On April 29, 2022, the Court of Appeals for the Federal Circuit issued an opinion for Sunoco Partners Marketing & Terminals L.P. v. U.S. Venture, Inc., U.S. Oil Co., Inc. (2022 WL 1275697).This case touched on a number of issues, including experimental-use doctrine, on-sale bar, infringement and damages awards. In this article, we will focus on the experimental-use doctrine and the on-sale bar.
As background, Sunoco’s patents were directed to a system and method for blending butane with gasoline at a point close to an end of the distribution process – in particular, the point immediately before being distributed to tanker trucks. Accordingly, producers could blend the maximum allowable butane into each batch of gasoline based on location and time of year. Both the location and time of year were subject to certain regulatory requirements.
This morning, the Supreme Court called for the views of the Solicitor General on the pending petition for writ of certiorari in Abitron Austria GmbH v. Hetronic International, Inc. In Abitron, the Court of Appeals for the Tenth Circuit allowed the plaintiff trademark owner to recover damages not only for the defendants’ sales of infringing products in the U.S., but also for the defendants’ infringing sales outside the U.S. to non-U.S. customers. Even those non-U.S. sales, the Tenth Circuit reasoned, “diverted tens of millions of dollars” of revenue “that otherwise would have ultimately flowed into the United States.” The Tenth Circuit further rejected the defendants’ argument, based on Fourth Circuit law, “that the diversion-of-sales theory is inapplicable to foreign defendants.”
A party sued for patent infringement may seek to shift some or all of its liability through an indemnification claim. While a patent infringement defendant may seek to implead an indemnitor under Rule 14 of the Federal Rules of Civil Procedure, a recent Eastern District of Kentucky decision is a reminder that third-party complaints are limited to claims seeking to shift liability for the underlying patent infringement claim. Linda’s Leather, LLC v. Zambrano, No. 5:21-CV-046-CHB, 2022 WL 100216 (E.D. Ky. Jan. 10, 2022).
Linda’s Leather, LLC, accused Victor Zambrano of patent infringement. Zambrano subsequently filed a third-party complaint against Linda Scott, the sole member of Linda’s Leather and identified as the sole inventor on the asserted patents. Zambrano asserted four declaratory judgment claims in his third-party complaint, stating that the patented inventions were a result of work done by Scott for Zambrano, making him at least a joint inventor on the patents, that his products did not infringe, and, in the alternative, that the patents were invalid and that he had a license. Each was dismissed.
World Intellectual Property Day is again upon us. While last year’s theme focused on IP for small businesses, the focus this year is on celebrating youth-led innovation and creativity. With the increased consumption of media and the ease of creating and publishing content on various social media platforms, the time couldn’t be better for such a celebration.
Today’s youth are increasingly creating IP-protected content. Some platforms count youth, even those as young as age 7, as their biggest earners: They have built followings through content creation, created brands and then further leveraged the value already created to extend their brands into merchandising and non-fungible tokens, for example. But whether they understand their rights – what rights they have and what rights they can and often do sign away – is a different story. This is reason enough to dedicate this year’s World IP Day to helping young people find out how IP rights can support their goals. That way, they understand the rules that allow them to leverage their content into profit.
Effective March 29, 2022, the United States Patent and Trademark Office (USPTO), the Japan Patent Office (JPO) and the Korean Intellectual Property Office (KIPO) will accept a new combined petition option to participate in the Expanded Collaborative Search Pilot (CSP) program. The Expanded CSP program is currently active through Oct. 31, 2022, with each intellectual property (IP) partner office granting only 400 petitions per year. The new combined petition option (and the original petition option) offers an easy path to expedite initial examination of a patent application under “special” status without incurring government fees or fulfilling other requirements under 37 CFR § 1.102.
On February 24, 2022, the world watched in horror at Russia’s unprovoked invasion of Ukraine. Lost in the destruction and devastation inflicted on Ukraine and her people, is Russia’s effective nationalization of patents in Russia with owners in foreign countries that Russia deems to be unfriendly.
Article 84 of the European Patent Convention (EPC) requires that the claims of a European patent application “shall define the matter for which protection is sought” and “shall be clear and concise and be supported by the description.”[i] To assist practitioners and patent examiners, the European Patent Office (EPO) provides patent examination guidelines interpreting the EPC. Recently, the EPO updated these guidelines, including Guideline F-IV 4.3, which interprets the requirements of EPC Article 84. New Guideline F-IV 4.3 provides strict description (i.e., specification and drawings) amendment requirements by providing that “[a]ny inconsistency between the description and the claims must be avoided if it could throw doubt on the subject-matter for which protection is sought and therefore render the claim unclear or unsupported under Art. 84,” such as where “[p]art of the description and/or drawings is inconsistent with the subject-matter for which protection is sought.”[ii] This may occur where parts of the description are not encompassed by the wording of the claims or are inconsistent therewith, such as may reasonably result from making amendments to the claims that are narrower than the full scope of the original description. In such situations, Guideline F-IV 4.3 specifically instructs that “[t]he applicant must remove any inconsistencies by amending the description either by deleting the inconsistent embodiments or marking them as not falling within the subject-matter for which protection is sought.”[iii]
In Adapt v. Teva, the Federal Circuit affirmed the district court’s findings that methods of administering a naloxone nasal spray formulation were invalid as obvious. The decision, which the Court notes was a “close case,” reminds us how difficult it is to show non-obviousness of pharmaceutical formulations and their use.
The patents at issue relate to a method for treating opioid overdose by intranasal administration of naloxone. Naloxone—the active ingredient in NARCAN®—was historically administered by injection or intranasally using the Mucosal Atomization Device (MAD Kit), but each method had disadvantages. The injection could only be performed by trained medical personnel and the MAD Kit required assembly prior to use and delivered too much fluid into the nose. In the midst of the opioid addiction crisis, the Food and Drug Administration held a public meeting to encourage the industry to develop an intranasal naloxone product that would be comparable to the injectable naloxone products.
The issues on appeal relate to the formulation limitations as recited in claims 1 and 2:
1. A method of treatment of opioid overdose or a symptom thereof, comprising nasally administering to a patient in need thereof … a pharmaceutical composition which is an aqueous solution of about 100 μL comprising: about 4 mg naloxone hydrochloride or a hydrate thereof; between about 0.2 mg and about 1.2 mg of an isotonicity agent; between about 0.005 mg and about 0.015 mg of a compound which is at least one of a preservative, a cationic surfactant, and a permeation enhancer; between about 0.1 mg and about 0.5 mg of a stabilizing agent; and an amount of an acid sufficient to achieve a pH of 3.5-5.5.
2. The method as recited in claim 1 wherein: the isotonicity agent is NaCl; the preservative is benzalkonium chloride; the stabilizing agent is disodium edetate; and the acid is hydrochloric acid.
The district court found the claims obvious based on several prior art references, and the Patent Owner appealed. The Federal Circuit affirmed the district court’s obviousness analysis, focusing on three tenets of the obviousness inquiry: 1) motivation to combine, 2) teaching away, and 3) objective indicia of non-obviousness.
Motivation to combine
It is axiomatic that an obviousness finding requires that a person of ordinary skill in the art must have been “motivated to combine or modify the teachings” in the prior art. Here, the Federal Circuit agreed that there was motivation to make improvements to the MAD Kit because its shortcomings were well known.
In addition, the district court found that a person of skill in the art would have been motivated to use each of the claimed excipients since the MAD Kit was not optimized for intranasal administration. It was desirable to make the formulation more acceptable and tolerable in the nose by modifying the tonicity and pH. For example, the claimed sodium chloride excipient is a well-known tonicity agent; likewise, hydrochloric acid is well-known for adjusting the pH.
Even though there was no express suggestion in the prior art to select the specific combination and concentration of components, the Federal Circuit agreed that sufficient motivation existed to support the district court’s finding that arriving at the claimed concentration ranges for each of the “well-known” excipients would have required no more than routine optimization.
The Patent Owner also tried to convince the Court that the prior art’s disclosure of naloxone’s degradation in a 0.125% w/v BZK formulation constituted a “teaching away” from the use of BZK in a naloxone intranasal spray. Patent Owner urged the Court to apply the legal standard that a “reference teaches away if a POSA ‘upon reading the reference, would be discouraged from following the path set out in the reference, or would be led in a direction divergent from the path that was taken by the applicant.’” The Federal Circuit upheld the district court’s findings and applied a corollary, the legal standard urged by Patent Owner: “[A] reference does not teach away if a skilled artisan, upon reading the reference, would not be ‘discouraged from following the path set out in the reference,’ and would not be ‘led in a direction divergent from the path that was taken by the applicant.’”
Here, the Federal Circuit found that there was no clear error in the district court’s finding that the one report of naloxone degradation in a high concentration of BZK would not have discouraged the skilled artisan from using BZK in an intranasal naloxone formulation, especially since BZK has been used with naloxone at lower concentrations similar to those claimed and it is the most commonly used preservative in nasal sprays.
Objective indicia of non-obviousness
The Patent Owner argued that the district court committed legal error by not considering objective indicia of non-obviousness before it found the claims obvious. The Federal Circuit disagreed, finding that the district court properly considered all objective indicia of non-obviousness before arriving at its conclusions. The Federal Circuit addressed the indicia of non-obviousness argued in this case: unexpected results and long-felt but unmet need.
While unexpected superior results are very commonly used indicia of non-obviousness, the court didn’t find that the asserted results were actually unexpected. Expert testimony explained that using BZK “would increase the relative bioavailability of the formulation because BZK was a known permeation enhancer.” As such, the Patent Owner’s results of 56% increase in bioavailability were only a difference in degree, not kind, and so were not unexpected.
The Patent Owner convinced the Court that the district court erred in finding that there was a long-felt need for an easy-to-use intranasal naloxone product. The district court had said that while the product may be an improvement over the MAD Kit, it did not fill a significant long-felt but unmet need because it was known to be safe and effective. But the Federal Circuit reasoned that the district court was taking inconsistent positions. If there was no long-felt but unmet need because the need was met by the MAD Kit, then it doesn’t make sense that the deficiencies in the MAD Kit also provided motivation for a skilled artisan to combine the prior art references to arrive at the claimed invention. Nonetheless, this error was not sufficient to overcome the strong case of obviousness.
All in all, obviousness determinations require the balancing of multiple factors in multiple rationales. With no clear error in the district court’s factual findings and a sufficient factual record, it would not reconsider the evidence on appeal. This was a close case, and since the Federal Circuit is “a court of review, not a court of first resort,” its review is limited. Therefore, it affirmed the district court’s judgment that the claims are invalid.
 Adapt Pharma Operations Limited v. Teva Pharmaceuticals USA, Inc., Appeal No. 2020-2106, at 12 (Fed. Cir. Feb. 10, 2022).
In two recent decisions, the Trademark Trial and Appeal Board (TTAB) made it abundantly clear that attempting to register a mark for ingestibles containing cannabidiol (CBD) likely will be an exercise in futility.
In In re Harbor Hemp Company LLC, SNs 88377702 and 88377730 (TTAB Jan. 27, 2022) [not precedential] and In re AgrotecHemp Corp., SN88979905 (TTAB Feb. 10, 2022) [not precedential], the TTAB uniformly held that the applicants in those cases did not have a bona fide intention to use their marks in commerce for such goods.
Recently the Federal Circuit reversed a district court’s grant of summary judgment of no invalidity of a design patent under the on-sale bar provision of 35 U.S.C. § 102. Junker v. Medical Components, Inc., No. 2021-1649 (Fed. Cir. Feb. 10, 2022). The Federal Circuit agreed with defendants-appellants (collectively, MedComp) that a pre-critical date letter, i.e., one year prior to a patent application’s filing date, constituted a commercial offer for sale since it included pricing, delivery conditions and risk allocation terms despite multiple uses of the term “quote” therein. Specifically, the Federal Circuit indicated, “the terms of the communication must be considered in their entirety to determine whether an offer was intended, or if it was merely an invitation for an offer or further negotiations.” Id. at 13.
In 2013, Larry Junker sued defendants for infringing US D450,839 (the D’839 Patent), in the U.S. District Court for the Eastern District of Pennsylvania. In 2017, after much discovery, the parties filed cross-motions for summary judgment. Arguably, the most important issue was whether a Jan. 8, 1999 letter before the D’839 Patent’s critical date, i.e., Feb. 7, 1999, was a commercial offer for sale of a product embodying the claimed design. See Detailed Timeline below for complete history. While the District Court acknowledged the Jan. 8, 1999 letter included specific commercial terms directed to payment, shipping and delivery conditions, suggesting a commercial offer for sale, it ultimately determined other language in the letter, including plural uses of the term “quotation” and an invitation to further discuss specific requirements, suggested the parties were engaged in preliminary negotiations. After a bench trial on the remaining issues in the case, the District Court found MedComp’s accused products willfully infringed the D’839 Patent and awarded Junker over $1.2 million in damages. Defendants appealed to the Federal Circuit. Continue Reading