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Recent Litigation News in Intellectual Property


                                                                                                August 2013

In This Issue

·    Federal Circuit Finds PTO  Cancellation Of Claims To Be Given Effect In Pending Infringement Litigation

·    Federal Circuit Affirms Jurisdiction Proper Before The U.S. Court Of Federal Claims

·    Federal Circuit Affirms JMOL Of Invalidity

·    Federal Circuit Reverses Grant Of Summary Judgment

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Federal Circuit Finds PTO Cancellation Of Claims To Be Given Effect In Pending Infringement Litigation                                    

In Fresenius USA, Inc. v. Baxter International, Inc., Appeal Nos. 2012-1344, -1335), a race to “final judgment” led the Federal Circuit to affirm the PTO finding of invalidity of claims which it had previously affirmed not invalid, then give the finding of invalidity effect in the litigation which it had remanded for damages. 

A basic timeline of the pertinent events:

·        In 2003, Fresenius filed suit seeking declaratory judgments of invalidity and non-infringement on three Baxter patents.  Baxter counter-claimed for infringement. 

·        In October 2005, Fresenius requested ex parte reexamination of the three patents, and the PTO found substantial new questions of patentability and initiated reexamination proceedings in 2006.

·        In the district court a jury returned a verdict in Fresenius’ favor, finding relevant claims to be invalid.  But in February 2007, “the district court granted Baxter’s motion for judgment as a matter of law (JMOL), finding that Fresenius had presented insufficient evidence to support the jury’s invalidity verdict, and that Fresenius had therefore not proven that the claims of the patents were invalid.” 

·        In 2008 the jury awarded damages and the district court awarded Baxter an injunction, then stayed the injunction and awarded ongoing post-verdict royalties.  Both parties appealed.

·        In September 2009, the Federal Circuit reversed-in-part, holding that the asserted claims of two patents were invalid; affirmed-in-part, holding that the ‘434 patent claims had not been shown to be invalid; vacated-in-part, with respect to the district court’s injunction and royalty awards; and remanded, “for the district court to revise or reconsider the injunction.”

·        In March 2010, the Board of Patent Appeals and Interferences affirmed an examiner’s rejection of the pertinent claims of the ‘434 patent, and in July 2010 denied a request for rehearing.  Baxter then appealed to the Federal Circuit.

·        In March 2012 the district court awarded Baxter post-verdict damages at a reduced royalty rate.  Both parties appealed and in May 2012 the district court granted Fresenius’ motion to stay execution of the new judgment pending this appeal.

·        In May 2012 the Federal Circuit affirmed the PTO’s rejection of the ‘434 patent’s claims and in October of 2012 it denied a request for rehearing. The Federal Circuit “explained that this determination was not inconsistent with our holding in the infringement litigation because, unlike the district court in the infringement litigation, the examiner ‘sufficiently identified the corresponding structure’…Furthermore, the examiner ‘based [the] rejections on prior art references that were not squarely at issue during the trial on the invalidity issues.’”  The Federal Circuit mandate issued in November 2012, and Baxter did not petition for certiorari.  The PTO issued a certificate cancelling claims 26-31 of the ‘434 patent in April 2013.

The Federal Circuit discussed the history of reissue and reexamination and their effect on open infringement litigation, stating that “[i]n sum, under either the reissue or reexamination statute, if the PTO confirms the original claim in identical form, a suit based on that claim may continue, but if the original claim is cancelled or amended to cure invalidity, the patentee’s cause of action is extinguished and the suit fails.”

Baxter agreed that any pending litigation in which the claims are cancelled becomes moot, but argued that the cancellation of the claims could not be given effect at this point because the validity of the ‘434 patent and Fresenius’ infringement liability were conclusively decided in 2007 and that judgment was “final” and “binding.”  The Court noted that while the district court judgment was final for purposes of appeal, and might have preclusive effect in another case between the parties, it “was not sufficiently final to preclude application of the intervening final judgment in In re Baxter.( Fed. Cir. affirmation of the PTO’s cancellation of claims).

The Federal Circuit also held that their September 2009 affirmation that the ‘434 patent claims were not invalid, was not a final judgment.  “It is also clear that our remand decision in Fresenius I was not sufficiently final to prevent the application of In re Baxter (May 2012) in the pending suit.”  The Court explained that it is settled law that, “[t]o rise to that level, the litigation must be entirely concluded so that [the] cause of action [against the infringer] was merged into a final judgment . . . one that ends the litigation on the merits and leaves nothing for the court to do but execute the judgment.”   

The September 2009 affirmation that the ‘434 patent claims were not invalid was not a final judgment because it was remanded to reconsider damages.  Therefore it does not prevent the application of the May 2012 affirmation of the invalidity of the ‘434 patent claims to the remanded litigation.  And although the district court determined the damages in March 2012, that did not prevent the Federal Circuit from affirming the PTO finding of invalidity in May 2012. 

The dissent argued that the PTO was bound by the Fresenius I affirmation that the ‘434 patent claims were not invalid.

Federal Circuit Affirms Jurisdiction Proper Before The U.S. Court Of Federal Claims

In United States Marine v. U.S. (Appeal No. 2012-1678) the Federal Circuit affirmed an order transferring the case to the U.S. Court of Federal Claims. 

US Marine believed that the Navy improperly disclosed its proprietary technical drawings to a competitor, and filed suit in district court under the Federal Tort Claims Act.  The district court found the U.S. liable for trade secret misappropriation.  On appeal, the Court of Appeals for the Fifth Circuit reversed the district court, finding that the district court lacked subject matter jurisdiction.  The case was then transferred to the U.S. Court of Federal Claims. 

On appeal, the Federal Circuit questioned the rational of the Fifth Circuit, but affirmed that the U.S. Court of Federal Claims had jurisdiction under the Tucker Act.

Federal Circuit Affirms JMOL Of Invalidity

In Novozymes v. DuPont, Appeal No. 2012-1433, the Federal Circuit affirmed a district court’s  judgment as a matter of law that claims were invalid. 

The district court granted Novozymes’ motion for summary judgment on the issue of infringement and denied DuPont’s motion for summary judgment of invalidity under written description and enablement requirements.  After a jury concluded that the claims were not invalid and awarded Novozymes over $18 million, the district court granted DuPont’s post-trial motion for Judgment as a Matter of Law that the claims are invalid under 35 U.S.C. § 112 for failure to satisfy the written description requirement.  Novozymes appealed and the Federal Circuit affirmed.

The patent claimed an enzyme modification to improve acid and heat tolerance for enhanced stability.  The parent application disclosed seven potential parent enzymes to be used and thirty-three amino acid positions as “promising mutation targets” at which one of forty possible mutations could be made.  The district court “noted that the 2000 application did not point out the specific variants later claimed in the ‘723 patent…and analyzed precedents in which patent claims had been held invalid due to an underlying written description that set forth a broad, generic group of structures without specifically identifying the later-claimed species among many possible options.”

Although previous courts had found claims valid where the description included the claimed variant with several other possibilities, not all of which worked, the Novozyme parent application did not specifically describe the variant in the current claim.  It “contains no disclosure of any variant that actually satisfies the claims, nor is there anything to suggest that Novozymes actually possessed such a variant at the time of filing.”  The Federal Circuit thus concluded that the claims of the ‘723 patent were “invalid for failure to satisfy the written description requirement of § 112,” and affirmed the district court’s entry of judgment as a matter of law on that basis.

Federal Circuit Reverses Grant Of Summary Judgment

In Plantronics, Inc. v. Aliph, Inc. (Appeal No.  2012-1355), the Federal Circuit reversed a district court’s grant of summary judgment on the grounds of obviousness.  The district court found on summary judgment that the patent claims were obvious, and then concluded that the objective indicia of non-obviousness did not overcome the finding of obviousness.

On appeal, the Federal Circuit reversed because the district court failed to give proper consideration to objective indicia of non-obviousness prior to reaching its conclusion on obviousness.  The Federal Circuit stated that all evidence pertaining to objective indicia of non-obviousness needed to be considered before the district court reached its obviousness conclusion.   Accordingly, the Federal Circuit reversed the grant of summary judgment.


The GREENBLUM & BERNSTEIN NEWSLETTER is issued by GREENBLUM & BERNSTEIN, P.L.C., an intellectual property firm, to provide timely news in the field of intellectual property.  The NEWSLETTER provides updates on recent issues of general interest in this field.  The views and/or opinions expressed herein do not necessarily reflect those of GREENBLUM & BERNSTEIN, P.LC.  Information regarding the contents of the Newsletter can be obtained by contacting Michael J. Fink at GREENBLUM & BERNSTEIN, P.L.C., 1950 Roland Clarke Place, Reston, VA 20191.  Copyright © 2013 GREENBLUM & BERNSTEIN, P.L.C.