The Federal Circuit recently issued a decision on an appeal from the Patent Trial and Appeal Board where the central question was whether the Board and the examiner properly relied on the same articulated reasoning and factual underpinnings in rejecting a claim, or whether instead the Board made new findings and adopted different reasons to support a new ground of rejection, thus depriving the applicant of both notice and an opportunity to respond. See In re Lutz Biedermann.
Lutz Biedermann and Jurgen Harms (collectively “Biedermann”) appealed a decision of the Board affirming the rejection of claims 32, 33, 35–37, 39, and 48 of U.S. Patent Application No. 10/306,057 (“’057 Application”) for obviousness, 35 U.S.C. § 103(a). Ultimately, the Federal Circuit, per Judge Linn (with Judges Moore and O’Malley agreeing), determined that the Board rejection did constitute a new grounds of rejection. Thus, the Board’s decision was vacated and remanded for further proceedings.
On September 26, 2013, the United States Court of Appeals for the Federal Circuit issued a panel decision in Sunovion Pharmaceuticals v. Teva Pharmaceuticals USA et al.
Sunovion appealed from the decision of the United States District Court for the District of New Jersey granting summary judgment that Dr. Reddy’s Laboratories, Ltd. and Dr. Reddy’s Laboratories, Inc. (collectively “Reddy”) do not infringe claims 1, 2, and 8 of Sunovion’s U.S. Patent 6,444,673 (the “’673 patent”). The Federal Circuit panel, per Judge Lourie, with Judges Schall and Reyna joining in the decision, concluded that, although the district court did not err in construing the asserted claims, Sunovion was entitled to a judgment of infringement as a matter of law under 35 U.S.C. § 271(e)(2)(A).
Sunovion owns the rights to the ’673 patent, which is directed to pharmaceutical compositions of the single-enantiomer drug eszopiclone, the active ingredient in the chiral drug marketed as a sleep medication under the brand name LUNESTA®. Pursuant to 21 U.S.C. § 355(b)(1), the ’673 patent is listed as referenced to LUNESTA® in the FDA’s Approved Drug Products with Therapeutic Equivalence Evaluations publication (commonly known as the “Orange Book”). During the second quarter of 2013 alone, LUNESTA® had sales of nearly $200 million.
The dispute started when Reddy submitted an Abbreviated New Drug Application (“ANDA”) to the FDA, which included a so-called paragraph IV certification with respect to the ’673 patent under the Hatch-Waxman Act, 21 U.S.C. § 355(j)(2)(A)(vii)(IV), seeking approval to manufacture, use, and sell 1 mg, 2 mg, and 3 mg eszopiclone tablets as generic versions of Lunesta® prior to the expiration of the ’673 patent. As the Hatch-Waxman Act allows Sunovion to do, they then initiated a patent infringement lawsuit, asserting that Reddy’s ANDA submission constituted an act of infringement of claims 1, 2, and 8 of the ’673 patent according to 35 U.S.C. § 271(e)(2)(A).
In The Charles Machine Works, Inc. v. Vermeer Manufacturing Co. (Fed. Cir., July 26, 2013), the patent in question was U.S. Patent 5,490,569 (the “’569 patent”), which generally relates to a two-pipe drill for boring underground holes in the horizontal direction. An inner pipe rotates the drill bit. An outer pipe, which includes a body and casing, is used for steering. The ’569 patent also discusses a structure called a “deflection shoe” as a steering mechanism. The deflection shoe is included on one side of the casing to create an asymmetry about the casing’s centerline axis. If the casing does not rotate, the deflection shoe causes the drill to deflect away from a straight path. When the casing rotates, however, the drill follows a straight horizontal path.
The Charles Machine Works (“CMW”) sued Vermeer for infringement of the ’569 patent. Asserted apparatus claims 1, 4–8, 10, 12, 18, 20–25, and 27 recite “a deflection shoe mounted on a first side of” either “the body” or “the casing.” Asserted method claims 30–31 recite “the casing having a deflection shoe thereon.”
CMW alleged infringement by two types of Vermeer drills: non-commercial prototypes and commercial products. Both types of drills include a structure called a bent sub, which CMW contends meets the “deflection shoe” and “mounted on” limitations. The prototypes include an additional structure called a wear pad. Vermeer moved for summary judgment of noninfringement, literal or under the doctrine of equivalents, of the asserted claims. The district court granted Vermeer’s motion as to all accused products. CMW appealed to the United States Court of Appeals for the Federal Circuit.
On appeal, CMW argued, among other things, that the court erred by granting summary judgment as to Vermeer’s accused prototypes. Furthermore, CMW argued that Vermeer’s motion for summary judgment covered only the accused commercial products. As a result, CMW asserted that it did not have notice that the district court was considering making a ruling relative to the prototypes, which CMW maintained are structurally different than the commercial products.
Just over one month ago, the United States Court of Appeals for the Federal Circuit issued a decision in Douglas Dynamics, LLC v. Buyers Products Co. Douglas sued Buyers for infringement of several patents related to snowplow mounting assemblies. The United States District Court for the Western District of Wisconsin granted summary judgment of non-infringement of U.S. Patent No. Re. 35,700 (’700 Patent) in favor of Buyers. Following a jury verdict that found U.S. Patent No. 5,353,530 (’530 Patent) and U.S. Patent No. 6,944,978 (’978 Patent) valid and infringed, the district court denied Douglas a permanent injunction and assigned an ongoing royalty. While this case was on appeal, the ’530 patent expired, rendering an injunction on the technology covered by that patent moot. The ’978 patent, however, remains in force.
Because the district court applied an erroneous claim construction in granting summary judgment of non-infringement of claim 45 of the ’700 Patent, the Federal Circuit reversed, with Chief Judge Rader writing the opinion and with Judge Newman joining. This Federal Circuit majority also reversed the denial of a permanent injunction against continued infringement of the ’978 Patent, and remanded the case for entry of a permanent injunction consistent with this opinion. Judge Mayer dissented and filed a separate opinion.
In what can only fairly be characterized as a patent tragedy, the United States Court of Appeals for the Federal Circuit now has no official position on the patentability of system claims that objectively recite volumes of tangible structures that clearly satisfy the machine-or-transformation test. Less than 5 years after giving the industry the rigid machine-or-transformation test, which was ultimately struck down by the Supreme Court, five of the ten judges that heard CLS Bank v. Alice Corporation en banc would find that claims that seem to clearly satisfy the machine-or-transformation test are not patent eligible.
The per curiam decision of the Federal Circuit was very brief. It simply stated:
Upon consideration en banc, a majority of the court affirms the district court’s holding that the asserted method and computer-readable media claims are not directed to eligible subject matter under 35 U.S.C. § 101. An equally divided court affirms the district court’s holding that the asserted system claims are not directed to eligible subject matter under that statute.