Defendants appeal from the orders of Judge Patel finding their patent, 6,831,287 unenforceable due to inequitable conduct before the PTO and then sanctioning them under § 285 and inherent powers.  The ‘287 patent relates to a dual sensor design for vapor deposition processing of silicon wafers.

Applied develops machines and systems for manufacturing semiconductor wafers and, in 2001, worked with Multimetrixs on an improved sensor and position system for the shutter disks used in its physical vapor deposition process.

Three engineers from Multimetrixs ultimately filed the patent application that became the ‘287 patent.  Applied recently filed suit to correct inventorship under 35 U.S.C. § 256, and Multimetrixs counterclaimed for infringement.

During the bench trial on inventorship, Applied elicited testimony from one of the Multimetrixs’ inventors that a signature of the third named inventor had twice been forged in documents submitted to the PTO.  Indeed, this third inventor had died in 2002, yet “signed” submissions to the PTO in 2003 and 2004.

Based on this testimony the court sua sponte raised the issue of inequitable conduct.  After briefing and additional argument, the court found the patent unenforceable.  In its order, the court first found that an inventor’s signature is material, rejecting defendants’ argument that the forgery of a deceased co-inventor is immaterial because they could have proceeded anyway (see, e.g., MPEP Appendix R, § 1.42 ):

Likewise, in this case, the issue is not whether the surviving inventors could have successfully prosecuted the patent without resort to forging the deceased inventor’s signature. The availability of valid alternatives is not the issue. The issue is whether what the surviving inventors in fact chose to do was inequitable conduct. David Margulis died in 2002 and his signatures on both the 2003 and 2004 documents were forgeries. The court concludes that there is clear and convincing evidence of the submission of materially false information that a reasonable examiner would substantially likely consider relevant and important.

Inequitable Conduct Order, p. 9.

The court also found clear and convincing evidence of deceptive intent, based mostly on the remaining inventors’ testimony and litigation tactics.  The each tried to testify that the third inventor died in 2004 and, according to court, repeatedly tried to hide the forgeries.  Once confronted with the truth, they offered no explanation for the forgeries:

Other than ex post rationalization based on that fact that the surviving inventors could have pursued other valid alternatives, the defendant has offered no explanation for why David Margulis’ signature appeared on documents submitted to the PTO in 2003 and again in 2004, when in fact he died in 2002. Even after the forgeries were revealed at trial, Multimetrixs and its witnesses offered no explanation or excuse for their conduct. Nor has Multimetrixs explained how its witnesses provided the same parallel but false testimony about the (incorrect) date of Margulis’ death. Based on the evidence presented at trial, the court finds clear and convincing evidence that the surviving inventors intentionally submitted documents to the PTO knowing that David Margulis was dead and knowing that his signature was forged. The court concludes that the forged documents were submitted with intent to deceive the PTO.

Inequitable Conduct Order, p. 12-13.

After finding the patent unenforceable and some more maneuvering (including Multimetrixs filing for bankruptcy), the court also found the case exceptional and award fees and costs against Multimetrixs.

Sanctions: Up to this point, the co-inventors were not named defendants to the case, but Applied sought and obtained leave under Fed. R. Civ. P. 15 to amend its complaint and add them.  It then asked for an exceptional case finding and award of fees against the individuals, which the court granted to the tune of about $1.4 million.

Most of the individual defendants’ arguments at this point are based on being sanctioned for litigation conduct that occurred when they were not actually parties to the case.  The court was unpersuaded, finding that they were afforded notice and opportunity to defend against the § 285 claim.  Also, the court found that these individuals controlled Multimetrixs and were therefor responsible for its litigation conduct.

PATracer Note: Multimetrixs’ counsel sought to withdraw (an a sealed motion) after the bench trial, which the court ultimately allowed:

Pursuant to California Rule of Professional Conduct 3-700(C)(1)(c) and (d), an attorney may request permission to withdraw if the client insists that the attorney pursue a course of conduct that is illegal or that is prohibited under the rules of professional conduct, or if the client by his conduct renders it unreasonably difficult for the member to carry out the employment effectively.

California law imposes a duty of candor on all attorneys. Bus. & Prof. Code § 6068; Rule of Professional Conduct 5-200(B). “Counsel should not forget that they are officers of the court, and while it is their duty to protect and defend the interests of their clients, the obligation is equally imperative to aid the court in avoiding error and in determining the cause in accordance with justice and the established rules of practice.” Datig v. Dove Books, Inc., 73 Cal. App .4th 964, 980 (1999). Given the conduct of defendants during the course of trial, the court recognizes the existence of conflicts which may make it impossible or unreasonably difficult for defense counsel to continue representation. Accordingly, the request of defense counsel to withdraw is GRANTED.

Inequitable Conduct Order, p. 14.

2010-1149 Inequitable Conduct Order

2010-1149 Exception Order

2008-1392 Trading Tech Int'l v. eSpeed

Summary of Argument from plaintiff Trading Technologies
International, Inc.  Paul H. Berghoff, Leif R. Sigmond,
Jr., Matthew J. Sampson, Michael D. Gannon, S. Richard
Carden, Jennifer M. Kurcz and Paul A. Kafadar of McDonnell
Boehnen, Hulbert & Berghoff LLP, Chicago; and Steven F.
Borsand of Trading Technologies International, Inc., on brief.

The heart of the dispute is the meaning of the claim term
“static.” This term is explicitly and unambiguously defined in the patent
specification as:

The values in the price column are static; that is, they do
not normally change positions unless a re-centering command is received …

Instead of simply adopting this clear definition, the court
erred by construing “static” much more narrowly by requiring that the values in
the price column:

never change positions [which the court interpreted as
precluding “any movement”] unless by manual re-centering or
repositioning.

There is no support in any of the intrinsic evidence (or
extrinsic evidence for that matter) for such a narrow reading of static. As
such, this Court should vacate the district court's construction and adopt the
definition set forth in the patent.

The court also erred in ruling that Dual Dynamic and
eSpeedometer do not literally infringe. This ruling was based solely on the
court's improper construction of “static.” Under its construction, any product
that has a risk of automatic re-centering (which cannot be turned off) does not
literally infringe the patents-in-suit. However, the proper construction of
static is not limited to any particular type of re-centering and thus
encompasses both manual and automatic re-centering. Therefore, these products
literally infringe the patents-in-suit.

Furthermore, the court improperly barred TT from asserting
DOE against eSpeedometer¹⁷ by ruling that “static” was narrowed by
amendment during prosecution.¹⁸ However, to reach this conclusion the
court did not apply its narrow construction of “static” that it used to find no
literal infringement. Rather, the court construed “static” broadly for purposes
of its estoppel analysis – in conflict with its Markman ruling. This
was error because once a claim term is construed, that same construction must
be applied uniformly. Under the court's unduly narrow construction, there can
be no narrowing amendment and thus no estoppel.

¹⁷ The court found that eSpeedometer infringed the
“static” claim term under DOE, even under its unduly narrow construction of
that term.

¹⁸ All of TT's DOE arguments are moot if this Court adopts TT's
construction and finds literal infringement.

Moreover, the court improperly barred TT from asserting DOE
against Dual Dynamic, ruling that doing so would vitiate the “static” claim
term. Vitiation is not applicable because there is only a subtle difference of
degree between the “static” claim element, as narrowly construed by the
district court, and the operation of the price axis in Dual Dynamic. Thus, TT
should not be barred from asserting DOE against Dual Dynamic.



Finally, the
court erred by entering JMOL overturning the jury's verdict of willful
infringement. The court did not and could not challenge the jury's finding that
eSpeed knew or should have known that its product was infringing a valid
patent. The court's ruling was based solely on its mistaken belief that there
was no evidence that eSpeed sold its infringing products after the
patents-in-suit issued. In fact, there is substantial undisputed evidence in
the record that eSpeed continued selling its infringing product after the
patents issued and that it had the ability to pull off the market existing
infringing product. Accordingly, the JMOL ruling should be reversed.

TT states that it “commercialized the invention in a product
called MD Trader, and began selling it around Labor Day of 2000 as part of TT's
X_Trader software suite.” (TT-Br.8) In fact, however, TT first commercialized
the invention of the Patents-in-Suit much earlier, selling custom software
embodying it to Brumfield, then one of the world's busiest futures traders, who
used it in his proprietary trading and kept it as the “toppest of toppest of
secrets that you can imagine,” until, after investing millions of dollars in
TT, he concluded that there might be bigger rewards in going the “patent
route.”



Brumfield and TT's decision to exploit the invention as a trade secret
until it became more financially advantageous to enter the patent system has
critical implications for the validity and enforceability of the
Patents-in-Suit.



First, more than one year passed between TT's commercial sale
of the custom software embodying the invention to Brumfield and its filing of
the Provisional on March 2, 2000, and the sale is therefore a §102(b) bar.



Second,
TT has stipulated that the Patents-in-Suit are invalid due to Brumfield's
intervening public use if they are not afforded the benefit of the Provisional
filing date. Every Asserted Claim includes the limitation “single action of a
user input device,” a term that does not appear and is not defined in the
Provisional. The court construed it broadly, paraphrasing an ad hoc definition
that was first set forth in the Non-Provisional expressly “for the purposes of
the present invention.” This broad construction -“an action by a user within a
short period of time that may comprise one or more clicks of a mouse button or
other input device” is not supported by the narrow disclosure of single mouse
click order entry in the Provisional and therefore, as TT stipulated,
Brumfield's pre-June 9, 1999 commercial use is also a §102(b) bar.



And
just as TT makes no mention of the existence, sale and use of Brumfield's
custom software in its brief, so too did TT fail to disclose this information
to the PTO during prosecution of the Patents-in-Suit. This information would
have been highly material, as it would have prompted the PTO to
consider in the first instance the on-sale and priority date issues now on
appeal. The district court, however, found that this information was not
material at all, and it did not go on to consider abundant evidence that its
nondisclosure was deliberately deceptive.



The “single action of a user input
device” limitation is also, as construed, indefinite, as it has no clear
meaning to a person of ordinary skill in the art, but rather depends upon the
subjective “perception” of each individual user.



Accordingly, this Court
should reverse, mandate the entry of judgment declaring the Asserted Claims
invalid, and remand for further proceedings on inequitable conduct.

2009-1014, -1038 Advanced Cardiovascular v. Medtronic

Both sides appeal from the verdicts, orders and judgment from Judge Sue Robinson's court finding that Medtronic infringes the so-called Lau patents (including 6,432,133), there was no inequitable conduct in procuring the Lau patents, but also declining to enter a permanent injunction.  The case involved various expandable, bare-metal stents.

This case has had a little bit of everything, including two previous trips to the CAFC, party realignment, and an arbitration.  But hey, its only been pending 10.5 years.

Medtronic, the original plaintiff, sued defendants claiming infringement of various stent patents and asserting some state law claims.  Defendants counterclaimed, asserting the Lau patents against Medtronic.  The court granted summary judgment of non-infringement to defendants, a finding affirmed on appeal (2005-1280).  The parties were then re-alligned for trial of the Lau patents.

A jury trial in 2005 found that Medtronic infringed the Lau patents, which were also found valid.  A 2005 bench trial addressed Medtronic's inequitable conduct claim, that certain prior art references were not disclosed.  In 2007 the court denied Medtronic's post-trial motions and found no inequitable conduct.  An arbitration was then conducted regarding whether Medtronic had a license with respect to one of its products, with the arbitrator concluding that it did not.

Medtronic tried to appeal before (2007-1365), but it was dismissed as premature pending determination of Abbott's request for a permanent injunction—which the court just denied.

Injunction

In denying the injunction, the court found that monetary damages would suffice and that Abbott had not shown irreparable harm.  On the former, the court noted that Abbott had been willing to license others in the same market, thus showing a willingness "to forego its exclusive rights for some manner of compensation." 

The court also noted that, despite ACS (Advanced Cardiovascular System, now part of Abbott) losing significant market share after Medtronic entered the fray, other competitors clouded the issue and it "could not identify any specific customers it had lost, or stands to lose, directly as a result of Medtronic's continued sales of infringing stents."

The court further relied on the public's strong interest in maintaining a diversity of stents and on some doctor's preference for Medtronic's stents versus ACS's.

More reading:

Counsel:

Abbott: Richard Layton & Finger (Wilmington, DE); Finnegan Henderson Farabow Garrett & Dunner (DC).

Medtronic: Morris, Nichols, Arsht & Tunnell (Wilmington, DE); McDermott Will & Emory (DC; Irvin, CA)

2008-1314 Takeda Pharma v. Teva Pharma

An inequitable conduct case regarding the inventors' failure to disclose certain test results during prosecution of 4,628,098.  The district court found the patent enforceable.  The '098 patent covers lansoprazole, marketed by plaintiffs as Prevacid® for gastric ulcers.  The case was previously covered here.

Oral argument is scheduled for Wednesday, November 5, 2008 at 10:00 A.M., San Jose Federal Court.

Summary of the Argument from Teva.  John L. North, Jeffrey J. Toney, Jeffrey D. Blake, Darcy L. Jones, David A. Reed of Sutherland LLP (Atlanta) on brief.

Summary of the Argument from Takeda and TAP.  Eric J. Lobenfeld, Philippe Y. Riesen, Arlene L. Chow, Tedd W. Van Buskirk, Dillon Kim, Hogan & Hartson LLP (New York) and William F. Cavanaugh, Jr., Stuart E. Pollack, Chad J. Peterman, Melissa Mandrgoc, Patterson, Belknap, Webb & Tyler LLP (New York) on brief.

2008-1539 Advanced Magnetic v. Romag Fasteners

Plaintiff AMC appeals from the order of Judge Paul Crotty finding the case exceptional under § 285 and awarding attorney’s fees, and ruling AMC’s 5,572,773 patent unenforceable due to inequitable conduct.  The court also found litigation misconduct and AMC’s counsel jointly responsible for the attorney’s fees under § 1927.  During the earlier jury trial, the court granted Romag judgment as a matter of law upon the close of AMC’s case.

The case related to magnetic snap fasteners like the type commonly used in the fashion industry to secure the flap on handbags and purses.

First, the court addressed whether it had jurisdiction to hear the inequitable conduct claims after Romag had, upon getting the JMOL, agreed to dismiss its counterclaims, including that for inequitable conduct.  The court determined that it did have jurisdiction–not only did Romag "reserve" these arguments for its fees motion, but the court found inherent power to consider Romag’s claims as part of the "totality of the circumstances" implicated by a § 285 request.

As for the inequitable conduct, the court reviewed the testimony and found the patent invalid for misidentification of inventorship.

The named inventor, Irving Bauer, is also the president and owner of plaintiff AMC.  The owner of an oil burner (boiler) installation and repair business, Bauer was approached by an acquaintance to purchase 4,021,891 and 4,453,294, then the industry standards covering purse snaps.  Unfortunately for Bauer, shortly after his purchase the industry announced a design around re: the ‘294, rendering the patents nearly worthless.  Bauer, however, came up with the application for the ‘773, a patent which would cover the industry once again.

One problem–Bauer was not the inventor (according to the court), but rather a Robert Riceman.  Riceman claimed to have an earlier conception for the alleged industry design-around but, because of contractual obligations, his inventions would accrue to a third party and not to Bauer or Riceman.  According to the court, Bauer claimed inventorship to protect his investment in the ‘294 and his plans to control the purse snap industry.  Simply put, the court found Bauer’s claim to inventorship impossible to believe.  Among the court’s many relevant paragraphs:

The Court found Bauer’s testimony regarding his purported invention completely incredible. At no point in Bauer’s rambling, often-incoherent testimony did he offer any scientific or technical explanation for the claimed increase in magnetic attraction caused by the hollow post. Nor did he present any evidence to substantiate this claim. See infra Discussion Part I.C.2. The Court refuses to believe that Bauer, lacking any training or experience in the field, and equipped only with curiosity and pluck, was able to successfully design around the industry standard ‘294 Patent. His testimony bore clear indicia of fabrication. While voluble—if not responsive—on direct, he was evasive and argumentative on cross examination. The Court is convinced beyond a shadow of a doubt that Bauer could not be the inventor of the ‘773 snap.

With the patent now invalid, the court turned to litigation misconduct and focused its gaze on AMC’s trial counsel.  AMC had retained a Dr. Dev Ratman as an infringement expert, and his reports duly opined that Romag’s snaps had, as claimed, holes int he rivets that cause an increase in magnetic attraction.  He based this on a finite element analysis.

Unfortunately, Dr. Ratman had hired another person (Bell) to perform the analysis.  Despite Rule 26 and specific discovery requests, AMC never disclosed Bell nor his test results to Romag.  The matter came to light during Dr. Ratman’s deposition shortly before trial.

More unfortunate is the fact that Bell’s tests showed that the accused snaps did not infringe.

The court found that the failure to timely acknowledge and produce the Bell tests needlessly prolonged the litigation and constituted litigation misconduct.  Further, the court found that AMC pursued its infringement claim to trial despite no evidence of infringement–yet another example of misconduct.  Because AMC’s counsel were involved in this misconduct, they were found to be joint and severally liable.

More reading:

Order

2008-1511-1514 Therasense v. Becton, Dickson

Plaintiffs Therasense and Abbott appeal from the judgment of Judge William Alsup finding in favor of defendants that (i) claims 1-4 of 5,820,551 (co-owned by Abbott and Therasense) are invalid as obvious and (ii) the ‘551 is unenforceable by reason of inequitable conduct.

The ‘551 is generally directed to an electrochemical sensor for measuring the amount of glucose in a sample of blood.  It was in prosecution for over 14 years and, on 12 occassions, had claims rejected based on U.S. Patent 4,545,382 and its European counterpart (the ‘636)–patents which included some of the same inventors from the ‘551.

To overcome the repeated rejections from the PTO based on the ‘382 and ‘636 patents, one of Abbott’s patent counsel:

struck upon a new point of possible novelty previously overlooked in the pending prosecution. The new point was that the specification disclosed a sensor for use in whole blood without any protective membrane. Trouble was, a passage in the earlier ’382 patent already seemed to disclose membraneless sensors. That passage read (col. 4:63–66):

Optionally, but preferably when being used on live blood, a protective membrane surrounds both the enzyme and the mediator layers, permeable to water and glucose molecules.

To address this problem, Abbott decided to assert, as a matter of extrinsic fact, that in 1983 skilled artisans would have believed that a membrane was essential even in the face of the ’382 disclosure, i.e., they would not have taken the quoted sentence literally.

Abbott proceeded to submit inventor declarations and other material to the PTO, and eventually secured an allowance.

The court reviewed the prosecution history of all of the patents, and concluded that the representations made by Abbott regarding the ‘551 were intentionally inconsistent with those made to the EPO regarding the ‘636:

The court found the statements were plainly material to the prosecution, and also found an intent to deceive.  Abbott’s prosecuting attorney was permitted to appear at trial and testified, but the court found that he "did not prove to be a convincing witness," describing his explanations as "not plausible" and "not credible."

When, for example, Attorney Pope was shown the EPO appeal language quoting the sentence in question and immediately stating that “[i]t is submitted that this disclosure is unequivocally clear,” he testified that he had understood the “unequivocally clear” characterization to refer only to the last six words of the 26-word sentence — that is, to the concluding phrase “permeable to water and glucose molecules” and not to its other twenty words. Sadly, this order must find that Attorney Pope had no plausible reason for consciously withholding the EPO submissions and that he acted with specific intent to deceive Examiner Shay and the PTO. In making this finding, this Court has taken into account the demeanor of Attorney Pope during his trial testimony.

Attorney Pope testified that his motive was to obtain a strong patent. Therefore, he said he had no motive to conceal and to thus undermine the enforceability of the patent. This argument conveniently overlooks the fact that he consciously chose to withhold. Counsel who steer a course toward obtaining a strong patent should err on the side of disclosure, not nondisclosure. And, it must be said, after so many rejections over so many years, it seems clear that Abbott’s primary goal was to eke out some claim, saving a fight over enforceability for a later day.

Attorney Pope also said that patent prosecutors often write specifications broadly so as to support broad claims, cutting back on their claims as they go along as necessary to avoid the prior art or as is otherwise necessary. Being aware of this alleged practice, he testified that he, therefore, read “optionally, but preferably” as an overblown way for a prior patent prosecutor to have said “optionally, but always.” This is unconvincing. First, there is no authority for this secret-code theory. Words are supposed to mean what they say. Otherwise, our patent-disclosure system would collapse. Second, since the claims of the ’382 covered membraneless sensors used in blood, as both sides agree, the specification must have been sufficient to support the membraneless sensors.

As a result, the court concluded that the ‘382 invalidated claims 1-4, and that the omissions and misrepresentations during prosecution of the ‘551 rendered the patent unenforceable.

More reading:

Findings and Conclusions

2008-1494 UniRAM Technology v. Taiwan Semiconductor

Taiwan Semiconductor Manufacturing Co. (TSMC) appeals from the orders and judgment of Judge Vaughn Walker affirming the jury’s $30+ million verdict that it stole trade secrets from UniRAM and that certain UniRAM patents are not unenforceable. 

The patent infringement claims by UniRAM were dismissed with prejudice earlier in the case after UniRAM settled with defendant MoSys and included a release that covered TSMC.

Inequitable Conduct

Judge Walker found and concluded that there was no inequitable conduct in prosecution of UniRAM’s 6,108,229 patent (and a continuation) directed to a design for dynamic random access memory (DRAM).  TSCM argued that the patent contained  statements that an actual DRAM chip had been produced when, in fact, the inventor had only a tape-out file and simulation results.  The challenged statements include:

Our results show that a memory of the present invention is faster than an SRAM of the same memory capacity.

and

Although the bit line structure in FIG. 3b is the actual bit line structure used in our product, for simplicity, we will use the simpler two-dimensional bit line structure in FIG. 3a as example in the following discussions.

and

A memory device of the present invention is under production. Using 0.6 micron technology to build a memory array containing one million memory cells, we are able to achieve 4 ns access time, which is more than 10 times faster then existing memories devices of the same storage capacity.

The court found that the audience of the patent is a circuit designer, the subject matter was circuit design, and a person of ordinary skill in the art is a circuit designer–and based on the experts’ testimony, it was clear that circuit designers would understand the accused statements as referring to tape-outs and simulation performance rather than meaning that an actual chip had been manufactured.  In other words, the "product" for chip designers is the design and related IP and not the physical chip itself. 

The court also found that chip designers would recognize that the absence in the patent of any "chip photomicrographs" meant that no actual chip had been fabricated.

With respect to the testimony of the competing experts, the court repeatedly found UniRAM’s expert more compelling and believable.  The court explained why:

17. TSMC’s expert on how one of ordinary skill would interpret certain of Shau’s patent statements, Mr David Taylor, is less qualified than Dr Sechen. Mr Taylor lacks a PhD, is not a fellow in the IEEE and lacks the teaching and research experience of Dr Sechen. Ex 5291.

18. Mr Taylor, unlike Dr Sechen, cited no documents in either his expert report or his trial testimony to corroborate his opinions. Doc #621 152:3-20.

19. Dr Sechen consistently offered opinions that were more specific and complete than the answers given by Mr Taylor. Dr Sechen’s opinions were supported by reference to objective standards in the industry, such as terms of art. Mr Taylor, by contrast, relied more often on his view of common sense and his personal interpretations of disputed phrases. Dr Sechen explained his interpretations of disputed terms in greater detail, usually by a more thorough consideration of the context in which the term appears.

Also, the court considered a few other factors.  One is that the inventor’s native language is Mandarin Chinese and, though his English imperfect, he wrote his own patent application.  The court stated, "using imprecise terms [in a patent application] does not provide clear and convincing evidence of a misstatement." 

Another factor was TSCM’s decision to continue to pursue the inequitable conduct counterclaim even after the court found it clearly deficient at the summary judgment stage and after UniRAM had released and dismissed with prejudice the patent claims.  Indeed, the court found that TSCM’s conduct made the case "exceptional," but declined to award UniRAM its attorney’s fees because it is an "extraordinary sanction, and the Federal Circuit has not developed detailed criteria for such awards in the context of inequitable conduct claims."

Trade Secrets 

Judge Walker denied TSCM’s JMOL on the trade secret verdict without opinion.  The gist of TSCM’s argument was that there was insufficient evidence to show that UniRAM actually communicated trade secrets to TSCM or that TSCM used or communicated those trade secrets to others.  UniRAM had given tape-outs to TSCM for manufacturing, and claimed that TSCM (despite a non-disclosure) had shared those tapeouts with Mosys.  The trial and trade secret case is discussed more fully at the Trade Secret Blog.

More reading:

Findings and Conclusion on Unenforceability
JMOL on Trade Secret Verdict

Counsel:

UniRAM: Susman Godfrey LLP
(Ian B. Crosby, Justin A. Nelson, Max Lalon Tribble, Jr., David Humberto Orozco, John McMakin Neukom, Joseph S. Grinstein, Victoria C. Capitaine) Heim, Payne & Chorush, L.L.P. (Russell A. Chorush, Michael F. Heim) and Robert Morris Tuttle. 
 
 

TSCM: Weil Gotshal & Manges (Matthew Douglas Powers, Brandon D. Conard, Edward Robert Reines, Jason D. Kipnis, Paul Tsutomu Ehrlich).

Aventis has appealed from Judge Pfaelzer’s Order granting Hospira’s motion for judgment on the pleadings and dismissing Aventis’s infringement claim with prejudice based on collateral estoppel. 

Aventis owns U.S. Patent No. 5,389,618 claiming enoxaparin sodium sold under the brand name LOVENOX®.  Enoxaparin sodium is
used for the treatment and prevention of deep vein thrombosis.

The ‘618 patent is no stranger to litigation.  In 2003 and 2004,
Aventis sued Amphastar and Teva for infringement of the ‘618 patent
after each had filed ANDAs for enoxaparin sodium products.  In 2005,
the Central District of California granted summary judgment in
Amphastar’s case, finding the ‘618 patent unenforceable for inequitable
conduct–the Court held that Aventis and its agent failed to disclose
material information to the PTO.  While the Federal Circuit agreed that
Aventis had failed to disclose material information, it remanded the
case for trial on the issue of "Aventis’s intent to deceive the PTO.  In 2007, after a four-day bench trial, the Central District of California again found the ‘618 patent unenforceable.  Aventis Pharma S.A. v. Amphastar Pharmaceuticals, Inc. 475 F. Supp. 2d 970, 994 (C.D. Cal. 2007).   

While an appeal of that decision was pending, Hospira filed ANDAs for enoxaparin sodium products and sent the required notice to Aventis, triggering the 45-day clock for Aventis to file an action.  On the last day of that window, Aventis filed the instant infringement action. Citing the Court’s earlier unenforceability decision, Hospira moved for judgment on the pleadings under Rule 12(c).

The gist of Hospira’s motion was simple:  Aventis’s claims are barred under collateral estoppel because the Court already determined that the ‘618 patent was unenforceable.  As Hospira argued, Aventis simply filed its infringement action to "game the system"–it knew that the filing would trigger a 30-month stay of Hospira’s ANDA approval. 

Aventis, however, never hid this fact.  It not only acknowledged the prior ruling in its Complaint, but it offered to waive the 30-month stay if the ANDA was approved before the Federal Circuit decided Aventis’s appeal.  Aventis even admitted that it filed suit to "preserve" its rights. 

The end result was a "damned if you do, damned if you don’t" scenario under Hatch-Waxman.  Aventis argued that staying the action was prudent because dismissal would terminate its Hatch-Waxman rights–for good–even if the Federal Circuit ultimately overturned the adverse inequitable conduct ruling.  At that point, Aventis’s  only recourse against Hospira would have been a preliminary injunction.  Hospira countered that anything short of dismissal with prejudice–including Aventis’s requested stay–was "functionally equivalent" to a preliminary injunction.  And because the Hatch-Waxman Act does not provide for a private waiver of the statutory stay, Aventis’s waiver offer was useless. 

Ultimately, the Court asked the parties to wait it out.  While the Court never formally  issued a stay order, judgment was reserved until the Federal Circuit ruled–and it ruled against Aventis.  Upon receiving the Federal Circuit’s opinion, the Court indicated that it would grant Hospira’s motion.  Aventis sought a writ of mandamus to stay judgment pending Aventis’s motion for rehearing en banc.  While the Federal Circuit issued a temporary stay order, it ultimately denied Aventis’s requested writ.  Aventis asked  Judge Pfaelzer for a stay one last time, but the Court granted Hospira’s motion and entered judgment dismissing Aventis’s case with prejudice.   

Notes:

• In addition to appealing Judge Pfaelzer’s Order dismissing the case with prejudice, Aventis is still pursuing its motion for rehearing–and receiving a bit of amicus support. 

• Coverage of the underlying Amphastar can be found at the Orange Book Blog.

• While not shelved for 30 months, Hospira’s ANDAs were stayed over six months because of the lawsuit.

More Reading:

Hospira’s Brief In Support Of Judgment On The Pleadings

Aventis’s Brief In Opposition

Hospira’s Reply Brief

Counsel:

For Hospira: Winston & Strawn, Los Angeles (Gail J. Standish and Daniel Whang), Chicago (James F. Hurst and Kathleen B. Barry), and Washington (Charles B. Klein)

For Aventis:  Finnegan, Henderson, Farabow, Garrett & Dunner, Washington (Donald R. Dunner and Allen M. Skoal) and Atlanta (Robert C. Stanley); Morris, Polich & Purdy, Los Angeles (Daniel L. Ridge and Megas S. Wynne)
 

2008-1480 AstraZeneca v. Teva

Teva appeals from Judge Joel Pisano’s grant of summary judgment in favor of Astra on Teva’s claim of inequitable conduct in the prosecution of 4,879,288, which covers the antipsychotic drug quetiapine, marketed by Astra a SEROQUEL®.  Teva had filed an ANDA seeking to sell a generic, 25 mg version of Seroquel.  Teva apparently had dropped its other defenses and was relying solely on inequitable conduct.

The PTO twice rejected Astra’s quetiapine patent application under obviousness–and twice Astra responded with argument and material that quetiapine was an "atypical" antipsychotic and was unexpectedly different from the prior art.  The second response carried the day.

Teva’s theories of inequitable conduct are based on Astra’s responses to the rejection–the court described them as follows:

Defendants allege that several acts on the part of Astra constitute inequitable conduct and, therefore, render the ‘288 patent unenforceable. Defendants’ first and primary argument is that Astra committed inequitable conduct because it misrepresented and/or omitted material information concerning certain prior art compounds in its prosecution of the ‘288 patent. Second, Defendants allege that, in response to a request by the patent examiner, Astra falsely asserted that generating data regarding a particular prior art compound would have been “very expensive.” Third, Defendants claim Astra deceived the PTO by representing that a record reference taught that a particular compound was a typical antipsychotic. Last, Astra failed to disclose to the PTO the death of a cebus monkey during testing of quetiapine. The Court will discuss each of these below.

To show inequitable conduct the defendant must show that the misrepresentation or omission was material and done with the intent to deceive the PTO.  The court found that none of Teva’s arguments could satisfy this test.

1. Omitted test results.  Astra’s failure to disclose its internal test data related to 4 of the many compounds tested was not material.  The court found that the results that were disclosed were done so to respond to the examiner assertion of prior art, so Astra was proper in producing test results related to the asserted, closest prior art.  The court also found insufficient evidence of intent to preclude summary judgment.

2. Expense of generating test data.  Astra advised the PTO that side-by-side testing of the Schmutz X prior art compound had not been done and doing so would be "very expensive."  The court found that Teva failed to put forth sufficient evidence that the statement was untrue, material, and done with intent.

3. Statement regarding prior art.  Astra described a reference cited by the examiner as disclosing only "typical" rather than "atypical" antipsychotics.  The prior art reference was provided in full (in German) with a summary in English.  Teva argued that the summary along with Astra’s prosecution statements mislead the PTO into believing that the reference was limited to "typicals" when, according to Teva, it didn’t discuss the issue at all.  The court reject the argument, concluding that enough information was given to the PTO for it to make its own conclusion about the reference.

4. Toxicity of quetiapine.  Astra disclosed and argued that quetiapine showed "no overt toxicity" in the recommended dosage.  Teva argued that the death of a cebus monkey shortly after dosing–which was not disclosed–showed that the statement and representations were false.  The court noted that a necropsy on the monkey did not list a cause of death, and further that Teva "pointed to nothing in the record that shows that the monkey died from the toxic effects of quetiapine; such a conclusion is speculative at best."  The court also found no evidence of intent to deceive–although Teva argued that Astra kept quite so as not to undermine its statement about lack of toxicity, the court found this "wholly insufficient to raise an inference of deceitful intent." 

More reading:

Opinion

Counsel:

AstraZeneca: McCarter English (Andrew Berry, Nicole Corona, Christian Samay, Jonathon Short, Mark Anania).

Teva: Lite, DePalma, Greenberg & Rivas (Allyn Lite, Michael Patunas). 

2007-1545, 2008-1162 Qualcomm v. Broadcom

This is the appeal from case relating to the H.264 video compression standard resulting from the Joint Video Team, aka the case in which Qualcomm and its counsel were sanctioned.  We previously posted the Summary of the Arguments here, but now can provide copies of Qualcomm’s opening and reply briefs, and Broadcom’s response.

Oral argument has now been scheduled for Tuesday, 05 August 2008 at 10:00 A.M., Courtroom 402.

For those following all versions of the Qualcomm/Broadcom fight, a reminder that oral argument in the case where Qualcomm’s (3G) WCDMA and EV-DO cellular
chips and its QChat software were found to infringe and were permanently enjoined  (see our In Brief post) is next Wednesday, 09 July 2008, 10:00 A.M., Courtroom 203.