Fitch Even News Feed Dec 2019 00:00:00 -0800firmwise Even Partner David Gosse to Moderate Panel at AIPLA Road Show<p>Fitch Even partner <a href=";A=2585&amp;format=xml&amp;p=5482">David A. Gosse</a> will serve as a panel moderator during a daylong CLE conference, &ldquo;AIPLA on the Road: The Latest on Patent Practice Before the USPTO and the PTAB,&rdquo; in Boston on December 10.</p> <p>The panel Dave is moderating, &ldquo;Best Practices in Trial Proceedings,&rdquo; will discuss updates in the USPTO&rsquo;s AIA Trial Practice Guide along with perspectives on these updates and tips for success at the PTAB. Panelists will include Vice Chief Administrative Patent Judge Michael Tierney and practitioners from around the country.</p> <p>For more information and to register for the conference, please visit the <a href="">AIPLA website</a>.</p> <p>A longtime active member of the American Intellectual Property Law Association, Dave is currently serving as Vice Chair of the PTAB Trial Committee.&nbsp;</p>Professional Activities04 Dec 2019 00:00:00 -0800 Alert: Supreme Court to Hear <i>Google v. Oracle</i> Copyright Case<p>Last Friday, the U.S. Supreme Court agreed to weigh in on <i>Google LLC v. Oracle America, Inc., </i>the long-running copyright dispute involving Oracle&rsquo;s claims that Google unlawfully used Oracle&rsquo;s software code in its Android operating system. Google had petitioned the Court following the <a href=";an=75585&amp;format=xml&amp;p=5486">Federal Circuit&rsquo;s ruling last year</a> that Google had violated Oracle&rsquo;s copyright.</p> <p>The Court will consider the following issues:</p> <p>1. Whether copyright protection extends to a software interface.</p> <p>2. Whether, as the jury found, petitioner&rsquo;s use of a software interface in the context of creating a new computer program constitutes fair use.</p> <p>Fitch Even attorneys are monitoring this case and will report once a decision has been released.</p> <p>&nbsp;</p> <p><b>Fitch Even IP Alert<sup>&reg;</sup></b></p>IP Alerts18 Nov 2019 00:00:00 -0800 Alert: Seventh Circuit Adopts <i>Octane</i>'s Fee Standard for Trademark Cases<p>On November 8, in <i><a href=";rct=j&amp;q=&amp;esrc=s&amp;source=web&amp;cd=5&amp;ved=2ahUKEwi5lJ6oyerlAhXsHDQIHcepAugQFjAEegQIBBAC&amp;;usg=AOvVaw2rdUUH_kfu3ukX8EBM9PcH">LHO Chicago River, L.L.C. v. Joseph Perillo, et al.</a></i>, the Seventh Circuit held that the totality-of-the-circumstances approach introduced in patent case <i>Octane Fitness, LLC v. ICON Health &amp; Fitness, Inc.</i>, should be applied in determining an award of attorneys&rsquo; fees under the Lanham Act. This case overruled earlier decisions that had required a more stringent showing of bad faith by the litigant.</p> <p>LHO, owner of &ldquo;Hotel Chicago,&rdquo; sued the defendants for trademark infringement, unfair competition, and deceptive trade practices after they opened a venue bearing an allegedly deceptively similar name. LHO later filed a motion to voluntarily dismiss its claims, which the district court granted.</p> <p>Subsequently, the defendants sought attorneys&rsquo; fees under the Lanham Act, which provides such an award to the prevailing party in &ldquo;exceptional cases.&rdquo; In its determination of the exceptionality of the case at hand, the district judge found that attorneys&rsquo; fees were not warranted under the &ldquo;abuse of process&rdquo; standard as per Seventh Circuit precedent. Defendants appealed, arguing that this standard was incorrect.</p> <p>The Seventh Circuit analyzed two standards for whether to award fees. The court first discussed the circuit&rsquo;s current prevailing standard implemented in earlier cases, which holds that a case is &ldquo;exceptional&rdquo; if it amounts to an abuse of process. An abuse of process occurs when a claim is (1) &ldquo;objectively unreasonable because it is one a rational litigant would pursue only because it would impose disproportionate costs on his opponent&rdquo;; or (2) when a party brings a frivolous claim with the purpose of obtaining an advantage external to the litigation, &ldquo;unrelated to obtaining a favorable judgment.&rdquo;</p> <p>The Seventh Circuit then evaluated the Supreme Court&rsquo;s interpretation of the term &ldquo;exceptional&rdquo; in <i>Octane</i>. In that case, the Court found that &ldquo;an &lsquo;exceptional&rsquo; case is simply one that stands out from others with respect to the substantive strength of a party&rsquo;s litigating position . . . or the unreasonable manner in which the case was litigated.&rdquo; Although the facts in <i>Octane </i>involved the Court&rsquo;s analysis of the Patent Act, both the Patent Act and the Lanham Act feature identical language regarding an award of attorneys&rsquo; fees in exceptional cases. Thus, the Supreme Court&rsquo;s interpretation of the term &ldquo;exceptional&rdquo; in <i>Octane </i>was dispositive in the trademark case at hand.</p> <p>Moreover, the Supreme Court also provided that an &ldquo;exceptional&rdquo; case is determined based on the more relaxed totality of the circumstances standard. A court&rsquo;s consideration of the totality of the circumstances should include an analysis of various factors, including &ldquo;frivolousness, motivation, objective unreasonableness . . . and the need in particular circumstances to advance considerations of compensation and deterrence.&rdquo;</p> <p>The Supreme Court&rsquo;s analysis of &ldquo;exceptional&rdquo; had also been based on the trademark case <i>Noxell Corp. v. Firehouse No. 1 Bar-B-Que Rest.</i>, in which the D.C. Circuit interpreted the term to mean &ldquo;uncommon&rdquo; or &ldquo;not run-of-the-mill&rdquo; and concluded that an exceptional case may sufficiently set itself apart from &ldquo;mine-run cases&rdquo; if it presents either subjective bad faith or particularly meritless claims. The Court in <i>Octane</i> ultimately held that a case may be considered to be &ldquo;exceptional&rdquo; for conduct amounting to less than &ldquo;bad faith.&rdquo;</p> <p>Based on the Supreme Court&rsquo;s analysis, the Seventh Circuit overturned its earlier decisions and held that <i>Octane</i>&rsquo;s &ldquo;exceptional case&rdquo; rule should be applied as the governing framework for requests for attorneys&rsquo; fees under the Lanham Act. Therefore, the Seventh Circuit vacated the district court&rsquo;s order and remanded the case, instructing the district judge to consider the parties&rsquo; fee dispute through an examination of the totality of the circumstances in light of the <i>Octane </i>factors.</p> <p>The Seventh Circuit&rsquo;s decision introduces a more relaxed standard in determining whether a case is exceptional according to the Lanham Act. The new rule is favorable to parties seeking an award of attorneys&rsquo; fees because courts can now grant such requests for matters that involve less than bad faith.</p> <p>For more information on this decision, please contact Fitch Even attorney <a href=";A=16851&amp;format=xml&amp;p=5482">Kerianne A. Strachan</a>, author of this alert.<br /> &nbsp;</p> <p><b>Fitch Even IP Alert<sup>&reg;</sup></b></p>IP Alerts14 Nov 2019 00:00:00 -0800 Even Welcomes New Attorneys to Chicago Office<p>Fitch, Even, Tabin &amp; Flannery is pleased to announce that&nbsp;Jacqueline L. Thompson and Zachary Van Engen have joined the firm&rsquo;s Chicago office as associates.</p> <p><a href=";A=19278&amp;format=xml&amp;p=5482">Jacqueline L. Thompson</a> assists clients with patent preparation and prosecution, product clearance and legal opinions, and IP litigation. She has worked with companies in industries that include chemical engineering, food science, mechanical engineering, and biomedical engineering, among others. Jackie had previously worked with Fitch Even as a law clerk for over two years. She graduated <i>magna cum laude</i> from the University of Illinois College of Law in May 2019 and earned a B.S. degree in Chemical Engineering, <i>cum laude</i>, from the University of Michigan in 2011. Prior to attending law school, Jackie worked for several years as an engineer at a power company, a global manufacturer, and an engineering and design company.</p> <p>A registered patent attorney, <a href=";A=19279&amp;format=xml&amp;p=5482">Zachary Van Engen</a> currently focuses his practice on patent preparation and prosecution, product clearance studies, freedom-to-operate and infringement analysis, and IP-related due diligence and transactions. As a law clerk with Fitch Even for over two years, Zach worked with clients innovating in areas including computer technology, electronics, mechanical engineering, and medical devices. He earned his J.D. from Chicago-Kent College of Law, graduating <i>magna cum laude</i> in May 2019. He received both a B.S. degree in Electrical Engineering and a B.A. degree in Physics from Dordt University in 2016. While at Dordt, Zach gained engineering experience in two year-long internships at a large electrical engineering and construction company and a commercial vehicle and equipment manufacturer.</p> <p>We are delighted to welcome Jackie and Zach in their new capacities with the Fitch Even team!<br /> &nbsp;</p>Firm News11 Nov 2019 00:00:00 -0800 Alert: Federal Circuit Rules Administrative Patent Judge Appointments Unconstitutional<p>On October 31, in <i><a href="">Arthrex, Inc. v. Smith &amp; Nephew, Inc.</a></i>, the Federal Circuit held that the process for appointing Administrative Patent Judges (APJs), defined in Title 35 of the U.S. Code (&quot;the patent statute&quot;), was unconstitutional as enacted. The case potentially will have sweeping ramifications for a large number of pending PTAB appeals. For parties with a pending appeal from the Patent Trial and Appeal Board (PTAB), the Federal Circuit&rsquo;s decision appears to give a possible right to a rehearing of the matter by a different panel of APJs.</p> <p>Arthrex filed this appeal in the Federal Circuit following an <i>inter partes </i>review (IPR) where the PTAB found Arthrex&rsquo;s patent invalid as anticipated. In addition to appealing the PTAB&rsquo;s decision, Arthrex further contended that the process for appointment of APJs under the patent statute was unconstitutional. Even though Arthrex had not raised this issue before the PTAB, the Federal Circuit decided to exercise their discretion to decide the issue.</p> <p>Arthrex argued that the appointment of APJs under the patent statute is unconstitutional because it violates the Appointments Clause found in Article II of the Constitution. The Appointments Clause provides: &ldquo;[The President] shall nominate, and by and with the Advice and Consent of Senate shall appoint . .&nbsp;. all other Officers of the United States.&rdquo; Under the patent statute, however, APJs are appointed by the Secretary of Commerce, in consultation with the Director of the U.S. Patent and Trademark Office (USPTO). The question, then, under constitutional law precedent, was whether APJs are &ldquo;Officers of the United States&rdquo; and further whether they are &ldquo;principal officers&rdquo; or &ldquo;inferior officers.&rdquo; The Appointments Clause of the Constitution requires principal officers to be appointed by the President, so appointment of principal officers by the Secretary of Commerce would be unconstitutional.</p> <p>Arthrex argued that the APJs exercise the type of significant authority that renders them &ldquo;Officers of the United States.&rdquo; The Federal Circuit agreed, noting that APJs hold an office established by law, exercise significant discretion when deciding IPRs, oversee discovery, hear oral arguments, and issue final written decisions ultimately determining whether patent claims are patentable or not.</p> <p>Having found APJs to be officers, the remaining question was whether they were principal or inferior officers. In a prior case, the Supreme Court laid out a three-factor test for determining whether an officer was a principal officer or an inferior officer: (1) whether a presidentially appointed official has the power to review and reverse the officers&rsquo; decision; (2) the level of supervision and oversight the appointed official has over other officers; and (3) the appointed official&rsquo;s power to remove the officers. Under Supreme Court precedent, the extent of the direction or control in the relationship is the central consideration. The Federal Circuit found only two officers who provide direction to PTAB APJs&mdash;specifically, the Secretary of Commerce and the Director of the USPTO.</p> <p>Evaluating the first factor, the Federal Circuit noted the significance of whether a presidentially appointed official has the power to review an officer&rsquo;s decision such that the officer cannot independently &ldquo;render a final decision on behalf of the United States.&rdquo; In the case of the PTAB APJs, no presidentially appointed officer has independent statutory authority to review a final written decision by the APJs before the decision issues. Moreover, there is no statutory provision or procedure for the USPTO director to single-handedly review, nullify, or reverse a final written decision of APJs. The Federal Circuit thus found that there is insufficient review within the agency over APJ panel decisions, which weighed in favor of finding the APJs were principal officers.</p> <p>Turning to the second factor, the Federal Circuit evaluated the level of supervision and oversight exercised by the USPTO director over the APJs. As evidence of supervision, the Federal Circuit found the director has the authority to issue regulations governing the conduct of IPRs, to issue policy directives, and to supervise the management of the USPTO. Moreover, no decision of the PTAB can be designated or de-designated as precedential without the d Director&rsquo;s approval, and all precedential decisions of the PTAB are binding on future panels. All this led the court to conclude that this factor weighs in favor of finding APJs inferior officers.</p> <p>Regarding the third factor, the Federal Circuit found that both the Secretary of Commerce and the Director of the USPTO lack unfettered removal authority of APJs. Appellees Smith &amp; Nephew argued that the director effectively has removal authority because of the granted ability to decide to not assign a judge to any panels. The Federal Circuit found this argument unpersuasive and explained that the only actual removal authority the director and the Secretary of Commerce have is found under 35 U.S.C. &sect; 3(c), which provides that all officers and employees of the USPTO are subject to the provisions in another statute governing other federal employees. Specifically, APJs can only be removed from service for &ldquo;such cause as will promote the efficiency of the service,&rdquo; meaning for &ldquo;misconduct [that] is likely to have an adverse impact on the agency&rsquo;s performance of its functions.&rdquo; This lack of removal power weighed in favor of finding the APJs were principal officers.</p> <p>Having considered these three factors, the Federal Circuit concluded that APJs were indeed principal officers, stating, &ldquo;As such, [APJs] must be appointed by the President and confirmed by the Senate; because they are not, the current structure of the Board violates the Appointments Clause.&rdquo;</p> <p>To address the constitutionality issue, the Federal Circuit examined whether any portion of the patent statute should be &ldquo;severed&rdquo; to make the APJ appointments constitutional while being the least disruptive. The U.S. Government, an intervenor in this case, proposed several ways to correct the patent statute such that APJs would qualify as inferior officers. The court rejected most of these options and concluded that it was least disruptive to sever the removal provision under 35 U.S.C. &sect; 3(c). This lifts the USPTO director&rsquo;s restrictions on removing APJs, giving the director sufficient removal power such that APJs are inferior officers who do not need to be appointed by the President and confirmed by the Senate.</p> <p>Since the PTAB&rsquo;s decision in this case was made by a panel of APJs who were not constitutionally appointed at the time of the decision, the Federal Circuit vacated and remanded the decision without reaching the merits of the case. The Federal Circuit held that on remand, to cure the constitutional error, a new panel of APJs must be designated and a new hearing granted. The new panel may proceed on the existing record or may exercise their discretion to reopen the record.</p> <p>The issues decided in this case are likely to be subject to further review, either through a rehearing in front of the Federal Circuit <i>en banc</i>, or if the Supreme Court grants certiorari. Either possibility might reverse this panel decision or change the remedy such that rehearing would not be granted. Assuming the decision stands, this case will have a significant impact on all pending appeals from proceedings at the PTAB, where the APJs on the panel were not subject to unfettered removal by a presidentially appointed officer. In these cases, the final written decisions will likely be vacated and remanded to be reviewed by a new panel of APJs. This will require considerable effort from the PTAB, significantly increasing its caseload for several months.</p> <p>The <i>Arthrex</i> decision does not settle whether appellants will be allowed to raise an Appointments Clause argument at the Federal Circuit after principal briefs have been filed. In two orders entered on November 1, 2019, the Federal Circuit in <a href=""><i>Customedia Technologies, LLC v. Dish Network Corp.</i></a> has already held that the Appointments Clause argument is waived if not argued in the opening appeal brief. Final decisions entered after this decision will likely not be affected, because the Federal Circuit appears to have &ldquo;fixed&rdquo; the unconstitutionality of APJ appointments by holding that the USPTO director can remove APJs at will. Fitch Even attorneys will continue to monitor developments related to this case.</p> <p>For more information on this case, please contact Fitch Even attorney <a href=";A=2585&amp;format=xml&amp;p=5482">David A. Gosse</a>, coauthor of this alert.</p> <p><i>--Fitch Even law clerk <a href=";A=19279&amp;format=xml&amp;p=5482">Zachary Van Engen</a> cowrote this alert.<br /> </i></p> <p><br /> <b>Fitch Even IP Alert</b><sup><b>&reg;</b></sup></p>IP Alerts04 Nov 2019 00:00:00 -0800 Alert: Federal Circuit Subjects "Consisting Essentially of" to an Indefiniteness Inquiry<p>On October 10, in <a href=""><i>HZNP Medicines LLC v. Actavis Laboratories UT, Inc.</i></a>, the Federal Circuit affirmed a district court holding that patent claims that include the transitional phrase &ldquo;consisting essentially of&rdquo; are indefinite where the &ldquo;basic and novel characteristics of the claimed invention&rdquo; were found to be indefinite. Secondarily, the court further addressed what qualifies as induced infringement for pharmaceutical products with instructions for use, holding that instructions that do not require each step in a patented method are not sufficient evidence of intent to induce infringement.</p> <p>Horizon (for whom HZNP Medicines was substituted as plaintiff-appellant during the pendency of the appeal) was the assignee of patents that claimed pharmaceutical formulations and methods of use for treating osteoarthritis.</p> <p>Horizon&rsquo;s pharmaceutical formulation patent claims used the transitional phrase &ldquo;consisting essentially of&rdquo; in specifying various components of the formulation. Claim 49 was illustrative:</p> <p style="margin-left: 40px;">49. A topical formulation consisting essentially of:</p> <p style="margin-left: 80px;">1&ndash;2% w/w diclofenac sodium;<br /> 40&ndash;50% w/w DMSO;<br /> 23&ndash;29% w/w ethanol;<br /> 10&ndash;12% w/w propylene glycol;<br /> hydroxypropyl cellulose; and<br /> water to make 100% w/w, wherein the topical formulation has a viscosity of 500&ndash;5000 centipoise.</p> <p>The transitional phrase &ldquo;consisting essentially of&rdquo; limits a claim to the listed components and those that do not materially affect the basic and novel characteristics of the claimed invention. But what are the &ldquo;basic and novel characteristics of the claimed invention&rdquo;?</p> <p>In this case, district court held that the specification of the formulation patents identified five basic and novel properties: (1) better drying time; (2) higher viscosity; (3) increased transdermal flux; (4) greater pharmacokinetic absorption; and (5) favorable stability. The district court then evaluated the identified basic and novel properties under the <i>Nautilus</i> definiteness standard, which invalidates a claim if, in light of the specification and prosecution history, it fails to inform, with reasonable certainty, those skilled in the art of the scope of the invention. Under this standard, the district court found the basic and novel property of &ldquo;better drying time&rdquo; to be indefinite. The court held that the two tests disclosed in the specification for evaluating &ldquo;better drying time&rdquo; did not provide consistent results at consistent times, and that the skilled artisan would not know under what standard to evaluate the drying rate. The district court then concluded that because one of the basic and novel properties was indefinite, the phrase &ldquo;consisting essentially of&rdquo; was indefinite, and held Horizon&rsquo;s formulation claims to be invalid for indefiniteness.</p> <p>This holding raises certain questions. The court based its conclusion regarding &ldquo;drying time&rdquo; on two sets of data in the specification that were found to be inconsistent. Had the patentee not included one of these data sets, or perhaps omitted the drying data altogether, the court&rsquo;s holding necessarily would have been different, and perhaps the claim would not have been held indefinite. There was no suggestion that there was any indefiniteness with reference to the identity of any of the components of the composition, for example, or to the other properties of the composition.</p> <p>Horizon appealed, arguing that the district court erred when it evaluated the basic and novel properties of the invention under the <i>Nautilus</i> definiteness standard. Horizon contended that the <i>Nautilus</i> definiteness standard focuses on the claims and, therefore, should not be applied to the basic and novel properties of the invention.</p> <p>The Federal Circuit disagreed and held that the phrase &ldquo;consisting essentially of&rdquo; incorporates the basic and novel characteristics of the claimed invention into the claim scope, and thus, those characteristics are properly part of the claim construction analysis and subjected to the definiteness requirement. The Federal Circuit affirmed the district court&rsquo;s finding that one of the basic and novel properties of the claimed formulation, &ldquo;better drying time,&rdquo; was indefinite and affirmed the district court&rsquo;s conclusion that, therefore, Horizon&rsquo;s use of &ldquo;consisting essentially of&rdquo; was indefinite.</p> <p>The Federal Circuit clarified that every use of &ldquo;consisting essentially of&rdquo; would not be indefinite per se. The court stated that an inventor or patent owner may use the transitional phrase &ldquo;consisting essentially of&rdquo; to leave a claim open to components that do not materially affect the basic and novel characteristics of the claimed invention, so long as those basic and novel characteristics meet the definiteness standard.</p> <p>Further, the Federal Circuit addressed whether a warning in Actavis&rsquo;s proposed label showed intent to induce a use of its product that would directly infringe Horizon&rsquo;s method-of-use claims.</p> <p>Horizon&rsquo;s patent claims were directed to methods of use for treating osteoarthritis. The claims included applying a first medication, waiting for the treated area to dry, and subsequently applying sunscreen or insect repellant. Claim 10 was illustrative:</p> <p style="margin-left: 40px;">10. A method for applying topical agents to a knee of a patient with pain, said method comprising:</p> <p style="margin-left: 80px;">applying a first medication consisting of a topical diclofenac preparation to an area of the knee of said patient to treat osteoarthritis of the knee of said patient, wherein the topical diclofenac preparation comprises a therapeutically effective amount of a diclofenac salt and 40&ndash;50% w/w dimethyl sulfoxide;</p> <p style="margin-left: 80px;">waiting for the treated area to dry;</p> <p style="margin-left: 80px;">subsequently applying a sunscreen, or an insect repellant to said treated area after said treated area is dry, wherein said step of applying a first medication does not enhance the systemic absorption of the subsequently applied sunscreen, or insect repellant; and</p> <p style="margin-left: 80px;">wherein said subsequent application occurs during a course of treatment of said patient with said topical diclofenac preparation.</p> <p>A finding of induced infringement requires evidence of active steps taken to encourage direct infringement. The only evidence of inducement presented was Actavis&rsquo;s label, which was substantially similar to Horizon&rsquo;s and included a warning to wait until the treated area is dry before applying sunscreen, insect repellant, lotion, moisturizer, cosmetics, or other topical medication.</p> <p>The district court held that Horizon&rsquo;s method-of-use claims required the application of a second topical agent. The district court further held that the warning to wait until the treated area is dry before applying other topical agents merely permitted, without encouraging, post-product application of such agents. The district court concluded that, therefore, Actavis did not induce infringement of Horizon&rsquo;s method-of-use claims.</p> <p>On appeal, Horizon argued that Actavis&rsquo;s label reflected Actavis&rsquo;s specific intent to induce infringement. Horizon contended that Actavis&rsquo;s label tracked closely with the asserted claims and that when a user would need to apply sunscreen or insect repellant, Actavis&rsquo;s instruction would lead to an infringing use. Horizon argued that, therefore, the district court erred in its finding that Actavis&rsquo;s label did not induce infringement of Horizon&rsquo;s method-of-use claims.</p> <p>The Federal Circuit disagreed, finding that a label that does not require all of the steps required by the claimed method does not encourage infringement. The Federal Circuit affirmed the district court&rsquo;s finding that Actavis&rsquo;s label merely permitted, rather than required or directed, the post-product application of sunscreen, insect repellant, or a second topical medication. The Federal Circuit further affirmed the district court&rsquo;s conclusion that Actavis did not induce infringement of Horizon&rsquo;s method-of-use claims.</p> <p>In her dissent, Judge Newman criticized the majority for departing from precedent regarding the construction of &ldquo;consisting essentially of&rdquo; and the interpretation of induced infringement. Judge Newman argued that the usage of &ldquo;consisting essentially of&rdquo; does not incorporate an evaluation of the basic and novel properties into the scope of the claims and emphasized that Actavis&rsquo;s formulation did not incorporate any component that was not included in Horizon&rsquo;s formulation claims. Regarding induced infringement, Judge Newman further argued that the fact that a user might not follow instructions does not insulate a provider from liability.</p> <p>This case may be particularly relevant to chemical patent applications. A patent applicant wishing to use the phrase &ldquo;consisting essentially of&rdquo; may want to take special care to define the basic and novel properties of the invention and how those basic and novel properties are evaluated. The applicant may want to consider identifying fewer basic and novel properties, and might also consider including only one method for evaluating each property so that a court cannot find inconsistencies among multiple methods.</p> <p>Further, a patent applicant seeking to claim a method of using a pharmaceutical product may want to consider claims that will match the instructions for use, and may also want to make sure that every step claimed will be required in the instructions for use.</p> <p>For those seeking to invalidate or argue noninfringement of existing patents, this case highlights potentially useful lines of argument. If the &ldquo;consisting essentially of&rdquo; transitional phrase is used, one may consider arguing that the basic and novel properties of the claimed invention are indefinite. Specifically, one might consider looking for inconsistencies or undefined terms in any data evaluating the basic and novel properties provided in the patent.</p> <p>Additionally, one seeking to avoid a finding of induced infringement for pharmaceutical products with instructions for use should take into account the impact of this decision.</p> <p>For more information on this case, please contact Fitch Even attorney <a href=";A=19216&amp;format=xml&amp;p=5482">Caroline A. Schneider</a>, author of this alert.<br /> &nbsp;</p> <p><b>Fitch Even IP Alert<sup>&reg;</sup></b></p>IP Alerts01 Nov 2019 00:00:00 -0800 Alert: PTAB Provides First Guidance Under Motion to Amend Pilot Program<p>On October 16, the Patent Trial and Appeal Board (PTAB) provided its first-ever preliminary guidance in response to a motion to amend filed under the <a href=";an=90051&amp;anc=180&amp;format=xml&amp;p=5486">new pilot program</a> that began in March 2019. Under that program, patent owners may request preliminary guidance from the PTAB in a motion to amend, which the PTAB is to provide after the petitioner files its opposition to the motion. This nonbinding guidance includes whether the motion meets formal requirements and whether the petitioner has established a reasonable likelihood that the substitute claims presented in the motion are unpatentable.</p> <p>Petitioner Mylan Pharmaceuticals Inc. filed a number of <i>inter partes</i> review (IPR) petitions challenging various Sanofi-Aventis patents covering Sanofi&rsquo;s Lantus<sup>&reg;</sup> insulin pen. In three of the instituted proceedings (one involving U.S. Patent No. 8,992,486 and two involving U.S. Patent No. 9,526,844), Sanofi sought preliminary guidance from the PTAB regarding proposed substitute claims.</p> <p>In its guidance, the PTAB found that Sanofi&rsquo;s motions to amend satisfied the relevant statutory and regulatory requirements in that the proposed substitute claims were reasonable in number, responded to the petitioner&rsquo;s unpatentability grounds, properly narrowed the scope of the claims, and did not add new matter. However, the PTAB ultimately found there was a reasonable likelihood that each of the proposed substitute claims were unpatentable over the combinations of prior art asserted by the petitioner in its opposition to the motions.</p> <p>Notably, in some instances the parties attempted to rely on arguments from the petition and the patent owner response with respect to prior art already of record in the proceeding. The PTAB repeatedly advised the parties that such incorporation of arguments by reference is not permitted, which should be noted by practitioners when preparing and responding to motions to amend.</p> <p>In addition, the PTAB acknowledged that Sanofi was without the opportunity to address new prior art references and an expert declaration filed by the petitioner in response to the motions to amend, which highlights a downside of the timing of the PTAB&rsquo;s preliminary guidance for patent owners. In response to the PTAB&rsquo;s nonbinding guidance, Sanofi will have an opportunity in each proceeding to file a revised motion to amend, file a reply with additional argument and evidence, or withdraw the motion to amend. However, if a revised motion to amend is filed, the PTAB will not provide further preliminary guidance.</p> <p>This guidance is particularly relevant to patent owners and their counsel who may wish to file a motion to amend in an AIA proceeding, as well as petitioners facing such motions. In addition to demonstrating the potential benefits (and drawbacks) of requesting preliminary guidance, patent owners may also use Sanofi&rsquo;s motions as examples of motions that satisfy the relevant statutory and regulatory requirements. However, practitioners should be careful to include all relevant arguments within their briefing, rather than referring to arguments already of record.<br /> <br /> For the full text of the guidance, please see <a href="/2E8FB4/assets/files/Documents/IPR2018-01679 Guidance.pdf">IPR2018-01679 Guidance</a>,&nbsp;<a href="/2E8FB4/assets/files/Documents/IPR2018-01682 Guidance.pdf">IPR2018-01682 Guidance</a>, and <a href="/2E8FB4/assets/files/Documents/IPR2018-01680 Guidance.pdf">IPR2018-01680 Guidance</a>. </p> <p>For more information on this program, please contact Fitch Even partner <a href=";A=2587&amp;format=xml&amp;p=5482">Paul B. Henkelmann</a>, author of this alert.&nbsp;</p> <p><i>Fitch Even associate </i><a href=";A=16703&amp;format=xml&amp;p=5482"><i>Evan Kline-Wedeen</i></a><i> contributed to this alert.</i>&nbsp;</p> <p><b><br /> Fitch Even IP Alert<sup>&reg;</sup></b>&nbsp;<br /> &nbsp;</p>IP Alerts29 Oct 2019 00:00:00 -0800 Even Partner Mark Hetzler Quoted in Law360 Article on Federal Circuit Affirming Manufacturing Method Claims as Patent-Ineligible<p>Fitch Even managing partner <a href=";A=2588&amp;format=xml&amp;p=5482">Mark W. Hetzler</a> was quoted in the October 18 issue of <i>Law360</i> in an article discussing the potential ramifications of the Federal Circuit&rsquo;s recent ruling in <i>American Axle &amp; Manufacturing, Inc. v. Neapco Holdings LLC </i>that a drive shaft patent is ineligible under 35 U.S.C. &sect; 101 because the claims covered an application of a natural law of science.</p> <p>In the article, &ldquo;Drive Shaft Ruling May Expand Challenges To Patent Eligibility,&rdquo; Mark notes, in part, that because many mechanical and electronic inventions could arguably be described as being directed to a law of nature, such as the law of gravity, he believes &ldquo;defense attorneys are going to pick up on this, and it would be wise if they did. There are so many laws of nature that now people are really going to start thinking hard about, what law does this claim implicate?&quot;</p> <p>The article can be read in its entirety on the <a href=";utm_source=newsletter&amp;utm_medium=email&amp;utm_campaign=ip"><i>Law360</i> website</a> (sub. req.).</p> <p>For more information on the <i>American Axle </i>ruling, please see the recent <a href=";an=97261&amp;anc=180&amp;format=xml&amp;p=5486">IP alert</a> written by Mark with associate Donald R. Bunton.</p>Professional Activities28 Oct 2019 00:00:00 -0800 Soup: A Review and Summary of Post-Grant Practice at the USPTO<p>Please join Fitch Even for a free webinar, &ldquo;<a href="">Alphabet Soup: A Review and Summary of Post-Grant Practice at the USPTO</a>,&rdquo; on November 21, 2019, at 9:00 am PST / 10:00 am MST / 11:00 am CST / 12 noon EST.</p> <p>After a U.S. patent issues, many procedures are available to correct the patent, challenge its validity, and even change its scope. These include a bewildering array of procedures sprinkled with Latin phrases and confusing acronyms. The America Invents Act, passed in 2011, changed the face of post-grant practice at the U.S. Patent and Trademark Office. As the procedures presented in that bill have matured, keeping up with ever-evolving policies and practices has been a challenge even for highly engaged practitioners. This webinar will provide a summary of post-grant procedures and an introduction to when, why, and how each procedure is useful (or not) to patent owners and third parties.</p> <p>During the webinar, we will cover these topics and more:</p> <ul> <li>Review of post-grant procedures at the USPTO including <i>inter partes</i> review (IPR), post-grant review (PGR), covered business method review (CBM), supplemental examination, <i>ex parte</i> reexamination, and reissue applications</li> <li>Strategic purposes of the various post-grant procedures</li> <li>Tactics for petitioners and patent owners in USPTO trial proceedings</li> </ul> <p>Our speaker will be Fitch Even partner <a href=";A=2585&amp;format=xml&amp;p=5482">David A. Gosse</a>. Dave has a diverse IP law practice encompassing both the acquisition and the enforcement of patent rights in the electronic, software, and mechanical fields, beginning with patent drafting and prosecution and extending to post-issuance proceedings before the PTAB as appropriate. He has substantial pre-trial and trial experience in district court litigation, including multiple jury trials relating to patent infringement, validity, and breach of license.<br /> <br /> A recording of this webinar is available through November 20, 2020.</p>Past Webinars25 Oct 2019 00:00:00 -0800 Alert: Federal Circuit Issues Significant Decision on Licensing Rights<p>On October 17, in <a href=""><i>Fraunhofer-Gesellschaft zur F&ouml;rderung der angewandten Forschung e.V. v. Sirius XM Radio Inc</i>.</a>, the Federal Circuit issued a noteworthy opinion affecting the rights of sublicensees to patent licenses. Although some aspects of the case arose from federal bankruptcy law, the court&rsquo;s guidance appears to be applicable to patent licenses more generally, so the case may be relevant to others who are or will be parties to a patent license.</p> <p>In March 1998, plaintiff Fraunhofer granted an exclusive license to WorldSpace International Network, a third party, under certain patents. Later that year, WorldSpace granted a sublicense to Sirius, and in 1999 the agreement was amended to make the sublicense &ldquo;irrevocable.&rdquo;</p> <p>WorldSpace declared bankruptcy in 2008. A bankruptcy trustee may accept or reject contracts in bankruptcy, and in this case the trustee rejected the license agreement with Fraunhofer. Under bankruptcy law, the rejection of the license was tantamount to a breach of the license agreement occurring immediately before the filing of bankruptcy. This breach gave Fraunhofer the right to terminate its license with WorldSpace, but Fraunhofer did not immediately do so, nor did it terminate the sublicense with Sirius.</p> <p>In October 2015, Fraunhofer wrote to Sirius to assert infringement of four of its patents. The following month, Fraunhofer sent WorldSpace a letter purporting to terminate the license.</p> <p>In February 2017, Fraunhofer sued Sirius for patent infringement in district court, arguing its sublicense was tied to the master agreement with WorldSpace, and that master agreement had terminated. Sirius moved to dismiss, arguing that because its sublicense from WorldSpace was intact, Sirius was licensed under the asserted patents. The district court agreed and granted Sirius&rsquo;s motion to dismiss, and Fraunhofer appealed.</p> <p>On appeal, the Federal Circuit reversed and remanded, stating that factual issues precluded the district court from granting the motion to dismiss. The court first concluded that it was unclear whether Fraunhofer had in fact terminated the license. More significantly, the court observed that even if Fraunhofer had successfully terminated the license, the license was ambiguous as to whether the sublicensee&rsquo;s rights remained intact despite the termination. The court noted that Federal Circuit law &ldquo;does not provide for automatic survival of a sublicense,&rdquo; and observed that whether a sublicensee&rsquo;s rights survived must be determined on a case-by-case basis. For instance, the court suggested, a sublicensee who stands as a bona fide purchaser of the sublicense might retain rights even after termination of the master license. With regard to Sirius, the court concluded that the irrevocable nature of the sublicense might survive termination of the master license: &ldquo;Under such circumstances the sublicensor, at the time of the grant of the sublicense, would not be conveying more to the sublicensee than it had received from the master licensor.&rdquo;</p> <p>Ultimately, the court concluded, &ldquo;the survival of the sublicensee&rsquo;s rights depends on the interpretation of the Master Agreement.&rdquo; Although the agreement at issue here was ambiguous in this regard, the court expressed confidence that &ldquo;in the future, parties to license contracts will resolve this issue by including contract language specifically addressing the survival of sublicense rights.&rdquo; Because the license in question <i>was </i>ambiguous, the court remanded with instructions to the district court to consider extrinsic evidence.</p> <p>The guidance from the Federal Circuit on inclusion of sublicensee provisions on termination is explicit and should be considered by both licensors and licensees when drafting patent license agreements. Licenses can terminate in ways other than bankruptcy, so the court&rsquo;s guidance appears applicable outside the bankruptcy context. For more information, or with questions on any existing patent licenses in this regard, please contact Fitch Even partner <a href=";A=2589&amp;format=xml&amp;p=5482">Allen E. Hoover</a>, author of this alert.<br /> &nbsp;</p> <p><b>Fitch Even IP Alert<sup>&reg;</sup></b></p>IP Alerts21 Oct 2019 00:00:00 -0800