District Court, which had determined that the USPTO did not correctly apply the statute, and grants the patent term extension to PhotoCure. The drug at issue had an active ingredient that, despite being a new chemical compound, was an improvement over a previously known, FDA licensed compound.

In Ortho McNeil Pharmaceutical Inc. v. Lupin Pharmaceuticals Inc., the CAFC upheld the validity of the granting of a patent term extension under 35 USC 156. The USPTO, after consulting with the FDA, had granted the extension.

In Alfred E. Mann Foundation (AMF) for Scientific Research v. Cochlear Corp., the issue being considered is whether after granting an exclusive license, AMF had given up their right to sue for infringement. In the exclusive license, AMF had given the licensee the first right to sue for enforcement of the patents, but had retained the secondary right to sue for enforcement. After a detailed discussion of rights to be examined in order to determine whether an exclusive license renders the licensee the owner of the patent, the CAFC held that AMF had the right to sue for infringement and remands back to the District Court in order to determine whether the licensor has to be part of (“joined in”) the suit. The opinion is a good study of the transfer of ownership in an exclusive license, and what different clauses in the license imply in regards to the transfer of ownership.

In Patent Rights Protection Group LLC v. Video Game Technologies (VGT) Inc., the CAFC considered whether VGT had sufficient interaction with Nevada to be hauled into court there; the personal jurisdiction question. Following a classic analysis, reminiscent of the first-year law school course in Civil Procedure, the CAFC held that VGT is subject to personal jurisdiction in Nevada.

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