April 23, 2014

The Preliminary Injunction Fight in Edwards LifeSciences v. CoreValve

There has been a recent flurry of activity surrounding injunctive relief in the Edwards LifeSciences AG v. CoreValve, Inc. case, which involves aortic heart valve replacement technology. Edwards filed suit in 2008, alleging that Defendants Corevalve and Medtronic infringe its patents. In 2010 a jury returned a judgment of infringement in favor of Edwards against Medtronic, awarding lost profits and reasonable royalty damages, and the Federal Circuit later affirmed. In late 2013, Edwards moved for a preliminary injunction to stop what it alleged would be Medtronic’s infringement once Medtronic obtained FDA approval for its new “CoreValve Generation 3” product. Chief Judge Sleet held an evidentiary hearing on the “public interest factor of the preliminary injunction motion” on April 11 and issued a written decision on April 15 explaining his oral order at the hearing granting in part and denying in part the preliminary injunction. Edwards Lifesciences AG, et al. v. CoreValve, Inc., et al., C.A. No. 08-91-GMS, Memo. at 1-2 (D. Del. Apr. 15, 2014).

Edwards and Medtronic both make transcatheter heart valves that allow implanting of prosthetic aortic valves using a catheter thereby avoiding open heart surgery. The two companies are each other’s only competitors in the United States. Each company manufactured an older, predecessor type of transcatheter heart valve, and each company sought FDA approval of a new type of transcatheter heart valve. Although the FDA had not yet approved the product, the 2010 jury verdict of infringement related to Medtronic’s newer product, the CoreValve Generation 3. Before FDA approval of Medtronic’s infringing product, Medtronic had been able to make it available to patients through a continued access clinical trial. In January, however, the FDA approved the sale of the Medtronic product, which ended the continued clinical trial. Accordingly, Medtronic sought to begin commercially selling its CoreValve Generation 3 product. Edwards expected to obtain FDA approval for its new competing product and begin selling it in the near future as well. Id. at 2-4.

Chief Judge Sleet ultimately granted the motion for preliminary injunction in part. In doing so, he faced several legal and practical issues. With regard to the likelihood of success on the merits, Judge Sleet faced a question regarding enforceability, given that the patent-in-suit had expired in the years since the jury verdict. The FDA, however, had granted an interim extension of patent rights under 35 U.S.C. § 156. Medtronic argued that Edwards’ extension was limited to copies of its old product, not to copies of its new product like Medtronic’s CoreValve Generation 3. Therefore, Medtronic argued, even though its Generation 3 product might infringe the patent-in-suit, it is different from the Edwards product on which the term extension of that patent was based. Judge Sleet did not accept this argument, finding that Section 156(b) addressed approved uses, not approved products. Thus, because the accused Generation 3 product had the same use as the original Edwards approved product, the patent term extension covers it. Thus, having prevailed on infringement and had its patent term extended, Edwards had shown a likelihood of success on the merits. Id. at 5-6.

Judge Sleet also concluded that Edwards had shown irreparable harm through potential price erosion and loss of sales, market share, and revenue. Id. at 6-13. The major argument from Medtronic against irreparable harm was that there exists a “countervailing consideration[] sufficient to trump the mandate that patent rights be enforced.” This public interest consideration is the possibility that enjoining Medtronic would “leave patients so at risk of inferior care or no care at all that the public interest requires Medtronic be allowed to sell the CoreValve Generation 3.” Id. at 13-14. Medtronic essentially argued that its product was a safer, superior alternative to Edwards’ products and that it should be permitted to continue selling its product to a class of patients regarded as “extreme risk” because in some cases those patients could not be helped by Edwards’ existing product or in other cases could not be helped by either Edwards’ existing product or its product being approved by the FDA. Judge Sleet rejected the first extreme risk patient argument because Edwards’ new product should be approved by the FDA in the near future. But Judge Sleet accepted the second argument, finding that “the public interest requires making some accommodation that would grant patients [who can only be treated by Medtronic’s devices] access to the CoreValve Generation 3.” Thus, Judge Sleet granted the motion for preliminary injunction in part, concluding that the injunction must be tailored because “the public interest weighs in favor of granting Edwards a preliminary injunction, subject to an accommodation for Medtronic to sell its devices to those patients who cannot be helped by Edwards’ devices.” Id. at 14-21.

Judge Sleet also granted Medtronic’s request for “a stay of seven business days to ‘seek emergency relief in the Federal Circuit’ and ‘give hospitals some notice of what ha[d] happened.’” Id. at 2 n.4. Medtronic then filed an emergency motion with the Federal Circuit asking the court to stay the injunction. Medtronic urged the same arguments in the Federal Circuit as it had in the District of Delaware: public interest weighs in favor of denying injunctive relief and the patent is not enforceable because it has expired. The Federal Circuit agreed on April 15 to expedite the appeal and issued a decision on Monday, April 21 staying enforcement of the preliminary injunction. The Federal Circuit panel granted Medtronic’s motion to stay “pending further notice by this court” in a 2-1 order that did not further explain its rationale. Circuit Judges Rader, Prost, and Newman sat on the panel, with Judge Newman dissenting. The Federal Circuit will now review the preliminary injunction on the merits.

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April 21, 2014

Chief Justice Finds Generics’ Entry Into Drug Maker's Exclusive Market Does Not Pose Threat of Irreparable Harm

It is rarely in doubt that a drug-maker has the right to bar generic entry into an exclusive market when the drug-maker's patent is found valid and infringed by a generic applicant, or when such a finding is deemed reasonably likely by the court.

For this reason, it is somewhat surprising that Chief Judge Roberts denied drug-maker Teva's request to reinstate an injunction against generic entry against its Copaxone® drug product to treat multiple-sclerosis. Notably, all of Teva's patents-at-issue will expire at least by September 2015. While the length of remaining patent term could have been a factor in the denial of the request, it is difficult to know. The ruling itself is less than 200 words.

The Chief Justice acknowledged that Teva has shown "a fair prospect of success on the merits," the prong of the analysis that often trips a patentee's application for injunctive relief. Instead, this relief was denied because the alleged availability of money damages for past patent infringement was found adequate. Thus, the Chief Justice explained, "the extraordinary relief that Teva seeks is unwarranted."

While it is very rare for the Supreme Court to reinstitute (rather than continue) a commercial injunction pre-hearing, this decision may spur a certiorari challenge to the long-standing view that drug-makers are typically entitled to injunctive relief against generic entry through patents found valid and infringed, or likely so.

Teva’s “fair prospect of success on the merits” is perhaps more interesting because it suggests the Supreme Court agrees with the original premise of Teva’s petition for certiorari, and will reverse the Federal Circuit’s de novo review standard for at least some matters of claim construction.

The case is Teva Pharmaceuticals USA Inc. et al. v. Sandoz Inc. et al., case number 13-854, in the U.S. Supreme Court.

Click HERE to see the order denying the injunction.

April 18, 2014

Judge Andrews Dismisses Unsupported Willfulness Allegations

Judge Richard Andrews recently granted motions to dismiss claims of willful infringement in two cases brought by Steelhead Licensing LLC. Judge Andrews explained that there was apparently no reason for use of the word “willful” in the complaints because the plaintiff seemed to have no facts in support of an allegation of willfulness. Judge Andrews therefore granted the motions to dismiss willfulness, stating that “Plaintiff, who I would expect might have an interest in moving this case along, puts itself at the mercy of the Defendants, who can stall by making a motion to dismiss, and the Court, whose default decisional standard is LILO.” Steelhead Licensing LLC v. Charter Commc’ns Inc., et al., C.A. No. 13-2075-RGA, 13-2076-RGA, Order at 1-2 (D. Del. Apr. 10, 2014).

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April 16, 2014

Judge Stark grants motion to transfer to the Northern District of California.

Judge Leonard P. Stark recently transferred a case to the Northern District of California based in part on the plaintiff’s actions and representations made to the Judicial Panel on Multidistrict Litigation. Genetic Technologies Ltd. v. Natera, Inc., C.A. No. 12-1737-LPS (D. Del. Apr. 15, 2014). Specifically, the Court noted that “[b]efore the [JPML], [the plaintiff] contended the Northern District was preferable to Delaware as a venue for centralizing pre-trial litigation.” Id. at 3. The JPML declined consolidating the cases into an MDL, leaving the plaintiff litigating in Delaware, North Carolina, New Jersey, and the Northern District of California. Although Judge Stark found that the plaintiff had rational reasons for wanting to litigate this action in Delaware, the Court found that the plaintiff's representation to the JPML, as well as several other Jumara factors (including, notably, the convenience to the parties of litigating in Northern California, where the defendant's principle place of business is located and which is some 2,500 miles closer to the plaintiff's Australian headquarters than Delaware), weighed in favor of transferring the case. Id. at 2-4.

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April 16, 2014

Chief Judge Sleet resolves competing proposals on appropriate post-verdict royalty rates.

Chief Judge Gregory M. Sleet recently issued a memorandum and order resolving a post-trial dispute regarding the appropriate royalty rate to apply to post-verdict infringement. Telcordia Technologies, Inc. v. Cisco Systems, Inc., C.A. No. 04-876-GMS (D. Del. Apr. 14, 2014). The Court previously had found that a permanent injunction was not warranted, and ordered the parties to negotiate the terms of a reasonable royalty rate for post-verdict infringement. Id. at 1. The parties were unable to reach agreement, however, and ultimately submitted competing proposals that amounted to a difference of roughly $8.9 million. Id. at 4.

Chief Judge Sleet noted that royalty rates applied to post-verdict ongoing infringement frequently exceed royalty rates found at trial because of the parties’ changed legal status following a verdict, but that market circumstances also need to be considered in the analysis. Id. at 7. The Court found that the plaintiff was in a stronger bargaining position after prevailing at trial, and on appeal, but was not in a strong enough position to warrant the 3.5% “market rate” the plaintiff proposed with respect to its ‘763 and ‘633 patents (through the expiration of the ‘763 patent, after which the plaintiff proposed a 2% market rate through the expiration of the ‘633 patent). Id. at 8. The defendant proposed an “effective rate” of 0.64% on the two patents. The Court ultimately found that a 1.25% royalty rate on the ‘763 patent, and a 1% royalty rate on the ‘633 patent, were appropriate under the circumstances. Id. at 9.

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April 16, 2014

Judge Andrews Claim Construction Order

Judge Richard G. Andrews construed the following claim terms of U.S. Patents Nos. 6,335,031 and 6,316,023 at issue in the Novartis Pharmaceuticals Corp., et al. v. Alvogen Pine Brook, Inc., et al., C.A. No. 13-52-RGA (consol.) (D. Del. Apr. 7, 2014) litigation:

"antioxidant"
"about 0.01 to about 0.5 percent by about 0.01 to about 0.5 percent by
weight"
"diluent or carrier"
"a/the composition"
"an amount of antioxidant effective to stabilize Compound A from degradation"
"stabilizing"

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April 15, 2014

Judge Robinson sanctions plaintiff for objectively unreasonable claim construction position; grants summary judgment of invalidity.

Judge Sue L. Robinson recently sanctioned a plaintiff for its objectively unreasonable claim construction position. Technology Innovations, LLC v. Amazon.com, Inc., Civ. No. 11-690-SLR (D. Del. Mar. 31, 2014). At issue was the plaintiff’s allegation (later withdrawn following a motion to dismiss and for sanctions) that Amazon.com’s Kindle product infringed the plaintiff’s U.S. Patent No. 5,517,407, titled “Device for including enhancing information with printed information and method for electronic searching thereof.” As the Court explained, “[t]he specification is replete with references to providing ‘enhancing information’ to aid the reader of ‘printed information’ and makes it clear that ‘printed information’ refers to pages provided in a conventional book.” Id. at 22. Further, the “background of the invention indicates that the patentee was concerned with problems associated with printed and electronic indices then available to users of printed publications. . . . The patent distinguishes electronic books from the present invention and points out that ‘they do not enhance printed publications. . . . Additionally, figures 1-8 illustrate a book with printed pages.” Id.

The Court therefore explained that the plaintiff’s “definition for ‘printed’ – to encompass ‘any configuration in which information is presented for direct human perception’ – is astonishingly broad.” Id. at 23. The plaintiff's proposed construction was based on a sentence in the specification referring to a printed work as a "configuration in which information is presented for direct human perception." Id. at 23-24. But the Court noted that the plaintiff ignored the next sentence in the specification, which provided, "[t]hus, for example, in addition to a cloth- (or other hard-) bound, or soft-bound book, work 11 may be a magazine, or other paper based media . . . ." Id. at 24. Finding that it was not objectively reasonable in this case to allege that a Kindle would infringe the '407 patent, the Court sanctioned the plaintiff under Rule 11. Id. at 24.

The Court also granted the defendant’s motion for summary judgment of invalidity of the plaintiff’s remaining asserted U.S. Patent No. 7,429,965, based on indefiniteness.

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April 13, 2014

Judge Robinson construes claim terms

In Intellectual Ventures I LLC v. Canon Inc., et al., C.A. No. 11-792-SLR (D. Del. Apr. 10, 2014), Judge Sue L. Robinson construed a number of claim terms across six patents:

“Selecting for magnification a selected region of an original image in the graphical user interface”

“Floating plane”

“Logical operators to provide different blending/merging effects”

“Means for displaying a composite image ... further wherein individual pixels of the means for displaying can be dedicated simultaneously to both the main image and the representation of at least one input zone”

“layer”

“Enhancement layer having a doping concentration that is less than the first doping concentration”

“image sensor”

“A silicide layer on a portion of the image sensor wherein an area overlying the pinned photodiode is devoid of the silicide layer”

“A field stop layer being formed beneath the field area and being wider than the field area in a direction towards the active area”

“A channel area having a bottle-neck structure connecting to the photodiode area and the floating diffusion area”

“Multi-layer interlayer insulating films ... stacked in at least two layers of oxide film having different density and the refractive index so that the density and the refractive index of the upper interlayer insulating film becomes lower than that of the lower interlayer insulating film as the multilayer interlayer insulating films proceed upward”

“A light shield layer and an element protecting film sequentially stacked on the multi-layer interlayer insulating film”

“Wherein the density of the oxide films becomes higher in the order of PE-CVD

In its Order, the Court also held that certain claims of U.S. Patent No. 6,121,960 were invalid under Section 112. As to the claim term “clear space around a blended area to highlight the area of blending,” the Court found its claim was invalid as lacking written description and as indefinite. See id. at 3-4. The “clear space” limitation only appeared in the claim itself; the portion of the specification identified by plaintiffs in support did not indicate the meaning of this term.

The Court also found other claims of this patent invalid due to the indefiniteness of means-plus-function terms “a computing device for providing a main image" and “means for computing, the means for computing providing a main image.” See id. at 4-9.


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April 11, 2014

Judge Andrews denies partial summary judgment motion of indefiniteness

In a recent memorandum opinion, Judge Richard G. Andrews denied defendant’s partial summary judgment motion of indefiniteness. Pi-Net International Inc. v. JPMorgan Chase & Co., C.A. No. 12-282-RGA (D. Del. Apr. 7, 2014). Given the potential for judicial efficiency, Judge Andrews had granted defendants leave to file their partial motion for summary judgment, in which it was argued that the following five terms, which appeared in several claims of the three patents-in-suit, were indefinite:

(1) "means for transmitting a transaction request from said transactional application";
(2) "means for processing said transaction request";
(3) "a computer system executing the Back-end transactional application for processing the transaction request in real-time";
(4) "keeping a transaction flow captive";
(5) "routed transactional data structure."

Id. at 2. As to the first two terms, defendant argued that the terms were “computer-implemented means-plus-function terms for which no algorithm is disclosed.” Id. Judge Andrews explained that in general, when there exists the “special case where the corresponding structure of a means-plus-function term is a computer, the patent must disclose an algorithm for performing the claimed function.” Id. at 6. Judge Andrews further explained, however, that there is a “narrow” exception to that general rule: the Federal Circuit has held that “it is ‘not necessary to disclose more structure than the general purpose processor’ when the claimed functions ‘can be achieved by any general purpose computer without special programming.’” Id. (quoting In re Katz Interactive Call Processing Patent Litig., 639 F.3d 1303, 1316 (Fed. Cir. 2011)).

As Judge Andrews explained, “[a]t this stage, the Court cannot rule out the possibility that a general purpose computer without special programming could perform the claimed function, or that an algorithm is disclosed.” Id. at 8. Specifically, Judge Andrews explained that defendant argues strenuously that the terms are invalid because the functions at issue require more than simply plugging in a general purpose computer.” Id. at 12. Judge Andrews explained, however, that in order to agree with defendant’s position, “an expert opinion comparing the functional capabilities of a general purpose computer during the relevant time frame with the disputed functionalities might have been helpful.” Id. Defendant, however, did not provide any such opinion. Judge Andrews thus concluded that based on the current record, which lacked “the benefit of a claim construction hearing, it [was] difficult to say that no disputed issue of material fact exists regarding whether the claimed functions could have been performed by a general purpose computer without special programming.” Id. at 13. Judge Andrews additionally noted that even if the exception for a “general purpose processor” did not apply, “the flow chart in Figure 8, common to all three patent specifications, might be sufficient to satisfy the algorithm requirement.” Id. at 12.

As to the third term, Judge Andrews noted in a parenthetical that a court will not construe a limitation as a means-plus-function term if it contains a term that "is used in common parlance or by persons of skill in the pertinent art to designate structure." Id. at 13. As Judge Andrews explained, the claim term at issue included “computer system,” and therefore could not be said to be “devoid of anything that can be construed as structure.”Id. at 15. In other words, “[a] computer system is a physical structure that [was] sufficient to prevent [defendant] from rebutting the presumption” that a term that does not contain the word “means” should not be construed as a means-plus-function term. Id.

As to the last two terms, plaintiff asserted that they were “insolubly ambiguous because the patentee did not define them in the specification or the prosecution history and they do not have a generally accepted meaning to a PHOSITA.” Id. at 2-3. Judge Andrews explained that “[a]lthough it does appear that the link between [plaintiff’s expert’s] cited passages and his proposed definitions is somewhat tenuous in places, there is no competing declaration or affidavit from [a defendant] expert for the Court to rely upon.” Id. at 16. That is, “[w]ithout an opposing expert to identify the deficiencies, if any, in [plaintiff’s expert’s] declaration, it is difficult to say that his opinion regarding a PHOSITA's understanding of the claim language is incorrect.” Id.

In accordance with the analysis above, Judge Andrews denied defendant’s partial motion for summary judgment.

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April 11, 2014

Judge Robinson Denies Motions to Dismiss Based on Lack of Title to Patent-in-Suit

Judge Robinson has issued a decision on several pending motions to dismiss for lack of subject matter jurisdiction in cases filed by plaintiff Data Speed Technology LLC. The moving defendants alleged lack of standing to sue because the plaintiff had not demonstrated that it owns all rights in the patent-in-suit. Judge Robinson ultimately denied the motions, but not before indicating that the chain of ownership of the patent-in-suit was “in a muddle.” The chronology of ownership of the patent-in-suit was complicated, even including litigation over title to the application leading to the patent-in-suit, and Judge Robinson explained the chain of title in depth after pulling relevant facts from several different parties’ submissions. Ultimately, although she found the “efforts of [the inventors] to monetize their invention through [assignment to] another individual . . . [could] be charitably characterized as less than sophisticated,” for the purposes of the motions to dismiss, the chain of title had been sufficiently proven. Data Speed Tech. LLC v. EMC Corp., et al., C.A. No. 13-616-SLR, et al., Memo. at 10 (D. Del. Apr. 8, 2014).

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