Fresh From the Bench: Latest Federal Circuit Court Cases

CASE OF THE WEEK

Arthrex, Inc. v. Smith & Nephew, Inc., Appeal No. 2018-2140 (Fed. Cir. Oct. 31, 2019)

In the most important case to affect America Invents Act review proceedings this year, the Federal Circuit struck down a portion of the America Invents Act as unconstitutional because the appointment of PTAB judges violates the Appointments Clause.  In this write-up, we address the Court’s decision, its fix to the constitutionality issue, and then summarize the effects in terms of past decisions and cases going forward.

ackground

IPRs are “hybrid” proceedings similar to court proceedings.  A party, subject to certain requirements, can file a petition with the PTAB, requesting that it consider the patentability of certain claims of an issued patent.  The Patent Act, 35 U.S.C. § 314, requires that the Director of the U.S. Patent and Trademark Office (“PTO”) determine whether to institute an IPR proceeding; however, the Director delegated that authority to the PTAB, see 37 C.F.R. § 42.4(a).  The PTAB consists of the Director, Deputy Director, Commissioners for both Patents and Trademarks, as well as Administrative Patent Judges (“APJ”).  The Director is appointed by the President; the Deputy Director and Commissioners are appointed by the Secretary of Commerce; and the APJs are appointed by the Secretary of Commerce, “in consultation with the Director.”  Once an IPR (or other AIA proceeding) is instituted, a three-judge panel of PTAB members conducts the IPR proceeding; that panel can consist of any of the PTAB members.  If review is not dismissed before the conclusion of the proceedings, the PTAB issues a final written decision determining patentability of the challenged claims, and after the time for appeal has expired or any appeal has been terminated, the Director issues a certificate canceling any claim of the patent if it was determined unpatentable.

Read more.
 

ALSO THIS WEEK

Customedia Tech., LLC v. Dish Network Corp., Appeal No. 2018-2239, et al (Fed. Cir. Nov. 1, 2019)

Customedia Tech., LLC v. Dish Network Corp., Appeal No. 2019-1001 (Fed. Cir. Nov. 1, 2019)

These follow-on cases from the Arthrex decision, issued the following afternoon, established that an Appointments Clause challenge under Arthrex will not be allowed for cases where the opening appeal brief has already been filed.  In each of these cases, Customedia submitted notices of supplemental authority after its opening appeal brief was filed.  The Federal Circuit held:
We conclude that Customedia has forfeited its Appointments Clause challenges. “Our law is well established that arguments not raised in the opening brief are waived.” . . . Customedia did not raise any semblance of an Appointments Clause challenge in its opening briefs or raise this challenge in a motion filed prior to its opening briefs. Consequently, we must treat that argument as forfeited in these appeals.

The opinions can be found here and here.

Uniloc 2017 LLC v. Facebook, Inc., Appeal No. 2018-2251 (Fed. Cir. Nov. 1, 2019) (non-precedential)

In a separate case where an Appointments Clause challenge was raised in the opening briefs, the Federal Circuit struck the case from the oral arguments calendar for November 4, 2019 and remanded to the PTAB.

The opinion can be found here.

Idenix Pharms. LLC v. Gilead Sciences, Inc., Appeal No. 2018-1691 (Fed. Cir. Oct. 30, 2019).

In an appeal from a post-trial motion to find claims invalid as enabled, the Federal Circuit affirmed, and further found the claims invalid for failure to meet the written description requirement.  The patent at issue covers pharmaceuticals used for treating hepatitis C.  It claims a molecular structure with five carbon atoms to which different atoms or groups of atoms can be attached, and a methyl group in one of the positions and a “non-hydrogen substituent” at two other positions.  This yields literally billions of possibilities of molecular structures, and the patent itself disclosed a large number of possibilities.  The district court also held that the pharmaceutical must be efficacious in treating hepatitis C.  Thus, the claims have both a structural requirement (molecular structure) and a functional requirement (treatment of the disease).  After a jury trial, the district court found the claims invalid because a person would not know which of those billions of molecules would be able to treat hepatitis C.  The Federal Circuit affirmed in a 25-page opinion authored by Chief Judge Prost.  Judge Newman dissented.

The opinion can be found here.

Liqwd, Inc. v. L’Oreal USA, Inc., Appeal No. 2018-2152 (Fed. Cir. Oct. 30, 2019)

In this case, the Federal Circuit vacated and remanded a post-grant review determination that claims of Liqwd’s keratin treatment patent were unpatentable as obvious.  While the Court agreed with the PTAB’s determination that all limitations were disclosed in the prior art, it found that the Board erroneously disregarded as irrelevant a factual finding that L’Oreal would not have developed its accused products without access to Liqwd’s confidential, unpublished patent application.  The Court distinguished its prior decision in Iron Grip Barbell Co. v. USA Sports, Inc., 392 1317 (Fed. Cir. 2004), in which it had found that evidence of similarity to an issued patent did not rise to “copying” as relevant to objective indicia of non-obviousness, which “require[d] the replication of a specific product.”  Collecting authority recognizing such “copying” where an accused infringer made development choices based on public information about a patented invention, the Court held that “where there is evidence of actual copying efforts, that evidence is always relevant.”  Because substantial evidence supported the Board’s conclusion that L’Oreal’s development resulted from its access to Liqwd’s confidential patent application, the Court vacated and remanded for the Board to weigh that evidence accordingly in its obviousness analysis.

The opinion can be found here.

Written by: Scott D. Eads and Nika Aldrich, Schwabe Williamson & Wyatt

Contributors: Jason Wrubleski and Erin Forbes