Gibbons Law Alert

Gibbons Law Alert

Category: Patent

Using IPR To Trigger Prosecution Disclaimer

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Posted in Patent

On August 24, 2018

A recent district court decision found prosecution disclaimer stemming from statements by a patentee distinguishing its inventions from the prior art when opposing inter partes review. See Game & Tech. Co. v. Blizzard Entm’t, Inc., 2018 U.S. Dist. LEXIS 58424 (C.D. Cal. Apr. 4, 2018). As alleged infringers are increasingly filing petitions for inter partes review of patents asserted against them, the case illustrates how to use statements made by a patentee to oppose inter partes review against them in a related district court patent litigation. In Blizzard Entm’t, Game and Technology Co. Ltd. (GTCO) sued the defendant game developer, alleging that the defendant’s manufacture, sale, and distribution of online games infringed three patents: U.S. Patent No. 8,035,649, 8,253,743, and 7,682,243. After the Court transferred the case from the Eastern District of Texas to the Central District of California, the defendant petitioned for IPR of all patents-in-suit and moved to stay the action pending inter partes review. The Court stayed the case pending inter partes review. In March 2018, the Patent Trial and Appeal Board (PTAB) issued a decision concerning the ‘743 patent, finding all claims unpatentable under 35 U.S.C. § 103. As to the ‘649 and ‘243 patents however, the PTAB denied institution of an IPR in February and March 2017, respectively. Nevertheless, the...

What is “A Regular and Established Place of Business”?: A Case Compendium

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Posted in Patent

On August 22, 2018

Since the TC Heartland decision in which the Supreme Court ruled that the “residence” prong in the patent venue statute, 28 U.S.C. § 1400(b), refers only to the state of incorporation and not the definition conferred in the general venue statute, § 1391, parties and courts have focused attention on interpreting the alternative basis for venue under the statute: “where the defendant has committed acts of infringement and has a regular and established place of business.” TC Heartland v. Kraft Foods Group Brands, 137 S. Ct. 1514, 1516 (2017). Of particular interest is how courts have ruled on what constitutes “a regular and established place of business.” In September 2017, the Federal Circuit clarified that a “regular and established place of business” must meet three general requirements: “(1) there must be a physical place in the district; (2) it must be a regular and established place of business; and (3) it must be the place of the defendant.” In re Cray, 871 F.3d 1355, 1360 (Fed. Cir. 2017). First, there must be a “physical place,” i.e., a “physical, geographical location in the district from which the business of the defendant is carried out.” Id. at 1362. The Court defined a physical place as a “building or part of a building set apart for any purpose.”...

Surveying the CRISPR-Cas9 Patent Landscape in the United States

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Posted in Biotech / Patent / USPTO

On August 20, 2018

This post will discuss the patent landscape of the groundbreaking CRISPR-Cas9 systems in the United States, including pending legal disputes. A CRISPR-Cas9 system is a combination of protein and ribonucleic acid (“RNA”) that can alter the genetic sequence of an organism. CRISPR-Cas systems occur naturally in bacteria and help the bacteria target and cut identified virus deoxyribonucleic acid (“DNA”). The CRISPR-Cas9 system is being developed as a powerful tool to modify specific DNA in the genomes of more complicated organisms, including plant and animal cells. For the purpose of this overview, the mechanism of CRISPR-Cas9 is explained in the Patent Trial and Appeal Board (PTAB)’s Broad Institute v. The Regents of the University of California interference decision. As the decision explains, the CRISPR-Cas9 system comprises three effective parts: a guide-RNA sequence, an activator-RNA sequence, and a protein called Cas9. CRISPR-Cas9 alters a target DNA molecule by first binding the guide-RNA sequence to a specific sequence in the DNA of interest. The activator-RNA sequence then interacts with the Cas9 protein, and the Cas9 protein cuts the target DNA at a specific site. By linking a DNA-cutting protein (Cas9) to a specific site on the target DNA, the CRISPR-Cas9 system achieves specific targeted manipulation of DNA. The U.S. Patent and Trademark Office (USPTO) has granted patents to variations...

Supreme Court To Review Whether Non-Public Sales Are Invalidating Under Post-AIA Section 102

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Posted in Biotech / Patent / USPTO

On July 18, 2018

The Supreme Court recently agreed to review Helsinn Healthcare S.A. v. Teva Pharmaceuticals USA, Inc., a case with broad implications for the pharmaceutical industry. In the opinion below, the Federal Circuit held that after the America Invents Act (“AIA”), “if the existence of the sale is public, the details of the invention need not be publicly disclosed in the terms of sale” for the sale to be invalidating under Section 102. The Court granted Helsinn’s petition for certiorari to answer “[w]hether, under the Leahy-Smith America Invents Act, an inventor’s sale of an invention to a third party that is obligated to keep the invention confidential qualifies as prior art for purposes of determining the patentability of the invention.” Before the AIA, § 102(b) barred the patentability of an invention that was “patented or described in a printed publication in this or a foreign country or in public use or on sale in this country, more than one year prior to the date of the application for patent.” By enacting the AIA, Congress amended § 102 to bar the patentability of an “invention [that] was patented, described in a printed publication, or in public use, on sale, or otherwise available to the public before the effective filing date of the claimed invention.” In its petition for certiorari, Helsinn argued...

Post-Alice Plaintiffs Beware: The Northern District of California Awards Attorneys’ Fees in Exceptional Case

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Posted in Patent

On July 17, 2018

Abstract ideas are not patentable pursuant to 35 U.S.C. § 101. And, in Alice Corp. Pty. Ltd. v. CLS Bank Int’l, 134 S. Ct. 2347 (2014) the Supreme Court set forth a framework to determine whether a patent is directed to an unpatentable abstract idea. Following Alice, defendants frequently move to dismiss patent infringement actions based on Section 101. That is exactly what recently happened in Cellspin Soft, Inc., v. Fitbit, Inc. in the Northern District of California. In that case, the 14 defendants filed a joint motion to dismiss pursuant to Section 101, arguing that the patents were directed to the “abstract concept” of acquiring, transferring, and publishing data and that the claims recited only “generic computer technology” to carry out the abstract idea, and thus lacked a requisite “transformative step” which would render the abstract idea patentable. The District Court agreed and entered judgment in the defendants’ favor. Following their successful motion to dismiss, the defendants moved, again successfully, for attorneys’ fees under 35 U.S.C. § 285. In patent infringement actions, courts have discretion, pursuant to Section 285, to award attorneys’ fees in an “exceptional case.” And, the district court found that the Cellspin case was just that. In considering the defendants’ motion for fees, the district court acknowledged that the plaintiff’s claims lacked...

Supreme Court Expands the Scope of Damages to Include Foreign Sales

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Posted in Patent

On June 28, 2018

The Supreme Court in WesternGeco LLC v. ION Geophysical Corp. opened a new door to recover for patent damages in its holding that a patent owner can recover damages for patent infringement under 35 U.S.C. §271(f)(2) and §284 of lost foreign profits. The Patent Act outlines several ways an alleged infringer may be liable for patent infringement, including §271(f) which “expands the definition of infringement to include supplying from the United States a patented invention’s components.” 35 U.S.C. §284 authorizes “damages adequate to compensate for the infringement, but in no event less than a reasonable royalty for the use made of the invention by the infringer.” In this case, WesternGeco developed technology for surveying the ocean floor for oil and gas companies. ION Geophysical Corp. sold a competing system where the components were manufactured in the United States and shipped abroad. The Southern District of Texas found that ION Geophysical Corporation infringed WesternGeco’s patents, and that WesternGeco lost specific contracts due to ION’s infringement. The district court awarded $93.4 million in lost profits and $12.5 million in royalties. On appeal, the Court of Appeals for the Federal Circuit reversed the award of lost-profit damages following its precedent in Power Integrations, Inc. v. Fairchild Semiconductor Int’l, Inc., 711 F. 3d 1348 (Fed. Cir. 2013) which held that...

Senator Hatch Proposes Legislation Forcing Challengers to Choose Between Filing a Hatch-Waxman Action or Filing an IPR

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Posted in Patent / USPTO

On June 25, 2018

On June 13, Senator Orrin Hatch, co-author of the Hatch-Waxman Act, proposed an amendment in the Senate Judiciary Committee to modify the inter partes review (“IPR”) process for pharmaceuticals. The senator published a press release summarizing and explaining the proposed legislation. The amendment, titled the Hatch-Waxman Integrity Act of 2018, intends to “restore the careful balance the Hatch-Waxman Act struck to incentivize generic drug development” by “prevent[ing] alternative procedures for challenging drug patents from tilting the playing field contrary to Hatch-Waxman’s design.” The proposed legislation would amend Sections 505(b)(2) and 505(j)(2)(A) of the Federal Food, Drug, and Cosmetic Act (21 U.S.C. §§ 355(b)(2) and 355(j)(2)(A) respectively) to require the applicant to certify to the FDA that “neither the applicant nor any party in privity with the applicant, has filed, or will file, a petition to institute inter partes review” in order to be eligible for abbreviated regulatory approval under the Hatch-Waxman Act. The applicant would further need to certify that it “is not relying in whole or in part on any decision issued by the Patent Trial and Appeal Board in an [IPR]” in making the certification that the relevant listed patent is invalid or will not be infringed. According to Senator Hatch, the impetus for the proposed amendment is that IPRs are “producing unintended consequences in...

Incentivizing Global Monetization of U.S. Based IP Rights – The Carrot and the Stick of the 2017 Tax Act

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Posted in Licensing / Patent

On June 12, 2018

The 2017 Tax Act, signed into law on December 22, 2017, encompasses the most significant and wide-ranging changes to the U.S. Internal Revenue Code (“IRC”) since 1986. This article addresses both the new taxation of global intangible low-taxed income (“GILTI”) and a new deduction for foreign-derived intangible income (“FDII”), as they relate to patent rights. GILTI and FDII will significantly affect the tax strategies of multinational corporations, particularly those with valuable intellectual property rights held abroad. The new tax laws do not define intangible property through a list of specific types of assets, including intellectual property like patents. Rather, intangible property under the new laws encompasses anything not strictly considered a tangible asset. This expanded definition applies when determining the GILTI and FDII amounts. GILTI New IRC Section 951A effectively imposes a minimum tax on U.S. shareholders who own at least 10% of controlled foreign corporations (“CFCs”) to the extent the CFCs have “global intangible low-taxed income.” The Tax Act provides a formula for calculating GILTI, which exempts the deemed returns on tangible assets. The GILTI amount is calculated by subtracting the “net deemed tangible income return” from the “net CFC tested income.” The remainder is deemed intangible income subject to income tax. Practically, the GILTI base is determined by subtracting a normal return for the...

A Domestic Corporation Can Reside in Only One District in the State of Its Incorporation for Patent Venue

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Posted in Patent

On May 21, 2018

The Federal Circuit in In Re BigCommerce recently held in a mandamus opinion that a domestic corporation incorporated in a state having multiple judicial districts “resides” for the purposes of 28 U.S.C. § 1400(b) only in a single judicial district within that state. In so holding, the Federal Circuit resolved a district court split with competing interpretations from the Eastern District of Texas and the Central District of California. The court’s opinion provides further guidance to practitioners and clarifies jurisprudence post TC Heartland. The patent venue statute provides that patent infringement suits may be brought (1) “in the judicial district where the defendant resides,” or (2) “where the defendant has committed acts of infringement and has a regular and established place of business.” 28 U.S.C. §1400(b) (emphasis added). The Central District of California in Realtime Data LLC v Nexenta System held that a domestic corporation “resides” in the state of its incorporation “only in the judicial district in which it maintains in principal place of business.” No 2:17-cv-07690, Dkt. 28 (C.D. Cal. Jan. 23, 2018). The Eastern District of Texas in Diem v. BigCommerce came to a different conclusion, holding that “a domestic corporation resides in the state of its incorporation and if that state contains more than one judicial district, the corporate defendant resides in each such judicial...

NJ District Courts Continue to Enforce the Disclosure Requirements Regarding Contentions Pursuant to New Jersey’s Local Patent Rules

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Posted in Patent

On May 18, 2018

We previously reported in February 2014 and June 2014 that New Jersey District Court Judges will enforce the District of New Jersey’s Local Patent Rules’ contention disclosure requirements and bar parties from making arguments that were not properly disclosed in their contentions. Consistent with those rulings, in a recent opinion, in Impax Labs., Inc. v. Actavis Labs FL, Inc., Judge Chesler barred one of Actavis’s infringement arguments made during summary judgment as untimely because the argument was not sufficiently disclosed in its infringement contentions. In its opposition brief, Impax argued that Actavis raised new non-infringement arguments based on the pharmacokinetic profiles of its proposed generic product. Actavis claimed that its generic product did not meet claim limitations involving a “maximum concentration” limitation or a “40% fluctuation” limitation for two subsets of asserted claims. Upon review of Actavis’s contentions, the court found that Actavis did sufficiently disclose its non-infringement argument in regard to the “maximum concentration” limitation, but that it did not sufficiently disclose its non-infringement argument regarding the “40% fluctuation” limitation. The court found that Actavis’s non-infringement contentions regarding the “40% fluctuation” limitation stated that “there is no evidence that its products ‘result in a levodopa plasma concentration’ meeting the 40% fluctuation limitation.” Yet, in its summary judgment motion, Actavis expanded that argument by providing a...

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