Delaware IP Law Blog

Last week, the Federal Circuit reversed Judge Robinson's opinion in Hewlett Packard Co. v. Acceleron, LLC, C.A. No. 07-650-SLR, Memo. Op. (D. Del. Mar. 10, 2009), which we posted about earlier this year. The Fed. Circuit's opinion on this case is particularly interesting because, in their words, it "undoubtedly marks a shift from past declaratory judgment cases." Hewlett-Packard Company v. Acceleron LLC, No. 2009-1283 (Fed. Cir. Dec. 4, 2009).

Judge Robinson had dismissed this declaratory judgment action because "[l]itigation was . . . still too speculative a prospect to support declaratory judgment jurisdiction" when the case was filed. Hewlett Packard, C.A. No. 07-650-SLR at 13. At that time Acceleron had sent a letter to HP asking for "an opportunity to discuss" Acceleron's patent that "relates to Blade Servers." Id. at 1-2.

Acceleron's initial letter suggested that declaratory judgment jurisdiction might be an issue by stating that "we ask that you agree that all information exchanged . . . will not be used for any litigation purposes whatsoever, including but not limited to any claim that Acceleron has asserted any rights against any of your ongoing or planned activities, or otherwise created any actual case or controversy regarding the . . . patent." Id. The Court noted, however, that the letter did not include "a statement of infringement, identification of specific claims, claim charts, prior pleadings or litigation history, or the identification of other licensees," or "directly imply[] impending litigation." Id.

In reversing, the Fed. Cir. held that "The facts of this case, when viewed objectively and in totality, show that Acceleron took the affirmative step of twice contacting HP directly, making an implied assertion of its rights under the ’021 patent against HP’s Blade Server products, and HP disagreed. Therefore, we hold that there is declaratory judgment jurisdiction arising from a 'definite and concrete' dispute between HP and Acceleron, parties having adverse legal interests." Id. at 8-9.

The difference between the Fed. Cir. holding and the District of Delaware holding seems to turn on the degree to which a patent troll must "imply" that litigation was pending - Judge Robinson noted that Acceleron did not "direcly imply[] impending litigation," but the the Fed. Cir. held that Acceleron's "implied assertion of its rights," along with HP's disagreement, was enough.

The Fed. Cir. recognized that "it is implausible (especially after MedImmune and several post-MedImmune decisions from this court) to expect that a competent lawyer drafting such correspondence for a patent owner would identify specific claims, present claim charts, and explicitly allege infringement." Id. at 6. The Court also recognized that legitimate business interactions (such as a patent owner attempting to sell a patent) should not invoke declaratory judgment jurisdiction, id. at 6, but that Acceleron's letter here was no such communication. The letter asserted that its patents were "relevant" to one of HP's product lines and imposed a short deadline to respond. Further, the Fed. Cir. emphasized Acceleron's status as a non-practicing entity: Acceleron's implication of litigation was stronger because it was "a non-competitor patent holding company," and "solely a licensing entity, and without enforcement it receives no benefits from its patents." Id. at 3, 8.

In its conclusion, the Fed. Cir. praised Judge Robinson's opinion, and noted that their reversal represents an actual change in the law:

As the district court recognized in its careful opinion analyzing declaratory judgment jurisdiction, there is no bright-line rule for distinguishing those cases that satisfy the actual case-or-controversy requirement from those that do not. See MedImmune, 549 U.S. at 127. Our decision in this case undoubtedly marks a shift from past declaratory judgment cases. However, MedImmune has altered the way in which the Declaratory Judgment Act applies to patent law cases, requiring that legal interests be evaluated in patent cases under the general criteria of the Act. Our jurisprudence must consequently also evolve, and in this case the facts demonstrate adverse legal interests that warrant judicial resolution.

Id. at 9.

Hewlett-Packard Company v. Acceleron LLC, No. 2009-1283 (Fed. Cir. Dec. 4, 2009)

Magistrate Judge Bongiovanni of the District of New Jersey recently considered Wyeth’s renewed request for the disqualification of Howry LLP (“Howry) as counsel to Boston Scientific Corporation (“BSC”), based on Howry's representation of Wyeth in another matter. Wyeth and Cordis Corp. v. Abbott Laboratories, et al., C.A. No. 08-230-JAP (D.N.J. Dec. 1, 2009). Judge Bogiovanni originally deferred the issue in light of Wyeth's motion for disqualification pending in the District of Delaware before Judge Robinson in a case involving the same parties and Howry LLP. In August, Judge Robinson found that Howry’s representation of BSC violated Rule 1.7. Boston Scientific Corporation, et al. v. Johnson & Johnson, et al., C.A. No. 07-765-SLR, at 7 (D. Del. Aug. 25, 2009). However, Judge Robinson declined to disqualify Howry due to, among other things, the unrelatedness of the BSC matter and the European matter in which Howry represented Wyeth, the fact that Howry’s Washington, D.C. office was representing plaintiffs here whereas Howry’s Europe-based attorneys were handling the matter in Europe, and that an ethical wall was in place. Id. at 8-9. Judge Bongiovanni, however, disqualified Howry on the sole basis of its Rule 1.7 violation. Judge Bongiovanni indicated that in the District of New Jersey the violation of Rule 1.7 should result in automatic disqualification. Wyeth, C.A. No. 08-0230, at 2 (citing In re Cendant Corp. Securities Litig., 1234 F. Supp. 2d 235, 248-50 (D.N.J. 2000) (“New Jersey simply does not permit concurrent representation when the interests of two current clients are adverse.”).

Wyeth and Cordis Corp. v. Abbott Laboratories, et al., C.A. No. 08-230-JAP (D.N.J. Dec. 1, 2009)

In yet another decision addressing the sufficiency of pleading inequitable conduct, the Court found under the new standard set forth in the Exergen case that defendant Cisco's amended claims "pass muster under this rigorous standard" and granted defendant's motion for leave to amend. Cisco Systems, Inc. v. Teles AG Informationstechnologien, C.A. Nos. 09-232-SLR, 09-072-SLR, Memo. Order (D. Del. Oct. 16, 2009). A copy of the amended answer
and its Exhibit A is attached here.

Cisco Systems, Inc. v. Teles AG Informationstechnologien, C.A. Nos. 09-232-SLR, 09-072-SLR, Memo. Order (D. Del. Oct. 16, 2009).

In a recent post-trial opinion, district judge Sue L. Robinson emphasized the importance of a patentee's conduct during prosecution for later claims of infringement. In the underlying action, the patentee alleged that defendant's ANDA product, which covered an oral tablet that dissolved without water, contained distinct disintegrating and swelling agents, as required by the patent.

The Court disagreed, resting its conclusion of non-infringement in part on the patentee's own disavowal of the purportedly infringing disintegrating agent:

"Even if plaintiffs could convincingly show that lactose caused the disintegration of StarLac, the patentee's disavowal of lactose in order to distinguish [the prior art] during prosecution clearly shows that lactose cannot be a disintegrating agent within the meaning of the [patent-in-suit]."

The smoking gun evidence? "[During prosecution,] [t]he patentee chose to distinguish its invention from [the prior art] by arguing that the reference failed to teach 'disintegrating agents . . . . Therefore, if lactose is not a disintegrating agent with respect to the [prior art], it would be improper to characterize it as such in the ANDA products."

Takeda Pharma. Co. Ltd. v. Teva Pharma. USA Inc., C.A. No. 07-331-SLR (D. Del. Nov. 9, 2009) (Robinson, J.).

Judge Robinson recently granted defendant Parallel Networks' motion to sever and transfer third-party defendant Microsoft's declaratory judgment action to the Eastern District of Texas. Judge Robinson cited the judicial vacancy in Delaware and the "undeniable" facts pointing to the Eastern District of Texas as an appropriate venue when holding that "[a]lthough I continue to be amazed by the energy and resources expended on motions to transfer and believe that the way this litigation has unfolded would warrant jurisdiction in Delaware . . . I conclude that Microsoft's declaratory judgment action should be severed and transferred to the Eastern District of Texas." Quinstreet, Inc. v. Parallel Networks, LLC, C.A. No. 06-495-SLR (D. Del. Nov. 3, 2009).

Quinstreet, Inc. v. Parallel Networks, LLC, C.A. No. 06-495-SLR (D. Del. Nov. 3, 2009)

What do you do when a key witness falls ill and is no longer able to testify? Judge Robinson in Genetics Institute, LLC v. Novartis Vaccines and Diagnostics, Inc. excused the inventor/witness from testifying based on a letter from her doctor. She noted, however, that "because it is not clear from the submission how the diagnosed condition is affecting [the inventor's] daily life, sanctions will be imposed against [the defendant] in this case if [the inventor] provides any testimony (through a declaration, a deposition or at trial) in any other case involving the patents at bar." C.A. No. 08-290-SLR, Order (D. Del. Oct. 23, 2009). She further stated that "[d]epending on the circumstances, I would consider sanctions ranging in severity from the imposition of an adverse inference to the imposition of the costs of a new trial to the imposition of an adverse judgment." Id.

Genetics Institute, LLC v. Novartis Vaccines and Diagnostics, Inc., C.A. No. 08-290-SLR, Order (D. Del. Oct. 23, 2009).

On Monday, Judge Robinson issued a thorough, lengthy opinion resulting from a patent infringement bench trial where Judge Robinson found in favor of plaintiff Alcon, despite several claim construction and validity arguments by defendant Teva. Alcon, Inc. v. Teva Pharmaceuticals USA, Inc., Civ. No. 06-234-SLR (Oct. 19, 2009). Teva had filed an Abbreviated New Drug Application (“ANDA”) “to market a generic version of the antibacterial drug VIGAMOX® proprietary to plaintiffs.” Id. at 1. VIGAMOX is an antibiotic, and its active ingredient, moxifloxacin hydrochloride, is protected by Patent No. 6,716,830, according to Alcon. Teva’s submission of an ANDA is an act of infringement, id. at 14, so the two issues in this case were (1) claim construction (whether the Teva’s generic is covered by the Alcon’s patent) and (2) validity.

Claim construction turned solely on the definition of “moxifloxacin” as used in claim 1 of Alcon’s ‘830 patent. Id. at 14-15. Both Teva’s generic and Alcon’s patent include “moxifloxacin” as the active ingredient, but Teva argued that Alcon’s patent had redefined “moxifloxacin” to mean something narrower than the ordinary industry understanding of that term. According to Teva, “because the specification . . . provides an alternate meaning for the claim term ‘moxifloxacin’ in the form of the depiction of a structurally different compound, the ordinary meaning of moxifloxacin has been displaced.” Id. at 18. Teva further argued that the specification referred to a “new class of antibiotics,” and that quinolones, the class to which moxifloxacin belongs, “were not a new class of antibiotics; therefore, the subject matter of the ‘830 patent must be directed to a different family of compounds.” Id. The court rejected each of these arguments, because “[t]he record before the court is replete with instances in which Teva’s proposed construction is at odds with the specification of the ‘830 patent so as to cause an absence of the . . . clarity, deliberateness and precision” required for a patentee to “act as his own lexicographer.” Id. at 18-19.

The validity analysis started with anticipation, which focused on a prior patent. Id. at 21-26. The prior patent disclosed a similar moxifloxacin composition, but at a different concentration range. Id. at 24-25. The ‘830 patent claimed a concentration range of “0.1 to 1.0 wt%,” while the prior patent’s range was “0.5 to 99.5 wt%.” Id. The court held that the prior patent did not anticipate the ‘830 patent, based on a genus/species analysis of the “range disparity” between the claimed and disclosed concentration numbers. Id. at 25. The court also rejected Teva’s argument that the prior patent had an “inherent range” that extended below the explicitly disclosed range. Id. at 26.

The court then addressed obviousness. Teva argued “that a motivation to combine exists inasmuch as moxifloxacin would have been ‘obvious to try’ in a topical ophthalmic composition, due to both market pressure and the existence of ‘a finite number of identified, predictable solutions’ to treat ophthalmic infections,’” and further that a person of ordinary skill in the art would have expected the combination to have desirable properties. Id. at 28. The court rejected each of these arguments, holding that “the record indicates anything but a finite number of identified, predictable solutions,” and that even if the result of substitution was predictable, that “provides little insight” into the “crucial” question of “whether the prior art motivated a person of ordinary skill to even select moxifloxacin for use in a . . . composition.” Id. at 30. In particular, the court focused on the fact that “the prior art consistently taught away from the use of moxifloxacin” in such compounds, due to its toxicity, poor performance, and ineffectiveness against certain “key” pathogens. Id. at 36, 30-33. Secondary considerations also supported non-obviousness, including initial skepticism by other experts in the field, the long felt need for a compound like this, the commercial success of VIGAMOX(r) (which achieved hundreds of millions of dollars in sales), and some unexpected properties of the invention. Id. at 35-36.

Finally, the court addressed the form requirements for validity, including best mode, written description, and enablement. Teva argued that the inventor had known, but failed to disclose, that the salt form of moxifloxacin was more effective, thus failing the best mode requirement; the court held that the inventor was not subjectively aware of the increased effectiveness of the salt form, and even if he had been, the salt form provides no material improvement anyway. Id. at 39-41. Regarding the written description requirement, Teva claimed that the specification called for a preservative, but the composition claimed did not include one; the court held that the specification encompassed embodiments that did not include a preservative, and thus met the requirement. Id. at 41-44. Finally, as to enablement, Teva asserted that the claim required undue experimentation, based on a lack of process steps in the specification; the court held that a person of ordinary skill in the art could determine appropriate steps and practice the invention.

Alcon, Inc. v. Teva Pharmaceuticals USA, Inc., Civ. No. 06-234-SLR (Oct. 19, 2009)

In Robert Bosch LLC v. Pylon Manufacturing Corp., C.A. No. 08-542-SLR (D. Del. Oct. 19, 2009), Judge Robinson applied the Federal Circuit Exergen decision to Plaintiff’s motion to amend its complaint to add a claim of inequitable conduct. Plaintiff based its motion to amend on the assertion that one of the patent-in-issue’s inventors submitted an affidavit to the PTO containing a misrepresentation regarding the affiant’s review of the related application. Id. at 3. While agreeing with Plaintiff that submitting a false affidavit to the PTO “establishes at least a threshold level of materiality,” Judge Robinson noted that “there was no allegation that the affiant at bar did not contribute to the invention, or that the application that matured into the ‘380 patent contains otherwise false representations.” Id. at 4. Judge Robinson denied Plaintiff’s motion to amend because, under Exergen, she will not allow an inequitable conduct claim “to be pursued after the close of discovery when there are insufficient allegations of underlying facts from which [she] may reasonably infer that the material misrepresentation was made with a specific intent to deceive the PTO.” Id. (emphasis added).

A recent memorandum order by district judge Sue L. Robinson illustrates the importance of supplementing discovery - and the risks of discovery delay. In response to certain allegedly late-produced discovery, the defendants supplemented their contention-interrogatory responses to assert enablement and written-description defenses. The plaintiff objected and moved to strike the new defenses, which came after the supplementation deadline in the scheduling order.

The Court refused to strike the Section 112 defenses on the ground that "[t]he evidentiary basis for the defense rests, in large part, on information within the plaintiff's control." Plaintiff, therefore, "has the opportunity to respond within the context of expert discovery." Although unaddressed in the Court's order, perhaps defendants' explanation that the defenses could not be asserted until they received the belated discovery carried the day.

Smithkline Beecham Corp. v. Barr Pharmaceuticals Inc., C.A. No. 08-112-SLR (D. Del. Sept. 23, 2009) (Robinson, J.).

In Eurand Inc. et al. v. Mylan Pharms. Inc. et al., C.A. No. 08-889-SLR (D. Del. Oct. 1, 2009), Judge Robinson recently granted plaintiffs’ motion to sever and stay discovery on defendants' antitrust and patent misuse counterclaims and affirmative defenses. Although Judge Robinson recently clarified her stance as to bifurcation of damages and willfulness in patent cases, Judge Robinson granted plaintiffs’ motion here because the request was “supported by the promotion of judicial economy and avoiding the injection of complex, unrelated and perhaps unnecessary issues into the patent infringement case.” Id. at 3.

Eurand Inc. et al. v. Mylan Pharms. Inc. et al., C.A. No. 08-889-SLR (D. Del. Oct. 1, 2009)