“All Expenses Paid” Is No Trip to the E.D. Va. for Patent and Trademark Applicants

Authored by: Kristie Butler, Summer Associate

On June 23, 2017, the Federal Circuit confirmed in Nantkwest, Inc. v. Matal (No. 2016-1794) that patent applicants facing rejection from the Patent Trial and Appeal Board (PTAB) may seek relief in the Eastern District of Virginia under 35 U.S.C. §145, but ruled that these litigants must pay the USPTO’s attorneys’ fees, regardless of their cases’ outcomes. Section 145 provides that “[a]n applicant dissatisfied with the decision of the [PTAB]…may, unless appeal has been taken to the United States Court of Appeals for the Federal Circuit, have remedy by civil action against the Director in the United States District Court for the Eastern District of Virginia.… All the expenses of the proceedings shall be paid by the applicant.”

In Nantkwest, the applicant argued that the presumption against an award of attorneys’ fees under the “American Rule” (i.e., each party pays its own costs) could only be overcome if an express provision in either a statute or contract were present, and the “all expenses” provision in § 145 did not include attorneys’ fees. The appellant further argued that Congress would have specified attorneys’ fees in the statute if they were meant to be included. The Federal Circuit was not persuaded that the American Rule applied and disagreed with the applicant’s interpretation after analyzing prior cases, definitions from legal dictionaries and treatises, and Supreme Court precedent, and interpreted the “all expenses” provision of the statute broadly to include attorneys’ fees. And because “all expenses” had already been interpreted by the Federal Circuit to apply to all cases, regardless of their outcomes, the USPTO’s attorneys’ fees must be borne by the applicant, regardless of whether the applicant prevails in the civil action. Continue Reading

The Supreme Court Delivers a Win for Biosimilar Manufacturers in Sandoz v. Amgen

On June 12, 2017, the Supreme Court issued a unanimous opinion in Sandoz v. Amgen, interpreting key provisions of the Biologics Price Competition and Innovation Act (BPCIA) in favor of biosimilar manufacturers (applicants).[1] In particular, the Court held that (1) a federal injunction is not available to compel biosimilar applicants to disclose application and manufacturing information as contemplated by the BPCIA, and (2) biosimilar applicants may provide statutory 180-day notice of commercial marketing after or before receiving FDA approval.

The BPCIA “patent dance”

The BPCIA was approved by Congress in 2010 for the purpose of creating an abbreviated approval pathway for biosimilars, or follow-on biologics. In contrast to conventional chemically synthesized drugs, biologics are isolated from natural sources such as animals or microorganisms and may include such diverse products as vaccines, recombinant proteins or somatic cells.[2] Biosimilar manufacturers may take advantage of the BPCIA’s abbreviated approval pathway to piggyback on the safety, purity and potency showings of a previously licensed reference product. In exchange, the BPCIA allows for up to 12 years of regulatory exclusivity for the reference product after the date the product was first licensed, regardless of whether there is patent protection.  Continue Reading

Supreme Court Finds Lanham Act Disparagement Clause Unconstitutional Under First Amendment

In a victory for the Asian-American rock band The Slants, the Supreme Court ruled on June 19 that the ban on the registration of disparaging trademarks under Section 2(a) of the Lanham Act violates the First Amendment.

The ruling follows a lengthy battle by The Slants as to whether it could obtain a federal trademark registration for its name, which the U.S. Patent and Trademark Office (“USPTO”) found “disparaging” under U.S.C. §1052(a) (“Section 2(a)”). As we discussed previously in a post about The Slants’ Federal Circuit case, Section 2(a) permits refusal of registration of a trademark that “[c]onsists of or comprises immoral, deceptive, or scandalous matter; or matter which may disparage or falsely suggest a connection with persons, living or dead, institutions, beliefs, or national symbols, or bring them into contempt, or disrepute.” In determining whether a mark is disparaging under this section, the USPTO considers the meaning of the mark in common parlance and whether that meaning may be disparaging to a substantial composite of the group referenced by the mark. Continue Reading

PTAB Grants Discovery to Underlying Test Data

Discovery in inter partes review (IPR) proceedings at the Patent Trial and Appeal Board (PTAB) is typically quite limited, and the PTAB normally is reluctant to grant motions for additional discovery. It is instructive, therefore, when the PTAB does so. In a recent order in Mylan Pharmaceuticals Inc. v. Allegan, Inc., IPR2016-01127, Paper 28 (PTAB May 31, 2017) (Order), the PTAB granted a motion in part for additional discovery for pharmacokinetic (PK) data underlying figures in certain exhibits that had been submitted in Rule 132 declarations during the prosecution of one of the patents-at-issue, U.S. Patent No. 8,685,930. In particular, declarations of Drs. Schiffman and Attar were said to include figures used to allege the criticality of, and unexpected results from, a claimed formulation to treat dry eye, also known as keratoconjunctivitis sicca (Paper 27 at 2). After going through the Garmin factors, the PTAB ultimately allowed the additional discovery in part (Order at 3-5).[1] Continue Reading

Equivalence in Chemical Cases

In Mylan Institutional LLC et al. v. Aurobindo Pharma Ltd. et al., 2017-1645 (May 19, 2017), the Federal Circuit attempted to clarify the application of the doctrine of equivalents in chemical cases. Although affirming a district court grant of a preliminary injunction on a patent directed to isosulfan blue (ISB), a dye used for lymph node mapping, the court reversed the grant of the injunction to the extent it was based on two process patents. According to the Federal Circuit, the district court erred in determining that Mylan had demonstrated a likelihood of success in showing that Aurobindo infringes U.S. Patent 7,622,992 (the ’992 patent) and U.S. Patent 8,969,616 (the ’616 patent) because “the district court’s analysis of equivalence in this case was flawed.” Slip opinion at 12.

The ’992 and ’616 patents claim a process for preparing ISB comprising reacting isoleuco acid with silver oxide, recovering the ISB acid and treating the ISB acid with a sodium solution. Aurobindo’s process (the accused process) for preparing ISB differs from the patented process in that manganese dioxide is used in place of silver oxide as an oxidizing agent. The district court found that the accused process likely infringed the patented process under the doctrine of equivalents. Aurobindo argued on appeal that the district court erred, because manganese dioxide is a strong oxidizing agent that requires use of an acid, whereas silver oxide is a weak oxidizing agent that does not require an acid. Thus, according to Aurobindo, manganese dioxide and silver oxide oxidize isoleuco acid in different ways. Mylan countered, arguing that in the context of the process patents, silver oxide and manganese dioxide are equivalent. Mylan supported its assertion with expert testimony that the crude ISB yield from both the silver oxide and manganese dioxide processes is similar, a result that Mylan contended would not be expected if silver oxide and manganese dioxide were substantially different. Continue Reading

As FDA Ramps Up Digital Health Program, BakerHostetler Hosts a Medical Device Connectivity Webinar Addressing Digital Technology Considerations

Recent reports indicate that Food and Drug Administration (FDA) plans to build a digital health unit within and assign a number of digital scientists to the Center for Devices and Radiological Health. The digital health unit addresses the proliferation of digital technology and software being used in the medical community, specifically in medical devices. As connected medical technology grows well beyond digital step counters and heart rate monitors, FDA has reacted with greater interest and regulation. The pace of technology in this area has accelerated with the advent of cloud computing and viable artificial intelligence. Companies are now offering highly sophisticated medical devices with technology to promote individualized health outcomes and to aid in self-monitoring. Health care institutions leverage patient data and artificial intelligence to identify new health care risks, make diagnoses and provide better healthcare services. These types of tools are something that FDA has been aware of and has taken an interest in, but it has struggled to keep pace. FDA’s Digital Health Program, “which seeks to better protect and promote public health and provide continued regulatory clarity,”[1] and staffing additions look to change that.     Continue Reading

GOOGLE Mark Is Not a Victim of Genericide

On May 16, 2017, internet search engine and content provider Google Inc. was handed a win by the United States Court of Appeals for the Ninth Circuit in Elliot v. Google Inc. The court ruled that the GOOGLE trademark had not become a victim of genericide, unlike other now generic terms such as ASPIRIN, CELLOPHANE and THERMOS. A copy of the court’s decision can be found here.

The case was filed by David Elliot and Chris Gillespie, who had registered 763 domain names that combined the word “google” with other specific brand, person or product names. After Google successfully challenged those registrations through the National Arbitration Forum for violations of the Uniform Domain Name Dispute Resolution Policy, Elliot and Gillespie filed a lawsuit seeking cancellation of two GOOGLE trademark registrations (U.S. Reg. Nos. 2884502 and 2806075) before the United States District Court for the District of Arizona. The district court refused cancellation and granted summary judgment in Google’s favor. Continue Reading

Registration of “Phantom Marks” Denied

“Phantom marks” are trademarks that contain a variable element, such as the mark T.MARKEY TRADEMARK EXHIBITION 2***, in which the asterisks represent elements that change to indicate different years. Trademark Manual of Examining Procedure (TMEP) § 1214.01 (Apr. 2017). While a phantom mark refusal would not be necessary in this example, the Trademark Office generally refuses the registration of phantom marks because they fail to “give adequate constructive notice to third parties as to the nature of the mark and a thorough and effective search for conflicting marks is not possible.” TMEP § 1214.01. Additionally, phantom marks often result in the registration of more than one mark, violating the requirement that “a trademark application may only seek to register a single mark.” Id. at § 807.01 (emphasis added).  Continue Reading

Impression Products, Inc. v. Lexmark International, Inc. – Setting the Common Law’s Limits on the Rights of Patent and Copyright Owners

 

Last week, in Impression Products, Inc. v. Lexmark International, Inc., Case No. 15-1189 (May 30, 2017), the Supreme Court ruled that under the “exhaustion doctrine,” patent owners cannot use patent law to impose restrictions on the downstream sales or transfers of lawfully purchased patented goods. The decision took many patent practitioners by surprise. Not only did the Court reverse an en banc decision of the Federal Circuit, but it overturned the widespread view that patentees could enforce post-sale restrictions on the use or resale of patented products through patent infringement lawsuits so long as the post-sale restrictions were “clearly communicated.”

For copyright lawyers, however, the “exhaustion” restrictions the Court imposed on patentees were already familiar: they are the same ones the Court imposed four years ago on copyright owners under the Copyright Act’s first sale doctrine, 17 U.S.C. § 109(a). See Kirtsaeng v. John Wiley & Co., Inc., 568 U.S. 519, 538 (2013) (Court rejects imposition of geographical restrictions on the application of the first sale doctrine on the ground that it contradicts “the very basic concept of copyright law that, once you’ve sold a copy legally, you can’t restrict its resale.”)  Indeed, Chief Justice Roberts’ near-unanimous opinion[1] for the Court in Impression Products emphasized that patent law’s exhaustion doctrine and the Copyright Act’s first sale doctrine derive from a shared lineage, namely, “the ‘common law’s refusal to permit restraints on the alienation of chattels.”  (Opinion at p. 6, quoting Kirtsaeng, 568 U.S. at 538.) As a result, “differentiating the patent exhaustion and copyright first sale doctrines would make little theoretical or practical sense [as] [t]he two share a ‘strong similarity . . . and identity of purpose.” (Id. at p. 14, quoting Bauer & Cie v. O’Donnell, 229 U.S. 1.13 (1913).) In short, the Supreme Court’s Impression Products means that patent and copyright owners will now be subject to the same basic set of “exhaustion” requirements. Continue Reading

Supreme Court Announces ‘Uniform and Automatic’ Rule for Patent Exhaustion

The Supreme Court on Tuesday, May 30, issued an opinion in Impression Prods., Inc. v. Lexmark Int’l, Inc., No. 15–1189 (S. Ct. May 30, 2017), [hereafter “Lexmark”], reversing the Federal Circuit on two aspects of the patent exhaustion doctrine and redefining the boundaries of the rights afforded a patentee under the Patent Act. Chief Justice Roberts authored the opinion, from which Justice Ginsburg dissented in part.

Under 35 U.S.C. § 154(a), a patent grants to the patentee “the right to exclude others from making, using, offering for sale, or selling” the patented invention. Infringement of a patent occurs when “whoever without authority makes, uses, offers to sell, or sells” the patented invention in the U.S., or imports the patented invention into the U.S. during the life of the patent. 35 U.S.C. § 271(a). But a patentee’s right to exclude and ability to obtain damages for infringement are not without limit. The doctrine of patent exhaustion holds that when a patentee sells a patented item, that sale removes the item from the reach of the Patent Act. Lexmark, slip op. at 6. The purchaser is then free to use, sell or otherwise dispose of the item as he or she sees fit, without fear of liability for infringement. Continue Reading

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