Last week, the Federal Circuit heard oral argument in Restem, LLC v. Jadi Cell, LLC, a case we have been tracking because it attracted an amicus brief. In this case, Restem appeals a judgment of the Patent Trial and Appeal Board in an inter partes review proceeding, which resulted in challenged claims being found not unpatentable. This is our argument recap.
Joseph J. Richetti argued for Restem. Beginning with the issue of standing, one judge pressed Richetti over whether “there is in fact a substantial risk of infringement.” The judge suggested that “the question is” whether Restem’s process “results in cells that fall within this narrow space” because, if resulting cells don’t always express the claimed markers, Restem “can’t fall within this claim.” Richetti contended that the cells do fall within the claim because “the marker expressions are a byproduct of the place in the umbilical cord that the cells are removed from.” Because those cells “are going to have those marker expressions,” he argued, they necessarily fall within the claim.
Another judge similarly asked “[w]hy is there any kind of substantial risk of infringement?” Richetti similarly responded by arguing that there is infringement “[b]ecause we’re all getting cells, at least in part,” from the same place, the subepithelial layer (SL), and “that’s what drives the marker expression.” Richetti maintained that “taking cells from the SL” will “necessarily mean you are getting those marker expressions.” Richetti reiterated, that, “if the cells are coming from the SL, it’s an intrinsic quality of those cells.” In fact, Richetti asserted, “the marker expressions are not something separate and distinct from the process.”
One judge suggested that, since Restem was relying on “an inherency argument,” it must be stipulated, “that any time you perform these two process steps, you will, with 100% certainty, get an isolated cell with these three properties.” The judge went further, asking “where is the evidence that says that?” Richetti claimed it was “in the record,” but the judge responded that he was “not sure” he “saw evidence for that.” Instead, the judge indicated, Restem’s evidence that the process resulted in “one or more cells with all of these properties” may not support its claim. “You got one; that doesn’t mean you always get one,” he concluded.
Richetti, in response, argued “the specification and the file history” of the patent in question make clear “that the two step process” of the product-by-process claim “create[s] the isolated cells.” In fact, Richetti asserted, “the Board found that both the prior art and the patent teach the claimed process.” Moreover, he argued, “there is nothing contrary in the record that suggests the claimed process . . . does not yield the isolated cell.” As a result, Richetti argued, given “many Federal Circuit cases” on point, if Jadi Cell relies on process steps “to demonstrate the patentability of the claim, much less define it, the burden should” be on Jadi Cell to show the claimed process “doesn’t yield” the claimed product.
Jed H. Hansen argued for Jadi Cell. Hansen began by pointing out that, “as the appellant and the party seeking judicial review, it is Restem’s burden to come forward” with evidence. In particular, he argued, it was Restem’s “burden . . . to come forward with evidence demonstrating that it has Article III standing to appeal the Board’s final written decision finding that Restem had not carried its burden of proof at trial.” He suggested Restem “must identify relevant evidence demonstrating its standing either at the Board level or in response to a motion to dismiss or in its opening brief.”
One judge asked whether “performing the two steps always result in the three properties.” Pointing to prior art, Hansen argued “it does not.” Indeed, he maintained, “the Board found” that one reference “disclosed the two steps but also found [] that 100% of the cells expressed . . . one of the negative limitations in the claim.” Hansen asserted that “Restem’s argument falls apart” because it “didn’t come forward with any [] evidence” that “the process steps always result in the claimed cells.”
Another judge asked how she should “understand what the patentee’s burden is in a product-by-process claim.” Hansen responded by arguing “the patentee’s burden in demonstrating validity or no invalidity rests solely on whether the product is new or not in the art.” Therefore, he continued, the court “looks only to whether the product is present in the prior art or not.” In fact, Hansen asserted, “the process steps are ignored,” which, he suggested, is “the exact opposite of what Restem would have this court do.”
Hansen urged the court to reject Restem’s argument that, once the process steps are met, “as a matter of law, you must also find that the product is present.” One judge seemed to agree, suggesting “it is a matter of fact whether a process always produces” the claimed product, and further, he asserted, “you have to either show that here is something that is produced by the process that has those properties, or you have to show that everything produced by the process always has those properties.” Hansen agreed, further pointing out that “the Board found that there were other factors and conditions that led to the resulting claimed cells.” Hansen indicated that “Restem, on appeal, says that those other factors and conditions are implicit claim” requirements, “but that only follows if you agree that, as a matter of law, no matter what you recite in the process steps, then the product will always follow.” But, he continued, “[t]hat is not the law.”
Another judge questioned whether Jadi Cell had an enablement problem “when you have a claim,” like the one at issue here, “that claims a cell by virtue of what it expresses or doesn’t express but doesn’t tell you how to achieve that expression?” Hansen explained that “those are different analyses.” He suggested enablement is reviewed based on whether “the claim in the context of the specification teach[es] the person of ordinary skill in the art how to make and use the invention.” In this instance, he argued, “the specification does.” But, he also argued, “the claim doesn’t have to.”
The next judge, moving to claim construction, asked “whether an isolated cell can be a single cell or is instead limited to some collection of cells for which you can determine a registered amount of expressions.” Hansen, in response, argued “it does not matter . . . because there is no prejudice.” Moreover, he indicated, “if one were to look at the term ‘isolated cell’ in a vacuum, . . . then [Restem’s] argument might make sense.” But Hansen pointed to the Board’s analysis, which “looked at the intrinsic and extrinsic record and found that [the term] is understood in terms of cell populations, not cells all by themselves.”
We will continue monitoring this case and report on developments.