Here is an update on recent en banc activity at the Federal Circuit in patent cases. Highlights include a grant of en banc rehearing to address a damages experts’ reliance on comparable licenses. In addition, three new petitions raise questions concerning inducement of infringement and skinny-labeling, the effect of a remand overturning a holding on which Patent Owner relied in drafting its amended claims, the written description requirement, and obvious-type double patenting. Related to these new petitions, we also report on a new response, a new reply, and three new amicus briefs. Here are the details.
Grant of Rehearing
As we reported last week, the court granted a petition for en banc rehearing filed by Google in a patent case, EcoFactor, Inc. v. Google LLC. Google presented the following question in its petition:
- Did the court err in “failing to rigorously scrutinize a patentee’s reliance on supposedly comparable licenses” resulting in an “artificially inflated damages award that is divorced from market realities and devoid of connection to the patent’s incremental improvement to the art”?
In the order granting rehearing, the court requested the parties “file new briefs, which shall be limited to addressing the district court’s adherence to Federal Rule of Evidence 702 and Daubert v. Merrell Dow Pharmaceuticals, Inc., 509 U.S. 579 (1993), in its allowance of testimony from EcoFactor’s damages expert assigning a per-unit royalty rate to the three licenses in evidence in this case.”
New Petitions
There are three new petitions.
Amarin Pharma, Inc. v. Hikma Pharmaceuticals USA Inc.
In this case, Hikma Pharmaceuticals asked the court to review the following questions:
- “Can a patentee state a claim that a defendant ‘actively induces infringement’ of a patented method under 35 U.S.C. § 271(b) without identifying any alleged statement by the defendant that even mentions, let alone encourages, practicing the claimed method?”
- “Where it is undisputed that a generic drugmaker has ‘carved out’ a patented method of use from its labeling under 21 U.S.C. § 355(j)(2)(A)(viii), does the generic drugmaker induce infringement of the patented method by (a) referring to its product as a ‘generic version’ of a branded drug approved for the patented method; and (b) quoting sales figures for the branded product—without mentioning the patented method?”
ZyXEL Communications Corp. v. UNM Rainforest Innovations
In this case, UNM Rainforest Innovations raised the following issue:
- “This Court has never considered the effect of a remand overturning a holding on which Patent Owner relied in drafting its amended claims. Here, the Panel Opinion overturned an aspect of the Final Written Decision which effectively overturned the Board’s Institution Decision on which Patent Owner relied in drafting its amended claims, as well as in the Board’s preliminary guidance on which Patent Owner relied in choosing not to further amend its claims. This is an issue of first impression. Just as this Court encouraged the PTAB to remedy its relevant actions below in light of the Panel Opinion regarding claim 8, it should similarly allow Patent Owner to remedy its relevant actions below in light of the same.”
Allergan USA, Inc. v. MSN Laboratories Private Ltd.
In this case, MSN Laboratories raised the following questions:
- “Does a general disclosure that a pharmaceutical compound may be combined with any of five inactive ingredients sufficiently describe ‘picture claims’ to specific formulations that are ‘narrow’ and recite ‘specific amounts’ of ‘specific ingredients’ []?”
- “Where this Court purportedly finds error in a trial court’s written description analysis, may this Court re-weigh the evidence and decide the ultimate question of whether the specification describes the claims under its own de novo review of the specification, or must the Court remand for factfinding under a proper analysis?”
- “Are the claims of ‘a first-filed, first-issued’ patent in a patent family immune from obviousness-type double patenting over later-filed, later-issued patent claims in the same family [], even if the first-filed, first-issued claims are patentably indistinct from, and expire later than, the later-filed, later-issued claims?”
New Response and Reply
There has been a response and a reply to one of the new petitions.
In ZyXEL Communications Corp. v. UNM Rainforest Innovations, as noted above, the petition presented a question regarding the effect of a remand overturning a holding on which a patent owner relied in drafting amended claims.
In its response to the petition, ZyXEL argues “the Panel’s Opinion was grounded in the record and well-reasoned, and certainly did not misapprehend any points of law or fact” for four reasons: (1) the court did not make a claim construction determination or misapply a claim construction; (2) while the Board determined that certain arguments below were waived, ZyXEL’s arguments on appeal were based on its original petition arguments and UNMRI purportedly conceded they were not waived; (3) the panel did not “misapprehend” the opinion of UNMRI’s expert; and (4) the panel did not misapprehend UNMRI’s arguments that a “purportedly-significant redesign of the primary reference[] would have been required.”
UNMRI filed a reply supporting its petition. In its reply, UNMRI argues: (1) the panel’s opinion “vitiated the sole difference” between two patent claims; (2) the panel considered “precisely the argument that the Board found ZyXEL had forfeited” in its petition and ZyXEL “does not distinguish binding precedent that a petitioner’s arguments must be raised fully” in its petition; (3) the panel “misapprehended” UNMRI’s expert’s testimony; (4) expert testimony “of the required complex design is an alternative ground for affirmance of the Board’s decision” that ruled for UNMRI; and, (5) the panel’s opinion would “drastically increase the burden on the Board[.]”
New Amicus Briefs
The court received three new amicus briefs in another of the cases involving a new petition, Amarin Pharma, Inc. v. Hikma Pharmaceuticals USA Inc. As discussed above, the petition filed by Hikma Pharmaceuticals raises questions regarding inducement of infringement and skinny-labeling. All three amicus briefs support rehearing.
In the first amicus brief, Teva Pharmaceuticals USA, Inc. argues that a “shift in this Court’s interpretation of the inducement statute, 35 U.S.C. § 271(b), and the skinny-label statute, 21 U.S.C. § 355(j)(2)(A)(viii), will prevent life-saving, low-cost generic drugs from reaching the market—to the detriment of patients and government payors.” Teva contends the Federal Circuit “should grant rehearing en banc and take the opportunity to completely revisit its recently changed approach to skinny-label inducement claims.” As for why, Teva argues the Federal Circuit’s “recent skinny-label jurisprudence makes using the [statute’s] carve-out untenable.” Additionally, Teva posits, the Federal Circuit’s “interpretation is at odds with the text and structure of the skinny-label and inducement statutes, with harmful ramifications for patients.”
In the second amicus brief, the Association for Accessible Medicines contends the “panel’s decision makes it all but impossible to market a generic[] drug without infringement risk.” On the merits, AAM makes three main arguments. First, AAM asserts the panel’s “decision destroys the bright line that once enabled generics to avoid inducement liability.” Second, AAM reasons, the panel’s holding “contradicts” the Federal Circuit’s “inducement decisions in a manner that warrants en banc review.” Third, “brands’ ability to delay . . . generic competition has been supercharged” because “generics will be disinclined to use” 21 U.S.C. § 355(j)(2)(A)(viii) due to the panel’s decision.
In the final amicus brief, fifteen “scholars of law and medicine” argue the “panel’s decision announces an over-expansive, ill-defined doctrine of inducement, in which well-pled allegations may be based on nothing more than ordinary marketing materials and mandatory labeling.” They further argue “[t]his unprecedented and erroneous expansion of inducement liability leaves the law uncertain . . . about [a generic’s] own product equivalence and how much of the generic’s product’s labeling information must be revised.” They contend the Federal Circuit’s approach will therefore harm patients. Moreover, they contend, “because the inducement doctrine is not limited to pharmaceutical patents, the decision could have far-reaching effects on other industries and technological fields.”