Delaware IP Law Blog

On May 17, 2007, Judge Thynge issued a claim construction opinion in Crown Packaging Technology, Inc. and Crown Crok & Seal USA, Inc. v. Rexam Beverage Can Co. C.A. No. 05-608-MPT, Memorandum Order (D. Del. May 17, 2007). Consistent with Phillips v. AWH Corp, 415 F.3d 1303 (Fed. Cir. 2005), the court construed various claim terms set forth in both parties' patents related to beverage can technology.

In its first decision on obviousness since the Supreme Court handed down the KSR Int'l Co. v. Teleflex, Inc. decision, the Federal Circuit affirmed a District Court of Delaware decision finding Leapfrog's patent obvious in light of the prior art. Leapfrog Enterprises, Inc. v. Fisher-Price, Inc. and Mattel, Inc. (Fed. Cir. May 9, 2007).

Leapfrog accused Fisher Price's Power Touch device of infringing its patent. After a full jury trial, the jury deadlocked and the case was submitted to the Court for its decision on infringement and invalidity. Judge Sleet wrote the District Court opinion finding Leapfrog's patent both not infringed and invalid. Leapfrog appealed both outcomes to the Federal Circuit.

The Federal Circuit affirmed J. Sleet's findings that the Leapfrog patent was both not infringed and invalid for obviousness. The Court noted that the approach to be taken in any obviousness analysis is one of common sense and not a rigid formula. "Any obviousness determination is not the result of a rigid formula disassociated from the consideration of the facts of a case. Indeed, the common sense of those skilled in the art demonstrates why some combinations would have been obvious where others would not." Id. at 7 (referring to the KSR opinion). In its application of this common sense approach to the facts-at-hand, the Federal Circuit found that the combination of two pieces of prior art would have been obvious to combine. Id. ("Accommodating a prior art mechanical device that accomplishes that goal to modern electronics would have been reasonably obvious to one of ordinary skill in designing children's learning devices."). This combination of art still left out the "reader" requirement of one of the claims, however, the Court also affirmed the District Court's finding that the addition of this reader also would have been obvious to one of skill in the and that Leapfrog presented "no evidence that the inclusion of a reader in this type of device was uniquely challenging or difficult for one of ordinary skill in the art." Id. at 10 (again referring the KSR opinion). also affirmed the lower court finding of non-infringement.

Interestingly, at a recent forum in Sweden, Judge Randall Rader from the Federal Circuit noted that the decision in Leapfrog was actually written before the Supreme Court decision in KSR and "did not require one iota of change." See posting on Intellectual Asset Management Magazine (link here). This comment further fuels the fire of those proponents that KSR has not changed the obviousness standard but only clarified what has been used by the courts for years.

You will also find an interesting post and comments at www.patently-o.com.

5/21: Allergan, Inc. v. Apotex, Inc. and Apotex Corp. (patent infringement)
5/22: Somerset Pharmaceuticals, Inc. v. Jon W. Dudas (application for one year interim extension or obtainment of final non-appealable judicial decision on eligibility of patent; 35 U.S.C. Section 156(e)(2))
5/24: Iovate Health Sciences U.S.A., Inc., Iovate Health Sciences International, Inc., Iovate T&P, Inc., Flamma SpA and USE Techno Corporation v. WellNx Life Sciences, Inc., NxCare, Inc., NxLabs, Inc., Slimquick Laboratories, Biogenetix, Derek Woodgate and Bradley Woodgate (patent infringement)
5/25: Takeda Pharmaceutical Company Ltd., Tap Pharmaceutical Products, Inc. and Etypharm, S.A. v. Teva Pharmaceuticals USA, Inc. and Teva Pharmaceutical Industries Ltd. (patent infringement)
5/25: Teva Pharmaceutical Industries Ltd. and Teva Pharmaceuticals USA, Inc. v. Torrent Pharmaceuticals Ltd. and Torrent Pharma Inc. (declatory judgment for patent infringement)
5/25: Boston Scientific Corporation and Boston Scientific Scimed, Inc. v. Johnson & Johnson, Inc. and Cordis Corporation (declaratory judgment action for patent infringement)

Merck & Co. v. Apotex, Inc., C.A. No. 06-230 (GMS) (D. Del. May 21, 2007).

Judge Sleet granted Merck's motion to dismiss this case for lack of subject matter jurisdiction after Merck comprehensively covenanted not to sue Apotex over its generic version of Fosamax, despite the alleged jurisdictional "gaming" of the Hatch-Waxman Act's "triggering events" by Merck. This opinion addresses an important issue in ANDA litigation, so I will break down this opinion in more detail than usual.

Facts

Merck owns nine Orange Book patents for Fosamax. Apotex filed an ANDA seeking to make a generic version of Fosamax, certifying to the FDA that Merck's patents were invalid, unenforceable, and/or not infringed by its generic. Apotex informed Merck of its ANDA, and Merck filed suit under the Hatch-Waxman Act for infringement in April 2006. Apotex counterclaimed for a declaratory judgment of invalidity and noninfringement. In August 2006, Merck granted Apotex a comprehensive covenant not to sue and then moved to dismiss the case for lack of subject matter jurisdiction.

The Heart of the Problem - Gamesmanship

Essentially, the brand-name drug companies have found a loophole in the interaction between the Hatch-Waxman Act and the federal courts that delays generic manufacturers' entry into the marketplace. The Hatch-Waxman Act provides that a patentee may sue an ANDA applicant that submits an application with a paragraph IV certification (that the brand name drug's patent(s) is invalid/unenforceable/not infringed) for infringement. If the brand name manufacturer files suit within 45 days of receiving notice of the application, then a 30-month stay of the generic application's approval is invoked. The 30-month stay can only be lifted by an earlier decision in a patent infringement case or by Court order to shorten or lengthen the stay. The loophole goes like this: 1) generic files application, 2) brand name files suit for infringement within 45 days, invoking the 30-month stay, 3) the brand name covenants not to sue the generic, depriving the district court of jurisdiction, and 4) the infringement case is dismissed, but the 30-month stay remains because no "triggering event" has occurred. The advantage to the brand name manufacturer is a potentially longer period of exclusivity than if the district court had found in favor of the generic manufacturer on the merits.

Judge Sleet notes quite strongly that the practical realities of this system unnecessarily strain the court system. Op. at 10, fn. 4.

The Court's Hands Are Tied

The Court analyzed the continued existence of an actual case or controversy under the Federal Circuit's recent decision in Teva v. Novartis, which announced the end of the "reasonable apprehension of suit" test, ushering in a broader "actual controversy" inquiry dictated by the Supreme Court's MedImmune decision. The Court found that "Apotex's advancement of this case against Merck [after Merck's covenant not to sue] becomes merely a means to an end, where the desired "end" is a triggering event but the means to that end, the litigation itself, is not sanctioned under the current legal framework." Op. at 8. Thus, the Court held that Merck's covenant not to sue deprived it of jurisdiction over Apotex's declaratory judgment counterclaims under Super Sack and dismissed the suit.

Antitrust Implications?

Apotex argued to the Court that "Merck's actions of filing suit, covenanting not to sue, and moving to dismiss for lack of jurisdiction, are an unlawfully anticompetitive and monopolistic scheme to delay entry by Apotex and other generic filers into the market…." Op. at 13. Ultimately, the Court found that while Apotex may suffer a business disadvantage from Merck's use of the Hatch-Waxman scheme, this disadvantage is not actionable as an antitrust violation because it is sanctioned and contemplated by the Hatch-Waxman Act. Op. at 18. As such, the Court denied Apotex's motion to amend its complaint to add antitrust claims as futile.

Conclusion

Just when everyone thought that Teva v. Novartis would make it easier for generic manufacturers to maintain suits against patentees, the brand name manufacturers come up with a new tactic. Looking forward, it will be interesting to see how the FDA and Congress deal with this loophole. Considering the amount of money on the line, I'm sure the Federal Circuit will also get a chance to opine on this case.

Last Friday, in conjunction with the Delaware chapter of the Federal Bar Association, the judges of the District of Delaware hosted a wide-ranging and candid CLE on the role of Delaware counsel in federal litigation. During the program, the first of many to come on Delaware practice, Chief Judge Robinson, Judge Farnan, and Judge Sleet each commented on their views from the bench: on judging, on patents, and on the roles both Delaware and pro hac vice counsel are expected to fulfill.

The discussion ranged from the procedural - the ramifications of late filing, the scope of the meet and confer requirement - to the strategic - how to construct an effective summary judgment appendix, the judges' approaches to discovery disputes and the corresponding use of special masters, and communicating with chambers on emergency matters. The discussion also moved to the imperative - what not to do in your case. And, when the conversation turned to ways that practitioners could keep up to date on the judges' preferred practices, the Delaware IP Law Blog was mentioned as a possible medium.

Thanks to the judges, John Shaw, Steve Balick, and the Federal Bar Association for both organizing this invaluable program, and for supporting the litigants that appear in this district.

To find out more about the work of the Federal Bar Association and to obtain a membership application, click here. As Judge Farnan emphasized, all members of the Delaware chapter of the FBA are entitled to attend the upcoming district court programs for free.

5/15: Abbott Laboratories and Abbott Cardiovascular Systems, Inc. v. Johnson and Johnson, Inc. and Cordis Corp. (declaratory judgment/patent infringement)
5/16: Parker-Hannifin Corp. v. Schlegel Electronic Materials, Inc. (patent infringement)
5/18: Intermec Technologies Corp. v. Palm, Inc. (patent infringement)

In an opinion filed Tuesday, Chief Judge Robinson addressed whether a plaintiff may maintain an action for conversion of property (here, a virus strain) that plaintiff possessed only in copy form. Answering no, the Court found that "conversion cannot lie in the absence of the physical possession of the actual good or chattel owned by the plaintiff."

Thus, "[e]ven if the law supports the proposition that the physical possession of copies of a chattel may be a basis for conversion, the court has found no cases where the chattel sought to be returned was never in the actual possession of the alleged owner."

Because plaintiff possessed stock of the same strain, but not the identical sample, of defendant's strain, plaintiff did not have "physical possession" of the property, and therefore could not pursue its conversion claim.

While the Court rested its decision on grounds beyond the copying issue, its discussion of "physical" and "actual" possession in the context of copies is notable in light of the Supreme Court's recent Microsoft Corp. v. AT&T Corp. decision, which also addressed the issue of liability in tort for duplication of property. Although there are differences (most notably the echoes of international comity running throughout the Supreme Court's opinion), the two cases raise the question of how far liability should extend to products that are easily copied and modified as a matter of course in the relevant field.

In terms of judicial development, the ancient action for conversion has a leg up on the "new" statutory tort of infringement. The Delaware Court reaffirmed the common law principle that possessing the chattel in question is a prerequisite to relief. Perhaps the Supreme Court, in wading through the contours of infringement and its applicability to copies, also gave a nod to this common law possession rule.

Bavarian Nordic A/S v. Acambis Inc., C.A. No. 05-614-SLR (May 15, 2007) (Robinson, C.J.)

Just a reminder that the Federal Bar Association's Delaware Chapter is hosting a CLE on The Role of Local Counsel this Friday, May 18th, from 2-5 at the federal courthouse. Chief Judge Robinson and soon-to-be Chief Judge Sleet will be panelists, as well as Clerk of Court Dr. Dalleo, Steve Balick from Ashby & Geddes, and FBA President John Shaw from our office.

The course has been approved for 2.5 hours of credit, including 2.0 hours of ethics credit.

Hope to see you there!

A frequent issue that arises in patent litigation is how to secure the testimony of inventors who are no longer employed by the plaintiff (or defendant in a declaratory judgment action). This issue becomes even more complicated when the inventors do not reside in the United States. The language of any assignment agreement is often outcome-determinative, as was the case in Amgen, Inc., et al. v. Ariad Pharmaceuticals, Inc., et al. C.A. No. 06-259, Memorandum Order (D. Del. May 14, 2007) (Thynge, J.).

Amgen in its declaratory judgment action against Ariad moved to compel the deposition of 3 (of 13 total) inventors on the patent-in-suit whom Ariad refused to produce. These three inventors were all located overseas and were no longer employed by the defendants, however, all three executed assignment agreements. The assignment provided, in relevant part, that they would: "…perform any other lawful acts which may be deemed necessary to secure fully the aforesaid invention to said ASSIGNEE…including the execution of applications for patents in foreign countries, and the execution of substitution, reissue, divisional or continuation applications and preliminary or other statements and the giving of testimony in any interference or other proceeding in which said invention or any application or patent directed thereto may be involved." Id. at 2.

Ariad opposed the deposition request because none of the inventors were ever employed by or affiliated with them, there were ten other inventors that were available for deposition and the language of the assignment was only related to perfecting title of the invention and did not require them to assist in infringement or declaratory judgment actions. Id. at 3.

The Court found that unlike the language in the assignment found in Minebea Co., LTD, et al. v. Papst, et al. , 370 F. Supp. 2d 302, 308 (D.D.C. 2005) ("to render such assistance…as may be necessary to perfect title to the…Patent Rights."), there was no mention in the current assignment of perfecting title and the assignment was further not limited to assisting in prosecuting patent applications. This assignment agreement specifically required the inventors to "secure fully the invention" and testify in any legal proceedings involving the invention or patent for that invention and therefore the Court required Ariad to produce the three inventors in the U.S. for deposition at Amgen's cost. Id. at 5, 6.

Ariad's argument that ten other inventors on the patent-in-suit were available for deposition also did not persuade the Court otherwise. The Court found that each inventor's contribution to this patent that "addresses complicated bioscience" is relevant. Furthermore, the Court noted, ARIAD had produced two of these inventors in other litigation surrounding the same patent. Id. at 6.

A note to practitioners: be mindful of any time elapsing before filing a motion for preliminary injunction as it could be a reason for denying the relief. On May 9, 2007, Magistrate Judge Thynge issued an opinion in the case of Digene Corporation v. Ventana Medical Systems, Inc. and Beckman Coulter, Inc. denying plaintiff's request for preliminary injunctive relief for lack of showing irreparable harm or likelihood of success on the merits. C.A. No. 01-752 (D. Del. May 9, 2007) (Thynge, J.). Digene sought to enjoin defendant Ventana from making, using, selling or offering to sell reagents that contain HPV35, a human papillomavirus. This motion was filed 58 months from the date the initial complaint was filed and 30 months after, if one were to subtract the stay that was in place while Digene and Beckman Coulter engaged in arbitration proceedings before the International Centre for Dispute Resolution. The Court noted that "delay in seeking a preliminary injunction is a significant factor bearing on the need for it." Id. at 15. There was no "plausible explanation" in the record as to why Digene waited such a long period of time to file its motion. Id. In fact, Digene had filed a motion in 2003 seeking a more limited injunction to prevent Ventana from entering into a deal with third parties yet did not address any of the irreparable harm in that motion that it now claims to be suffering from. Id. Delay, the Court stated, "for a significant period of time before seeking a preliminary injunction intimates that the status quo is not causing irreparable harm." Id. at 16.

The Court further found that Digene's argument that Ventana was causing a possible loss of customer relations or effect on its market share was only "speculation" since the actual evidence showed continued "substantial growth" by Digene in the relevant market.

The Court earlier in the opinion found that Digene had also not established a likelihood of success on the merits.

The question remains: how long is too long - but the better practice…better safe than sorry. So file those motions as early as possible to avoid a finding of delay.

5/9: Purdue Pharma Products L.P., NAPP Pharmaceutical Group Ltd., Biovail Laboratories International SRL, and Ortho-McNeil, Inc. v. Par Pharmaceuticals, Inc. and Par Pharmaceutical Companies, Inc. (patent infringement)

Yesterday, in the District of Delaware a jury found in favor of plaintiff, Telcordia Tech. Inc. and against defendant, CISCO Systems, Inc. More details as they become available…

Update: Read the jury verdict form here

5/4: Oscient Pharmaceuticals Corp. and Guardian II Acquisition v. Antara Biosciences, Inc. (trademark infringement)
5/4: Abbott Laboratories v. Teva Pharmaceuticals USA, Inc. (patent infringement)
5/4: Samsung Electronics Co. Ltd. v. Renesas Technology Corp. and Renesas Technology America Inc. (patent infringement)

4/26: Alma Laserts, Ltd. and Alma Laserts, Inc. v. Thermage, Inc. (declaratory judgment/patent infringement)
4/27: Voith Paper GmBH & Co.KG v. Johnsonfoils, Inc. (patent infringement)

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Syngenta brought a suit in the District of Delaware alleging that Monsanto infringed three of its patents relating to genetically-modified corn. The district court held two of the patents not infringed as a matter of law. As to the third patent, a jury found the asserted claims infringed but invalid as obvious and lacking an adequate written description. On appeal, the Federal Circuit affirmed Judge Robinson's finding of noninfringement of two patents and affirmed the jury's decision finding the third patent obviousness. The appeals court did not reach the issue of the written description's adequacy because they affirmed the jury's verdict on obviousness grounds.

Although this is a post-KSR decision involving obviousness, the appeals court did not address the teaching/suggestion/motivation test at issue in KSR. Instead, the court found that jury's verdict was supported by substantial evidence without discussing the proper obviousness test. As to Judge Robinson's finding of noninfringement of two of the patents in suit, the appeals court held that Syngenta had waived the theory of claim construction argued to the Federal Circuit by not raising that same construction at the trial court level. Op. at 11.

The Supreme Court handed down its much anticipated decision in KSR Int'l Co. v. Teleflex Inc. yesterday, striking a blow to the Federal Circuit's so-called "teaching, suggestion, or motivation" (TSM) test for obviousness. The Court rejected a rigid formulation of obviousness, holding that "neither the particular motivation nor the avowed purpose of the patentee controls[;] [w]hat matters is the objective reach of the claim." With the subjective TSM test set aside, at least in name, how will KSR affect the District of Delaware?

A look at this district's recent obviousness jurisprudence indicates that, even when applying TSM, objective standards have always controlled.

Within the past several weeks, Chief Judge Robinson issued an opinion denying a jmol motion that sought, on obviousness grounds, to overturn a jury's finding. The Court rejected that assertion, citing testimony that the relevant scientific "community" did not believe the patentee's innovation was feasible. Advanced Cardiovascular Sys. v. Medtronic Vascular, Inc., 98-80-SLR (D. Del. March 29, 2007); see also Boston Sci. Scimed, Inc. v. Cordis Corp., 03-283-SLR (D. Del. June 16, 2006) (Robinson, C.J.) ("The objective evidence of nonobviousness . . . should when present always be considered as an integral part of the analysis.").

Judge Farnan has similarly relied heavily on objective standards when assessing TSM. In a recent decision, the Court rejected a claim of obviousness: "[The expert] failed to demonstrate any motivation for one skilled in the art to combine the references to which he referred, and the Court is persuaded that the ability of one skilled in the art to combine those references would have required undue experimentation." Forest Labs. Inc. v. Ivax Pharms. Inc., 03-891-JJF (D. Del. July 13, 2006) (Farnan, J.)

Perhaps Judge Sleet anticipated best the Supreme Court's emphasis that primary considerations of obviousness extend beyond the elements of TSM:

"Section 103 precludes [ ] hindsight discounting of the value of new combinations by requiring assessment of the invention as a whole. This court has provided further assurance of an "as a whole" assessment of the invention under § 103 by requiring a showing that an artisan of ordinary skill in the art at the time of invention, confronted by the same problems as the inventor and with no knowledge of the claimed invention, would select the various elements from the prior art and combine them in the claimed manner. In other words, the examiner or court must show some suggestion or motivation, before the invention itself, to make the new combination."

Leapfrog Enters. v. Fisher-Price, Inc., 03-927-GMS (D. Del. March 30, 2006) (Sleet, J. (finding obviousness based on the "hypothetical" inventor standard).

Although in each instance the Court applied TSM, its language indicates that the test has always been only one means to the broader end of the invalidity analysis.