Supreme Court Agrees To Decide Proper Claim Construction Standard in IPR Proceedings

On January 15, 2016, the U.S. Supreme Court granted certiorari in a case involving the appropriate claim construction standard for patent claims challenged in an inter partes review proceeding before USPTO’s Patent Trial and Appeal Board (PTAB). Cuozzo Speed Technologies, LLC v. Lee, Case No. 15-446 (cert. granted Jan. 15, 2016).

Cuozzo Speed Technologies, LLC owns U.S. Patent No. 6,778,074, which claims, among other things, a speed display connected to a global positioning system device that displays a vehicle’s current speed and indicates when the speed exceeds the legal speed limit for the vehicle’s exact location. Garmin International, Inc. filed a petition for inter partes review (IPR) of certain claims of the ‘074 patent on September 16, 2012 – the first day that IPR proceedings were available under the Leahy-Smith America Invents Act. The PTAB construed the claims by giving each claim the “broadest reasonable construction in light of the specification of the patent in which it appears,” also known as the “BRI” standard, applying the USPTO rules for AIA proceedings. 37 C.F.R. § 42.100(b). In its final decision, PTAB ruled that three challenged claims were invalid as obvious.

Cuozzo appealed the result to the Federal Circuit. In a Feburary 4, 2015 divided decision, the court held that the BRI standard was appropriate. In re Cuozzo Speed Technologies, LLC, 793 F.3d 1268 (Fed. Cir. 2015). The panel also held that the USPTO’s decision to institute an IPR proceeding was not appealable, either prior to or after the PTAB’s final decision. See 35 U.S.C. § 314(d) ([t]he determination by the Director whether to institute an inter partes review under this section shall be final and nonappealable.”). Cuozzo then filed a request for rehearing en banc.

In another split decision, the Federal Circuit declined en banc review by a thin margin. In re Cuozzo Speed Technologies, LLC, 793 F.3d 1297 (Fed. Cir. 2015) (per curiam).Circuit Judge Timothy B. Dyk wrote an opinion concurring in the denial. Chief Judge Sharon Prost, joined by four other judges, wrote an opinion dissenting from the denial.

The principal point of disagreement on the court, and an issue to be considered by the Supreme Court on appeal, is the standard the PTAB should use to construe claims during AIA proceedings. The USPTO implemented the AIA’s post-grant provisions by promulgating rules requiring claims to be interpreted using the BRI standard. In federal court proceedings, on the other hand, claims are construed to have their “actual” meaning to a person skilled in the art based on the claim language, specification, prosecution history, and – occasionally – other extrinsic evidence.

In his concurring opinion, Circuit Judge Dyk argued that BRI was supported by the AIA’s legislative history, because Congress had been aware of the USPTO’s use of that standard for decades and the AIA legislative history is silent about requiring a different standard.

In her dissent, however, Chief Judge Prost argued that the AIA post-grant trial mechanism was a “new, court-like proceeding[,]” and thus it should use the same construction standard used in traditional litigation matters. She noted that the Federal Circuit has embraced the BRI standard only as a useful tool prior to patent issuance or during reexaminations or reissues, where the patentee has the ability to amend claims. Under the PTAB rules for IPRs, on the other hand, amendments are very limited.

The specific questions presented in the Supreme Court are:

1. Whether the court of appeals erred in holding that, in IPR proceedings, the Board may construe claims in an issued patent according to their broadest reasonable interpretation rather than their plain and ordinary meaning.

2. Whether the court of appeals erred in holding that, even if the Board exceeds its statutory authority in instituting an IPR proceeding, the Board’s decision whether to institute an IPR proceeding is judicially unreviewable.

Briefing will continue until late spring, with oral argument most likely in May.

Precisely delineated claims and the Protocol to Article 69: two cases, two views

From our friends Brian Whitehead, Stuart Jackson and Richard Kempner of Kempner and Partners comes this handy note on some very dramatic patent litigation from England and Wales which comes under their stern scrutiny. This is what they write:

Following on from yesterday’s decision in Smith & Nephew Plc v ConvaTec Technologies Inc [noted briefly on the IPKat here], the Court of Appeal for England and Wales has today handed down another decision in relation to patents in the healthcare sector in Actavis UK Ltd v Eli Lilly & Company [2015] EWCA Civ 555.  Actavis applied for declarations of non-infringement (DNIs) in respect of the UK, French, Italian and Spanish designations of European Patent No. 1 313 508.  That patent is drafted in the Swiss form, and claim 1 is for “Use of pemetrexed disodium in the manufacture of a medicament ...”.  Actavis’ proposed product contained pemetrexed in one of three different forms: the free acid, or the ditromethamine or dipotassium salts (non-chemist readers are referred to paragraphs 76-79 of Arnold J’s decision, in which an explanation of the various terms is given).

In assessing whether there was direct infringement, unusually both Arnold J at first instance and Floyd LJ on appeal applied the Improver three-stage test – rarely applied since the seminal decision in Kirin-Amgen.  Both at first instance and on appeal, it was held that there was no direct infringement.  We can agree with that – clearly, for example, the potassium salt of an acid is a different chemical entity to the sodium salt, and it is difficult to see how “sodium” could be construed to cover “potassium”.  In any case, the sodium and potassium salts may have different properties and would require separate efficacy and safety tests.

The Court of Appeal disagreed with Arnold J, however, on the issue of indirect infringement.  The medical practitioner utilising Actavis’s proposed product is required to dissolve it in a saline solution.  That would provide an excess of sodium ions, with the result that the solution would contain, amongst other things, pemetrexed and sodium ions.  Arnold J took the view that the reference to “pemetrexed disodium” in the claim is to the solid form of that substance.  Floyd LJ disagreed, holding that

“the skilled team, particularly the chemist, would understand from the 508 patent that pemetrexed disodium is also used to refer to solutions which contain pemetrexed ions and sodium ions in solution”.   

Applying that construction, Floyd LJ held that pemetrexed dipotassium is a means relating to an essential element of the invention, and therefore the Actavis product infringes under s. 60(2) of the Patents Act 1977. 

Whereas we can follow the logic of Floyd LJ’s approach, we believe that it leads to a rather arbitrary outcome, and that Arnold J’s approach was to be preferred.  The saline solution is nothing more than an inert carrier, and if Actavis’s formulation was dissolved in another (non sodium-containing) carrier, infringement under s. 60(2) would presumably not have been made out.  In fact, according to the postscript to the judgment Actavis has now asked for a declaration of non-infringement in respect of its same formulation but using a dextrose solution instead of a saline solution.

The decision raises a number of other very interesting issues, particularly on whether (and if so under what rules) the English courts can grant declarations of non-infringement for other countries’ designations of European patents.  Doubtless these issues will be the subject of commentary, but for the time being we have focussed only on the patent construction point.

The authors, two of whom are former research chemists, also have a comment on the ConvaTec decision. We find the outcome of Kitchin LJ’s approach to be problematic, in that we cannot see how the skilled person could possibly consider a concentration of 0.5% as falling within a claimed range of "between 1 per cent and 25 per cent".  We respectfully disagree with the approaches of both Birss J and Kitchin LJ.  In our view, the skilled person would understand that reagent concentrations can never be absolutely precise, but are subject to a margin of error.  What is an acceptable margin of error will depend upon the particular purpose of the reagent.  Kitchin LJ considered that “it is clear from the teaching of the specification that the binding agent concentration is not critical in the method of this invention”.  In the circumstances, we consider that whereas the skilled person would not necessarily prepare and measure the concentration of the silver solution to the highest degree of precision (it was undisputed that the concentration can be measured to a precision of at least two decimal places), he would still prepare and measure it with a reasonable degree of accuracy.  A minimum accuracy of 10% would, we suggest, be appropriate, as that is easily achievable even without using microbalances and calibrated volumetric flasks.  That would imply that the range covered by "between 1 per cent and 25 per cent" is, at its widest, 0.9-27.5%.  The chemist (one of the members of the skilled addressee as determined by Birss J) would be unlikely even to consider the concept of significant figures, which seems to form the basis of the judge’s thinking, even if he recalled the concept from school mathematics studies.  He would, though, expect a reasonable degree of accuracy in preparation of stock solutions, even for applications not requiring a high level of precision.  A margin of error of 50%, as suggested by Kitchin LJ’s approach, would in our view be regarded as unacceptable by the chemist.  Indeed, we would challenge the competence of any lab technician who made up such a solution.

Whereas this and yesterday’s ConvaTec decision may appear to have little in common, when read together they raise an interesting issue relating to patent construction.  All readers will be familiar with the Protocol to Article 69 of the European Patent Convention (EPC), which states that claims are to be construed in such a way as to combine fair protection for the patentee with reasonable certainty for third parties.  The judges in both cases expressly referred to the Protocol, and satisfied themselves that their construction of the patents satisfied its requirements.  Given that, we consider it surprising that two patent claims, which appear on their face to be very precisely delineated, can have given rise to such a divergence of views by judges in the Courts of England and Wales.  Whereas the patentees will presumably be highly satisfied with the degree of protection they have been given, we are not sure that the results can be said to provide “reasonable certainty for third parties”.  We shall have to see whether the Supreme Court will agree to hear appeals from either, and if so whether they will disagree with one (or both!) of the courts in either case.

Federal Circuit’s Initial Reaction to Teva: “Clearly Erroneous” Review Standard Not Implicated In Most Cases

In the nearly three months since the U.S. Supreme Court ruled that subsidiary factual findings in claim construction proceedings must be reviewed for clear error, the U.S. Court of Appeals for the Federal Circuit has decided a handful of cases requiring it to review claim construction rulings by a district court or the U.S. Patent and Trademark Office. The Federal Circuit has declined to extend deference in any of those cases, and by all indications it is unlikely to do so in many future cases.

Prior to January 20, 2015, the Federal Circuit reviewed claim construction rulings – including subsidiary factual findings – de novo, without affording any deference to the findings or reasoning of the lower court. See Cybor Corp. v. FAS Techs., Inc., 138 F.3d 1448 (Fed. Cir. 1998) (en banc). In Teva Pharmaceuticals USA, Inc. v. Sandoz, Inc., ___ U.S. ___ (Jan. 20, 2015), the Supreme Court held that district court factual findings based on extrinsic evidence are subject to “clearly erroneous” review under Fed. R. Civ. P. 52(a)(6). This more deferential standard applies even if the fact finding is “nearly dispositive” of the ultimate legal question of claim interpretation.

The Teva Court indicated that in reviewing claim construction rulings, the Federal Circuit should review the ultimate ruling on claim construction de novo. If the district court only considered intrinsic evidence (the claim language, specification, and prosecution history), then the entire question of claim construction is subject to de novo review. If, however, the district court ventured into extrinsic evidence (such as expert or inventor testimony), then those specific factual findings are entitled to deference and must be reviewed for clear error. Despite that deference, however, the Federal Circuit still reviews the ultimate claim construction ruling de novo.

In practice, Teva’s effect on Federal Circuit review of claim construction rulings may prove to be limited. The appeals court has held that extrinsic evidence – the only type of finding now afforded any deference – is much less significant in the claim construction analysis than intrinsic evidence. See Phillips v. AWH Corp., 415 F.3d 1303, 1318 (Fed. Cir. 2005) (“We have viewed extrinsic evidence in general as less reliable than the patent and its prosecution history in determining how to read claim terms”). In fact, the Federal Circuit has rarely, if ever, expressly relied on extrinsic evidence when interpreting a claim. It is not likely to start relying on extrinsic evidence following Teva. A review of Federal Circuit cases since Teva illustrates the decision’s limited impact to date.

PTAB Ex Parte Proceedings

The Federal Circuit has addressed Teva in two cases arising from ex parte appeal proceedings before the USPTO Patent Trial and Appeal Board. In In re Imes, 778 F.3d 1250 (Fed. Cir. Jan. 29, 2015), the Federal Circuit reversed a PTAB ruling cancelling claims in a reexamination. The court rejected the USPTO’s construction of the term “wireless” based on an express and unambiguous definition of the term provided in the specification. As a result, the court noted that, “Nothing in this case implicates the deference to fact findings contemplated by the recent decision in Teva[.]” 778 F.3d at 1252 n.1.

In a more recent case involving an ex parte appeal from a final rejection, the Federal Circuit also stated that its review of the USPTO’s claim interpretation did not implicate the Teva standard. In re Bookstaff, No. 2014–1463 (Mar 26, 2015). The court reversed the USPTO’s construction of the term “data that is indicative of a gratuity to be charged” based on the specification and disclosed embodiments, without considering any extrinsic evidence.

PTAB AIA Proceedings

The Federal Circuit addressed the standard for reviewing claim interpretation during an AIA post-grant proceeding in one case, In re Cuozzo Speed Technologies, LLC, 778 F.3d 1271 (Fed. Cir. 2015). After holding that the Teva decision is applicable to PTAB trial appeals, the Federal Circuit proceeded to exercise de novo review. The PTAB based its interpretation of the challenged claim on the patent specification and prosecution history. As a result, the Federal Circuit noted that, “Because there is no issue here as to extrinsic evidence, we review the claim construction de novo.”

District Court Actions

In two appeals from district court judgments, the Federal Circuit also declined to apply Teva’s clearly erroneous standard. In Fenner Investments, Ltd. v. Cellco Partnership, 778 F.3d 1320 (Fed. Cir. 2015), the court noted the Teva standard, but affirmed the district court’s construction of the term “personal identification number” based on the specification and statements made in the prosecution history.

In Enzo Biochem Inc. v. Applera Corp., ___ F.3d ___, (Fed. Cir. Mar 16, 2015), the court considered an appeal from a jury verdict of infringement. The district court ruled that the asserted claim covered both direct and indirect modes of detecting nucleotide probes, based in part on expert testimony that a figure in the patent specification disclosed an example of direct detection. On appeal, the Federal Circuit reversed in a 2-1 decision, relying on claim language and statements in the specification. The majority considered arguments based on the expert testimony to be waived on appeal, but noted that, “Nevertheless, even if we were to consider the district court’s finding, which would be subject to review for clear error under Teva, this sole factual finding does not override our analysis of the totality of the specification, which clearly indicates that the purpose of this invention was directed towards indirect detection, not direct detection.” In a dissent, Judge Newman argued that the district court’s construction was based on specific findings, including those based on expert testimony, and that, “These factual findings are entitled to deference, in accordance with the Court’s instruction in Teva[.]” She accused the majority of “ignoring the testimony and the district court’s findings and the jury verdict based on the evidence at trial.”

In Teva, the Court established that, when construing claims, appropriate deference must be given to the findings of the district court. The district court received some conflicting testimony, along with concessions on cross-examination, from which the court concluded that “at least one component” may include “the whole signaling moiety.” My colleagues show error of neither fact nor law in the court’s findings and conclusions.

Conclusion

 It is difficult to predict the long-term impart of Teva based on the limited number of Federal Circuit decisions applying it. The cases suggest, however, that the Federal Circuit likely will continue to apply de novo review when it resolves claim construction issues based on intrinsic evidence. In addition to situations where the USPTO or district court only considered intrinsic evidence, this approach may extend to situations in which courts considered extrinsic evidence, including expert testimony, but the Federal Circuit views the evidence to be insubstantial to the claim construction analysis.

Supreme Court Limits Federal Circuit’s Ability To Revise Claim Construction On Appeal

On January 20, 2015, the U.S. Supreme Court handed down its first patent decision of the current term, rejecting the U.S. Court of Appeals for the Federal Circuit’s long-standing practice of reviewing district court patent claim construction rulings, including subsidiary factual findings, without deference. The Supreme Court ruled that the Federal Circuit review all district court factual findings for “clear error,” even if the fact is nearly dispositive of the claim construction issue. The ultimate interpretation of the claim remains a legal conclusion, however, that the Federal Circuit will review de novo. Teva Pharmaceticals USA, Inc. v. Sandoz, Inc., Case No. 13-854 (Jan. 20, 2015). The slip opinion is available HERE. 

Background:

The interpretation of the asserted claims frequently is critical to the outcome of a patent dispute. The construction of disputed claim terms determines whether an accused product infringes the patent and is pivotal to most invalidity defenses. In Markman v. Westview Instruments, Inc., 517 U.S. 370 (1996), the Supreme Court ruled that claim construction is an issue delegated to the trial judge, even when it involves fact issues, such as the meanings of terms of art recited in a claim. Markman did not expressly state whether those factual findings subsumed in a claim construction ruling are subject to de novo review (as normally would be the case for legal rulings) or to review for “clear error” (as normally would apply to judicial fact findings).  In Cybor Corp. v. FAS Techs., Inc., 138 F.3d 1448 (Fed. Cir. 1998) (en banc), the Federal Circuit held that it would review district court claim construction rulings to de novo, reviewing the record without deference. Critics of the Cybor policy, including several Federal Circuit judges, have pointed out that the approach is inconsistent with the prevailing claim construction analysis, which requires district courts to consider a factual record consisting of both “intrinsic” evidence (the patent claims, specification, and prosecution history) and “extrinsic” evidence (such as expert testimony, treatises, art references, and other facts outside the patent and prosecution).

Teva Pharmaceuticals v. Sandoz Dispute

The Supreme Court ruling comes in a case involving drug patents under the Hatch Waxman Act. Teva Pharmaceuticals owns several patents covering its Copaxone® multiple sclerosis drug. Sandoz and other generic drug companies filed Abbreviated New Drug Applications seeking approval to market a generic form of the drug. In response, Teva filed an infringement action under the Hatch Waxman Act. 35 U.S.C. § 271(e)(2).

Sandoz argued that a group of claims in the Teva patents were invalid as indefinite, because the term “molecular weight” appearing in the claims was subject to multiple incompatible meanings, and the patents themselves and the relevant prosecution histories did not resolve the ambiguity. The United States District Court for the Southern District of New York ruled that the claims were not indefinite. Among other things, the district court based its determination on its construction of the disputed term, relying on expert testimony presented by Teva that the term "molecular weight" was not ambiguous.

On appeal, the Federal Circuit, reversed, ruling that the claims were indefinite. The Federal Circuit reviewed the conflicting expert testimony Teva and Sandoz presented to the trial court on the question whether the term “molecular weight” was ambiguous. The Federal Circuit concluded that “on de novo review of the district court's indefiniteness holding, we conclude that Dr. Grant's testimony [introduced by Teva] does not save Group 1 claims from indefiniteness." Teva appealed to the Supreme Court.

Supreme Court Decision

In a 7-2 decision, the Supreme Court reversed the Federal Circuit, holding that it should have accepted the district court’s determination that “molecular weight” was not ambiguous unless the finding was clearly erroneous. Justice Breyer, writing for the majority, reasoned that Fed. R. Civ. P. 52(a)(6) mandates this more deferential standard of review and nothing in the Court’s jurisprudence or the rationales adopted by the Federal Circuit in Cybor permitted a different standard.

Breyer noted that although Markman gives the district judge sole responsibility to construe a patent claim, it recognizes that claim construction will require subsidiary factual findings. Analogizing a judge’s role in claim construction with a similar role in interpreting contracts or deeds, the Court observed that these subsidiary findings are subject to review for clear error, even when the ultimate interpretation of the documents receives de novo review. During the claim construction process, “courts may have to resolve subsidiary factual disputes. And . . . [Rule 52(a)(6)] requires appellate courts to review all such subsidiary factual findings under the ‘clearly erroneous’ standard.” Slip op. at 7.

The majority was not impressed with Teva’s policy argument that de novo review was important to ensure uniform interpretation of patents nationwide, preventing a “zone of uncertainty” that would discourage innovation. Instead, the Court stated that district court judges were reliable factfinders for scientific or technical disputes, noting that, “A district court judge who has presided over, and listened to, the entirety of a proceeding has a comparatively greater opportunity to gain that familiarity than an appeals court judge who must read a written transcript or perhaps just those portions to which the parties have referred.” Slip op. at 7-8. Moreover, it stated that inconsistent claim construction rulings by different trial courts would be infrequent and unlikely to cause uncertainty:

Neither the [Federal] Circuit nor Sandoz, however, has shown that (or explained why) divergent claim construction stemming from divergent findings of fact (on subsidiary matters) should occur more than occasionally. After all, the Federal Circuit will continue to review de novo the district court’s ultimate interpretation of the patent claims. And the attorneys will no doubt bring cases construing the same claim to the attention of the trial judge; those prior cases will sometimes be binding because of issue preclusion, see Markman, 517 U. S., at 391, and sometimes will serve as persuasive authority. Moreover, it is always possible to consolidate for discovery different cases that involve construction of the same claims. And, as we said in Markman, subsidiary fact-finding is unlikely to loom large in the universe of litigated claim construction.

Slip op. at 9.

Finally, the Court provided specific guidance on how to apply both review standards in claim construction appeals. First, in situations where the district court relies only on the intrinsic evidence (claim language, specification and prosecution history), its ruling is subject to de novo review. If the district court decision relies on factual underpinnings, however, such as evidence concerning the “background science or the meaning of a term in the relevant art during the relevant time period[,]” it should make specific factual findings and those findings are subject to review for clear error:

The district judge, after deciding the factual dispute, will then interpret the patent claim in light of the facts as he has found them. This ultimate interpretation is a legal conclusion. The appellate court can still review the district court’s ultimate construction of the claim de novo. But, to overturn the judge’s resolution of an underlying factual dispute, the Court of Appeals must find that the judge, in respect to those factual findings, has made a clear error. Fed. Rule Civ. Proc. 52(a)(6).

Slip op. at 13. The clear error standard applies even when the factual finding “is close to dispositive of the ultimate legal question of the proper meaning of the term in the context of the patent.” Id.

Applying this framework to the case on appeal, the Court held that the district court’s fact finding that a person skilled in the art would not have consider the “molecular weight” ambiguous was entitled to deference. “The Federal Circuit should have accepted the District Court’s finding unless it was “clearly erroneous.” Our holding today makes clear that, in failing to do so, the Federal Circuit was wrong.” Id. at 16.

Justice Thomas dissented, arguing that the entire claim construction issue was legal, notwithstanding any subsidiary facts, and should be subject to de novo review, just as a trial court’s interpretation of a statute is reviewed without deference. He added that he feared the ruling would lead to divergent decisions in patent cases, leading to uncertainty and, ultimately, suppression of innovation.

Although the Teva decision does not expressly alter the analytic framework used in claim construction proceedings since Phillips v. AWH Corp., 415 F.3d 1303 (Fed. Cir. 2005) (en banc), it is likely to introduce important strategic issues in patent cases, especially relating to conduct of claim construction proceedings. The extent of those changes will depend on how the Federal Circuit applies the decision in subsequent cases.

When the taste of salts is bitter - AstraZeneca loses appeal in Nexium case

Yesterday, the US Court of Appeals for the Federal Circuit published its decision in the case of AstraZeneca v Hanmi, affirming the judgment rendered at first instance by the District Court for the District of New Jersey.

AstraZeneca holds the US Patents No. 5,714,504 and 5,877,192, which cover pharmaceutical compositions containing alkaline salts of esomeprazole, the S-enantiomer of omeprazole. In particular, AstraZeneca developed and marketed the brand drug Nexium, which contains the magnesium salt of esomeprazole as its active ingredient, for the treatment of gastroesophageal reflux disease and gastric acid related diseases. In 2010, Hanmi filed a New Drug Application with the US Food and Drug Administration for a product containing the strontium salt of esomeprazole, certifying, under 21 USC § 355(b)(2)(A)(4), that AstraZeneca's patents were invalid or would not have been infringed by Hanmi's product. The patent holder thus filed the present lawsuit, alleging patent infringement.

The Federal Circuit examined only one issue, namely whether the written description of the '504 patent limited the claim term 'alkaline salt' to a subset of specifically named salts, defined by six identified cations (Na⁺, Mg²⁺, Li⁺, K⁺, Ca²⁺, and N⁺(R)₄). After reviewing the history of AstraZeneca's patents, the court focused on Independent claim 1, which reads as follows:

A pharmaceutical formulation for oral administration comprising a pure solid state alkaline salt of the (-)-enantiomer of [omeprazole] and a pharmaceutically acceptable carrier.

The judges observed that, 'on its face and outside the context of the '504 patent', the term 'alkaline salt' used in Independent claim 1 would not be limited to the cations named above. However, they found that the written description of the patent limited the claim scope to those cations, introducing a clear disclaimer of any other acceptable salt, as held in the appealed decision. The written description and the abstract respectively indicate that:

[Description] The present invention refers to the new Na⁺, Mg²⁺, Li⁺, K⁺, Ca²⁺, or N⁺(R)₄ salts of the single enantiomers of omeprazole, where R is an alkyl with 1-4 carbon atoms, i.e. Na⁺, Mg²⁺, Li⁺, K⁺, Ca²⁺, or N⁺(R)₄ salts of (+)-[omeprazole] and (-)-[omeprazole], where R is an alkyl with 1-4 carbon atoms.

[Abstract] The novel optically pure compounds Na⁺, Mg²⁺, Li⁺, K⁺, Ca²⁺, or N⁺(R)₄ salts of (+)-[omeprazole] or (-)-[omeprazole], in particular sodium and magnesium salt form thereof, [...]

Reciting previous case law, the court noted that both the description and the abstract of the '504 patent 'clearly confine the invention to the six identified cations, disclaiming anything else' (see Honeywell v ITT and TG; see also Verizon Services v Vonage Holdings, for a case in which the court looked at the specification to find an implicit distinction between the invention and the prior art, and SciMed Life Systems v Advanced Cardiovascular Systems, where the specification limited the invention to a subset of the matter described by the plain language of the claim - both cases are reminiscent of Watts v XL Systems: '[o]ne purpose for examining the specification is to determine if the patentee has limited the scope of the claim'). This conclusion, according to the decision, is reinforced by the fact that the patent applicant conspicuously and consistently referred to only certain members of the class of substances which were potentially suitable for forming a salt with esomeprazole, and specifically to the six cations named above. The reiterated use of this subset of cations, coupled with the language of the description and abstract, 'conveyed a clear and definitive meaning that [AstraZeneca] was disclaiming other members of the class - like Hanmi's chosen strontium'.

The court dismissed three additional arguments raised by the patent holder. The first concerned the 'exemplified' language used in one sentence of the written description ('Alkaline salts of the single enantiomers of the invention are, as mentioned above, beside the sodium salts [...] and the magnesium salts [...], exemplified by their salts with Li⁺, K⁺, Ca²⁺, or N⁺(R)₄ [...]'): the court found that the passage does not clearly affirm the intent to treat all the six cations as mere examples, and cannot be read as a denial of the clear disclaimer language mentioned above. The second argument focused on the prosecution history, but the judges could not identify any statement or data pointing to other salts beyond those identified in the written description. Finally, AstraZeneca sought to rely on claim differentiation, alleging that each independent claim reciting an alkaline salt has a dependent claim that differs only by the addition of 'wherein the alkaline salt is a Na⁺, Mg²⁺, Li⁺, K⁺, Ca²⁺, or N⁺(R)₄ salt'. The court swiftly dismissed this final argument, noting that 'the doctrine of claim differentiation does not [...] override clear statements of scope in the specification' (reciting The Toro v White Consolidated Industries - see also Retractable Technologies v. Becton, Dickinson & Co.).

Confirming the district court's construction of the term 'alkaline salt' in the '504 patent, the Federal Circuit affirmed the judgment of non-infringement rendered at first instance. In spite of the outcome of the case, AstraZeneca acknowledged that the launch of Hanmi's esomeprazole strontium product is unlikely to significantly affect sales of Nexium, as the former 'is not AB-rated [a designation which certifies that a generic drug meets the necessary bioequivalence requirements and is considered to be therapeutically equivalent] and is not automatically substitutable for Nexium'.

A Scottish Claim Construction Hearing?

Judgment was delivered yesterday by the Outer House of the Scottish Court of Session in Total Containment Engineering Ltd v Total Waste Management Alliance Ltd [2013] CSOH 135 in a matter which may be of great interest to those who love procedural rules as much as they love the substantive law.  The following note has been penned for PatLit by Gill Grassie, a partner in the Scottish IP practice of Brodies LLP (thanks,Gill!).  This is how it goes:

Under Scottish court procedure there is hearing known as a Debate, at which the issues in the case are argued on the basis of what is set out in the pleadings. No evidence is led and the focus is solely on legal arguments. A Debate can be a very effective and cost-efficient tool to decide a case quickly and finally  -- for example on grounds of lack of jurisdiction or title or lack of a relevantly made out case. 

A Debate was employed in this patent case by the alleged infringer to try to secure a dismissal of the action. It argued that the case as pleaded by the pursuer (claimant) on the meaning of the relevant claims meant that those claims did not cover the allegedly infringing equipment and methods. The defender argued that the words in the patent were clear and that their 'obvious meaning' meant there was no infringement as certain integers of the claims in suit were not dealt with in the pleadings. The pursuer's position on the other hand was that it had set out sufficient detail to give scope for a sufficiently wide interpretation of the claims such that the defender's equipment and methods would include every integer and thus infringe. They also argued that it was only appropriate for the court to reach a decision on claim construction after expert evidence was considered.

The IP judge, Lord Malcolm, in a relatively short judgment, agreed with the pursuers, essentially on the basis that it would be inappropriate to decide the meaning of the claims of the patent in this case without some evidence from the skilled man's perspective. There would be the usual opportunity to do this via expert reports, witness statements and other evidence in the lead-up to any Proof (Trial). That should cure any difficulty that there might be with provision to the defender of fair notice of the case against it. On that basis, the application for dismissal was refused and the case will proceed to Trial.

The judge did however also make it clear that in some cases it may be possible for a Debate to be used as a suitable forum to decide the meaning of claims and agree to dismiss a case. These would be where 

'the ordinary meaning of the words used in a patent is so straightforward and clear that the precise basis for a contrary interpretation must be narrated in detail on record (in the pleadings) before an inquiry (a Trial) can be contemplated.' 

Thus there should still be some scope to employ a Debate successfully to get rid of a patent action on the basis of claim interpretation alone.

One further and more general point about this decision is that it demonstrates a willingness by the IP judges to move away from the more traditional approach of insisting on very detailed pleadings which cover all angles to allow a pursuer to proceed to a Trial with evidence etc. This approach is encouraged by the the recently revamped Scottish IP Court management rules. There is much more scope now to rely upon evidence to enlarge upon what is stated in the written case which is a potential benefit. It will tend to speed cases up and will lend itself to costs savings. As long as there is, at the same time, a means to ensure that there is fair notice given of the case to be made at Trial it seems a sensible approach to take to the issue of patent claim interpretation and generally in IP cases as a whole.

Salt, Pepper and Other Ingredients

Many of the cooking recipes in this blogger’s private collection end with „salt, pepper“ without indicating quantities. The skilled houseman or housewife will clearly be able to determine the quantities depending on his or her personal taste and would not contemplate adding ineffective amounts like 5 ppm.

 

This does, however, not apply to the famous person skilled in the art in its interpretation as applied by the EPO.

In the decision T 1009/12 discussed here and here, the claim at issue looked very much like a recipe for a composition, wherein the ingredient distinguishing the claim from the prior art was “an oxidant being selected from nitro aromatic compounds”.

The specification did neither mention any effects of this ingredient nor did the claim specify any minimum amount or maximum thereof to be used. The quantity was left completely open.

The BoA did not consider this feature for the assessment of inventive step:

 According to this open definition the presence of a very small amount of e.g. 5 ppm of said oxidant is sufficient to meet the condition of claim 1 of the first auxiliary request. However, the Board considers that such a low concentration will not cause any effect in view of the common general knowledge of a chemist and the intended purpose of an oxidant. Particularly in the light of the most general range of the oxidant of from 0.1-25 g/l (corresponding to 100-25000 ppm) disclosed in the present application […] it is not reasonable to expect any effect of the nitro aromatic compound in such a low concentration.

Therefore claim 1, which does not specify any concentration ranges of the four components at all, is considered to cover embodiments where the mere presence of the nitro aromatic oxidant compound will not produce any effect at all.

And further below:

Since process claim 1 includes silver plating compositions including unspecified, therefore also ineffective concentrations of the nitro aromatic oxidant (see points [2.3.3] and [2.4] above) this feature can only be considered as an arbitrary feature, because it is not credible that it contributes to the solution of the underlying technical problem. The Board therefore does not further consider it. (emphasis added)

The implication for the practice is that giving minimum (and maximum) values as well as the associated effects for any ingredient of a composition in the specification and claims as originally is highly recommendable. Failure to do so might result in the feature being completely disregarded in the assessment of inventive step.

The full text of the decision can be found here.

The infringer hasn't been born -- and the judge wasn't born yesterday

The Patents Court for England and Wales gave judgment today in ConvaTec Ltd and others v Smith & Nephew Healthcare Ltd and others [2011] EWHC 2039 (Pat), an infringement-and-validity trial heard by the Patents County Court's Judge Birss, sitting as a High Court judge.

The most interesting thing about this fairly unexceptionable case (from this blogger's point of view is an observation made by the judge in the context of claim construction. At paragraph 68 he said:

"In my judgment both sides' original arguments risk committing the fallacy warned against in Nobel v Anderson (1894) 11 RPC 519. A patent is to be construed as if the infringer had never been born".

This point must be one that is at the forefront of British judges' minds of late, since the same principle was cited almost exactly a month ago by Mr Justice Floyd in Cephalon v Orchid & Mylan [2011] EWHC 1591 (Pat), (noted here), in paragraph 35 of his judgment.  Counsel, take note!

Claim construction post-Protocol amendments: no change

Ancon Limited v ACS Stainless Steel Fixings Limited [2009] EWCA Civ 498, a decision of the Court of Appeal for England and Wales, is what one might call a "minor appeal". The patent which was allegedly (i) infringed and (ii) invalid, depending on which side you are on, was low-tech. The trial judge was not one of the more techie members of the Patents Court and the appellate judgment, inclusive of a lengthy summary of the principles of claim construction, barely topped 30 paragraphs.

The Court of Appeal, consisting with the parties' agreement of an even number of judges (Lords Justices Waller and Jacob) since the third member of the court was unwell, allowed the claimant's appeal against a finding that the contested patent was not infringed [for a note on the first instance decision click here]. Nonetheless the decision contained something of broad value to patent litigators: an affirmation that the new-style Protocol to Article 69 of the European Patent Convention was not intended to have the effect of expanding the scope of infringement so as to include matters that might have remained non-infringing under the old version. As Jacob LJ said at para. 3:

"Ancon say that the Judge construed claim 1 (the only claim that need be considered) too narrowly. ACS say he was right. So the whole question essentially turns on the proper construction of claim 1. In their skeleton argument for Ancon Mr Daniel Alexander QC and Mr James St. Ville tentatively advanced a further argument – that even if the claim as properly construed did not cover the ACS assembly, there was infringement nonetheless by virtue of the amendments made to Art 69 of the EPC and the Protocol thereto in 2000. In the event it is not necessary to consider this argument. All I would say is that has considerable difficulties both because our House of Lords has indicated it makes no difference ... and because a trawl through the travaux préparatoires to the EPC 2000 does not show a clear intention to change the law".

Purposive, not linguistic interpretation is the right way, says Deximune judge

Today's decision of Mr Justice Arnold in Novartis AG v Dexcel-Pharma Ltd [2009] EWHC 336 (Pat), Patents Court, England and Wales, has been posted on the BAILII website -- you can read it here. In a judgment that focused mainly on the evidence and was that was not at first glance legally controversial, Arnold J concluded that the defendant's Deximune product would infringe Claims 1 and 48 of Novartis's patent for "pharmaceutical compositions comprising cyclosporins". Note: in earlier proceedings Floyd J had already granted interim relief.

One point to note here is that the judge rejected the defendant's construction as being

"flawed because it is based on linguistic analysis rather than consideration of the technical purpose of the elements of the claim".

The skilled reader, he added,

"would not disregard the patentee's use of the word phase or the statement that the hydrophilic and lipophilic phases are non-miscible, but [would read] that statement in the context of the specification and having regard to the inventor's purpose he would understand that non-miscibility was required in the microemulsion but not in the pre-concentrate".

This would seem to be the correct approach: the skilled reader should not be regarded as embarking on a dry, linguistic interpretational exercise since that would not be the context in which he would ever come to read the patent in the first place.