Attorney General’s Office May Weigh In on Constitutionality of IPRs involving Pre-AIA Patents

By Tom Engellenner
The 2011 America Invents Act (AIA) provided a variety of new ways to administratively challenge patents, including the now widely used inter partes review (“IPR”) procedure.  In two recent appeals of IPR decisions, Genentech has challenged the constitutionality of IPR proceedings when applied to patents that were already issued as of the date that the AIA was enacted.

Genentech has filed two appeals to the Court of Appeals for the Federal Circuit (“Federal Circuit”) involving decisions by the U. S. Patent Office’s Patent Trial and Appeal Board (“PTAB”) invalidating certain patent rights issued to Genentech on immunotherapy biologics. (Federal Circuit Docket Nos. 18-1933 and 18-1959.)  These patents have been asserted against a number of competitors seeking to market biosimilar products to Genentech’s Avastin® and Herceptin® antibody therapeutics.

The appeals stem from two IPR Petitions filed by Hospira, IPR2016-01771 and IPR2016-01837, that challenged claims of U.S. Patent Nos. 7,622,115 and 7,807,799, respectively. The ’115 Patent issued in November 2009 and the ’799 Patent issued in October, 2010 – both issuance dates being well before the 2011 enactment of the AIA.  The PTAB initiated trials on both patents and ultimately found all of the challenged claims to be invalid over the prior art presented by Hospira.

Genentech’s briefs assert “the retroactive application of inter partes review to a patent issued before that procedure existed is unconstitutional, a taking without just compensation and a denial of due process,” in violation of the Constitution’s Fifth Amendment.

The Federal Circuit has now certified Genentech’s constitutional challenges to the U.S. Attorney General, who has been directed to inform the Court whether the United States intends to intervene in the appeals within 30 days.

Genentech’s position may seem like a “Hail Mary pass” effort to save its patents, especially in light of the U.S. Supreme Court’s decision earlier this year in Oil States Energy Services, LLC v. Greene’s Energy Group, LLC, No. 16-712, 138 S. Ct. 1365 (2018) (“Oil States”), where the Court rejected the patent owner’s argument that revoking patent claims as a result of an IPR proceeding is unconstitutional under Article III and the Seventh Amendment.

In the Oil States case, the Court held that the decision to grant a patent is a matter involving public rights and, hence, a challenge to a patent’s validity need not be heard exclusively in an Article III federal court and does not require a jury trial.  (For our detailed analysis of the Oil States decision, click here.)

However, Genentech’s arguments are based on the Fifth Amendment’s prohibition on taking private property for public use without just compensation by a process that did not exist when the property rights were granted. The author of the Oil States decision, Justice Clarence Thomas, emphasized the narrowness of the holding in the Oil States case and made it clear that the case addresses “only the precise constitutional challenges . . . raised here.” Oil States at 1369. Continue reading

Posted in Appeals, Attorney General, Constitutionality, Court of Appeals Fed Circuit, Federal Circuit, Fifth Amendment, Final PTAB Decision, Supreme Court, Takings Clause, USPTO | Tagged , , , , , , , , , , , , , | Leave a comment

CAFC Reverses PTAB on §315(b) Petition Time Bar Interpretation

By Reza Mollaaghababa
Section 315(b) of the America Invents Act (AIA) provides that an inter partes review (IPR) proceeding “may not be instituted if the petition requesting the proceeding is filed more than 1 year after the date on which the petitioner, real party in interest, or privy of the petitioner is served with a complaint alleging infringement of the patent.”

Recently, in Click-to-Call Technologies, LP v. Ingenio, Inc., Yellowpages.com, LLC, the CAFC reversed the Board’s interpretation of §315(b) in an IPR filed against U.S. Patent No. 5,818,836 that the voluntary dismissal of a civil action related to this patent, which has been served on the defendants more than one year prior to the filing of the IPR, negated the one-year bar instituted by §315(b) because such a voluntary dismissal nullified the effect of the service.  In reaching this conclusion, the Board emphasized that “the Federal Circuit consistently has interpreted the effect of such dismissals as leaving the parties as though the action had never been brought.”

The CAFC did not agree and held that “the statute does not contain any exceptions or exemptions for complaints served in civil actions that are subsequently dismissed, with or without prejudice.  Nor does it contain any indication that the application of § 315(b) is subject to any subsequent act or ruling.  Instead, the provision unambiguously precludes the Director from instituting an IPR if the petition seeking institution is filed more than one year after the petitioner, real party in interest, or privy of the petitioner ‘is served with a complaint’ alleging patent infringement.  Simply put, § 315(b)’s time bar is implicated once a party receives notice through official delivery of a complaint in a civil action, irrespective of subsequent events.”

The CAFC noted that this reading of §315(b) is confirmed by its en banc decision in Wi-Fi One, in which the CAFC had held that the provision sets forth a “condition precedent to the Director’s authority to act,” based on “timely filing of a petition.”

In the present case, the Petitioners also argued that a reexamination of the patent at issue, which was conducted after the date of the service and before the filing of the IPR, had resulted in the issuance of significantly different claims relative to the original claims of the ‘836 patent, and hence had resulted in a different patent for the purposes of §315(b).  The CAFC was not, however, persuaded by this argument. The CAFC emphasized that “Unlike reissue, reexamination does not result in the surrender of the original patent and the issuance of a new patent.”

Finally, Petitioners argued that certain of the petitioners were not subject to the time bar of §315(b) because they were not in privity with the patent owner at the time of service of the civil action.  The CAFC rejected this argument and emphasized that §315(b) applies “petition-by-petition, not petitioner-by-petitioner, with the collection of petitioners on a single petition treated as a unit indistinguishable from each member of that collection.”

Posted in Uncategorized

CAFC Affirms PTAB’s Decision That Printed Matter Doctrine Can Be Used In Claim Construction

By Reza Mollaaghababa
In an inter partes review proceeding, a challenger cannot raise patent-eligibility as a ground of invalidity.  Rather, the invalidity grounds are limited to lack of novelty and obviousness.  Notwithstanding, in construing claim terms, the PTAB can decide not to give patentable weight to certain claim limitations that are not patent-eligible. In Praxair Distribution., Inc. v. Mallinckrodt Hospital Products IP Ltd., No. 2016-2616, 2016-2656 (Fed. Cir. May 16, 2018) the PTAB had employed the so-called “printed matter doctrine” not to give patentable weight to certain limitations as merely “providing information”  and the CAFC affirmed the PTAB’s claim construction.

Mallinckrodt is the owner of U.S. Patent No. 8,846,112, which is directed to methods of distributing nitric oxide gas cylinders for pharmaceutical applications.

Claim 1 recites a method of providing pharmaceutically acceptable nitric oxide gas, which includes obtaining a cylinder containing compressed nitric oxide gas, supplying the cylinder to a medical provider who is responsible for treating neonates who have hypoxic respiratory failure, including some who do not have left ventricular dysfunction. Claim 1 further includes the step of providing to the medical provider “(i) information that a recommended dose of inhaled nitric oxide gas for treatment of neonates with hypoxic respiratory failure is 20 ppm nitric oxide and (ii) information that, in patients with preexisting left ventricular dysfunction, inhaled nitric oxide may increase pulmonary capillary wedge pressure (PCWP), leading to pulmonary edema, the information of (ii) being sufficient to cause a medical provider considering inhaled nitric oxide treatment for a plurality of neonatal patients who (a) are suffering from a condition for which inhaled nitric oxide is indicated, and (b) have pre-existing left ventricular dysfunction, to elect to avoid treating one or more of the plurality of patients with inhaled nitric oxide in order to avoid putting the one or more patients at risk of pulmonary edema.”

Independent claim 7 includes a “recommendation that, if pulmonary edema occurs in a patient who has pre-existing [LVD] and is treated with inhaled nitric oxide, the treatment with inhaled nitric oxide should be discontinued” (the “recommendation” limitation). Claim 9 depends on claim 7 and further comprises the following steps: performing at least one diagnostic process to identify a neonatal patient who has hypoxic respiratory failure and is a candidate for inhaled nitric oxide treatment; determining prior to treatment with inhaled nitric oxide that the neonatal patient has pre-existing left ventricular dysfunction; treating the neonatal patient with 20 ppm inhaled nitric oxide, whereupon the neonatal patient experiences pulmonary edema; and in accordance with the recommendation of [claim 7], discontinuing the treatment with inhaled nitric oxide due to the neonatal patient’s pulmonary edema. Id.

The Board applied the printed matter doctrine to interpret the providing information, evaluating, and recommendation claim limitations “to be either printed matter or purely mental steps not entitled to patentable weight, as those limitations lacked a functional relationship to the other claim limitations except in claim 9.” In particular, the PTAB was not persuaded by Mallinckrodt’s argument that the recitation of “a pharmaceutically acceptable nitric oxide gas” in the preamble of the claims would require considering information provided in the label of the supplied product.  Rather, the PTAB construed this limitation as simply “nitric oxide gas that is suitable for pharmaceutical use.” Continue reading

Posted in America Invents Act, Anticipation/Obvious, Appeals, Claim Construction, Court of Appeals Fed Circuit, Federal Circuit, Mental Steps Doctrine, Patent Eligible Subject Matter, Printed Matter Doctrine, USPTO | Tagged , , , , , , , , ,

Once The Federal Circuit Affirms A PTAB Finding Of Invalidity, Collateral Estoppel Prevents Patent Owner From Asserting The Claims In Any Further Proceeding

By Reza Mollaaghababa
On May 23, 2018, in XY, LLC v. Trans Ova Genetics, L.C., CAFC held that its affirmance of PTAB’s invalidity decision regarding certain claims of a patent owned by XY in a separate appeal involving a different defendant must be given “immediate issue preclusive effect” with respect to the same claims in the present case even though XY and Trans Ova had not raised the collateral estoppel issue.

XY owns patents that relate to methods of sorting mammalian sperms into X- and Y-chromosome-bearing populations based on their DNA content. In 2004, Trans Ova, which provides services related to embryo transfer and in-vitro fertilization for cattle, entered into a five-year licensing agreement with XY for the use of the technology embodied in the XY’s patents. The licensing agreement was subject to automatic renewal in 2009. In 2007, XY sent a letter to Trans Ova to terminate the licensing agreement alleging certain breaches by Trans Ova.  Although the parties negotiated over the next several years, they failed to resolve their dispute.  In 2012, XY sued Trans Ova for patent infringement of a number of its patents, one of which (U.S. Patent No. 7,820,425) relates to a method of freezing separated sperm cells.

The jury found that none of the asserted patent claims was invalid and that Trans Ova willfully infringed those claims. CAFC held that as a threshold matter, it did not need to address Trans Ova’s invalidity arguments as to the ‘425 patent in view of its affirmance in a separate appeal invalidating those same claims, “which collaterally estops XY from asserting the patent in any further proceedings.”  CAFC indicated that “in this separate case appealed to us and argued on the same day as the instant appeal, the Patent Trial and Appeal Board of the U.S. Patent and Trademark Office (Board) held that these claims are unpatentable in a final written decision from an inter partes review proceeding … [and] [i]n a separate order issued today, we affirm the Board’s decision.”

In support of its decision, the CAFC reasoned that a patentee, having been afforded the opportunity to exhaust his remedy of appeal from a holding of invalidity has had his “day in court,” and a defendant should not have to continue defending a suit for infringement of an adjudged invalid patent.

Judge Newman dissented and indicated that this holding of “estoppel is based on a PTAB ruling in a separate case involving non-mutual parties, and contravenes not only the America Invents Act’s estoppel provision, but also the general law of collateral estoppel.” Judge Newman emphasized that “collateral estoppel was not pleaded and was not argued, yet is imposed on appeal without opportunity for response – contrary to precedent requiring that the precluded party ‘had a full and fair opportunity to present its arguments’ concerning estoppel.”

The majority responded that “[a]s to the Dissent’s concern of applying estoppel without briefing, both precedent and the parties’ positions allow application of collateral estoppel sua sponte here.  A remand for briefing is not a requirement to applying estoppel when there is no indication from the Patent Owner that ‘it did not have a full and fair opportunity to litigate the validity’ of its patent in the parallel case.”

Posted in Anticipation/Obvious, Court of Appeals Fed Circuit, Covered Business Methods, Federal Circuit, Final PTAB Decision, Inter Partes Review, Post Grant Review, USPTO | Tagged , , , ,

USPTO Proposes Change In Claim Construction Standard For Post-Grant Proceedings

By Reza Mollaaghababa
On May 9, 2018, U.S. Patent and Trademark Office (PTO) issued a notice of proposed rule for changing the standard for construing claims in unexpired patents in inter partes review (IPR), post-grant review (PGR), and transitional covered business method (CBM) proceedings from current broadest reasonable interpretation (BRI) to the same claim construction standard that is utilized in the federal courts, i.e., the so-called Phillips standard.

Under the Phillips standard, the words of a claim are generally given their ordinary and customary meaning. In contrast, in post-grant review proceedings, the more expansive BRI standard is employed, which expands the scope of prior art that can be applied to invalidate the challenged claims.  The BRI standard  has been in fact outcome determinative in many of the proceedings.

The notice of proposed rule indicates that the U.S. Supreme Court has endorsed the PTO’s ability to choose an approach to claim construction for AIA proceedings. It also indicates that the proposed change in the claim construction standard could lead to greater uniformity and predictability between the claim constructions adopted by the PTAB and the federal courts.  This change will also harmonize the standard used for patentability and infringement, which could otherwise lead to unfair results.  For example, under BRI, it is possible for a patent claim to be invalidated based on a prior art reference although the construction of the same claim in an issued patent under the Phillips standard would not lead to a conclusion of infringement.  Moreover, there have been cases of a patent being found valid and infringed in a district court action but subsequently being found invalid by the PTO under the BRI standard.

The proposed change applies not only to the claims of an unexpired patent but also to claims presented in a motion to amend. “Under the proposed approach, the PTAB would construe patent claims based on the record of the IPR, PGR, or CBM proceeding taking into account the claim language itself, specification, and prosecution history pertaining to the patent.”  Further, consistent with the Phillips standard, extrinsic evidence, such as expert testimony and dictionaries, may be useful in determining what a person of ordinary skill would understand the claim terms to mean; however, extrinsic evidence is viewed as less reliable than intrinsic evidence.

Further, consistent with the Phillips standard, “the doctrine of construing claims to preserve their validity would apply to AIA trials.”  The notice, however, cautions that the doctrine of construing claims to preserve their validity has been limited to cases in which “the court concludes, after applying all the available tools of claim construction, that the claim in ambiguous.”  Further, the Federal Circuit “repeatedly and consistently has recognized that the courts may not redraft claims, whether to make them operable or to sustain their validity.”

The PTO intends that any proposed rule changes adopted in a final rule would be applied to all pending IPR, PGR, and CBM proceedings before the PTAB. The Office is presently soliciting comments on the proposed change, where written comments must be received by July 9, 2018 to ensure consideration.

Posted in BRI Standard, Broadest Reasonable Interpretation, Claim Construction, Covered Business Methods, Inter Partes Review, Post Grant Review, PTAB Procedure, USPTO | Tagged , , , , , , , , , , , ,