obvIPat - Obviously Patentable

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CAFC Weekly: September 10, 2010

by Orlando Lopez

In Green Edge Enterprises, LLC v. Rubber Mulch etc., LLC , the patent issues are related to a patent owned by Green Edge, for synthetic mulch that looks like natural mulch.  The District Court granted summary judgment of invalidity, based on concealment of the best mode.  The CAFC reversed the summary judgment of invalidity because it found that the description contains the best mode.  This decision is of interest since the proposed patent reform retains the best mode requirement, but also emasculates the requirement, as a patent could not be invalidated due to the failure to present the best mode.  The CFAC also reversed the District Court’s dismissal of Rubber Mulch’s counterclaim of trademark invalidity.

In Goeddel v. Sugano, the CAFC considered an appeal of two related interference proceedings.  When two separate patent applications claim substantially the same invention, the USPTO awards patent rights to the first inventor to conceive the invention, provided that the inventor has reduced the invention to practice.  Constructive reduction to practice, reducing to practice by filing a patent application, is acceptable.  The constructive reduction to practice can occur when the application is the foreign patent application used for priority.  The USPTO Board of Patent Appeals and Interferences (BPAI) found that the Japanese application that Sugano used for priority provided constructive reduction to practice.  The CAFC reversed, holding that the Japanese application did not satisfy the written description requirement and that the application showed “that the inventor actually invented the invention claimed.” Additionally, the Japanese application did not disclose the DNA sequence required.  Experts on both sides agreed that one skilled in the art would have known how to arrive at the DNA sequence; however, the written description requirement is unique to US patent law.  In the rest of the world, only enablement, where one skilled in the art and perhaps with some experimentation can reproduce the invention, is required.

In Baseload Energy, Inc. v. Roberts, a prior settlement agreement granted Baseload the option to acquire a nonexclusive license to the patent at issue. The option lapsed and Baseload filed a declaratory judgment action in District Court seeking to have the patent declared invalid and unenforceable. The District Court granted summary judgment to Roberts based on the declaratory judgment action being barred by the prior settlement agreement. The CAFC reversed, since there was no “clear and unambiguous” language in the prior settlement agreement barring the invalidity and unenforceability claim, and the dispute that led to the prior settlement agreement did not involve infringement, validity or enforceability.

In Tri-Star Electronics Int’l. v. Preci-Dip Durtal SA , Tri-Star sued Preci-Dip for patent infringement.  Preci-Dip challenged Tri-Star’s standing to sue based on issues with the assignment of the patent to Tri-Star.  TriStar started as Tri-Star (Ohio), merged and became Tri-Star (California) and merged again and became Tri-Star (Delaware).  The inventor had assigned to Tri-Star (Ohio) after the first merger.  The District Court held that the assignment was still valid and denied the motion to dismiss for lack of standing.  Preci-Dip appealed and the CAFC accepted the appeal.  The CAFC affirmed the decision of the District Court, because in a contract the intent of the parties govern that contract (an assignment is a contract) and under Ohio law, a corporation continues to exist in order to complete the transfer of property to the new corporation.

In Daiichi Sankyo Co., Ltd. v. Matrix Laboratories, Ltd., the CAFC considered the determination of obviousness in a chemical composition claim.  After one of the defendants filed multiple Abbreviated New Drug Applications (ANDAs) with the FDA, seeking to bring to market a generic version of the drug covered by the Daiichi patent at issue (the ‘599 patent), Daiichi filed for infringement of Claim 13 of the patent.  The parties stipulated that infringement occurred, but the defendants alleged that Claim 13 was invalid due to obviousness.  The District Court found that the claim was not obvious in view of the references asserted, as well as in view of secondary considerations, such as the unexpected results and commercial success.  The CAFC affirmed the decision of non-obviousness.  The opinion provides a good discussion of the argument for obviousness in a chemical composition claim and builds on the CAFC’s prior opinion in Takeda (Takeda Pharmaceuticals also performed some of the early work on the class of compounds at issue, ARB blockers for treatment of high blood pressure).

In Spine Solutions, Inc. v. Medtronic Sofamor Danek USA, Inc, Spine Solutions (SSI) sued Medtronic for infringement of a patent related to intervertebral implants, alleging that three of Medtronic’s implants each infringed a number of the claims of the patent.  The District Court granted summary judgment of infringement, both literally and under the doctrine of equivalents, and denied Medtronic’s motion for summary judgment of invalidity in view of the lack of written description.  The jury trial that followed concentrated on damages and patent invalidity due to obviousness. SSI brought in SSI’s sister company, Synthes Spine Co., and SSI’s parent company, Synthes, Inc., as co-plaintiffs.   SSI does not make or sell the implants covered by the patent.  Synthes Spine Co., manufactures and sells the implants.  The jury awarded SSI and the co-plaintiffs damages due to reasonable royalty and lost profits, found Medtronic guilty of willful infringement and found the patent valid.  Medtronic then appealed to the CAFC, which upheld the judgment of validity, both for non-obviousness and for sufficient written description; however, the CAFC found that one of the Medtronic implants did not infringe, either directly or under the doctrine of equivalents.  Due to the lack of an agreement that declared the sister company an exclusive licensee, the CAFC ruled that neither the sister company nor the parent company had standing to sue and reversed the award of lost profits.  Additionally, the CAFC reversed the finding of willful infringement.  The CAFC also lifted a permanent injunction that had been levied by the District Court and remanded the case back to the District Court for determination of any additional reasonable royalties that SSI might be entitled to.

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