Four senior cases from last week and why they matter
Last week we reported on three rulings from the US Court of Appeals for the Federal Circuit, and covered the oral hearing in a trademark case involving Christian Louboutin. Below we explain why they matter.
Loopholes after Life Technologies
In February this year, the US’s highest court ruled in Life Technologies v Promega that supplying a single component of a multi-component invention for manufacture abroad does not constitute patent infringement.
In doing so, the US Supreme Court reversed a finding by the US Court of Appeals for the Federal Circuit which had held that a single component was sufficient.
According to Paul Berghoff, founding partner of McDonnell Boehnen Hulbert & Berghoff, the impact of this decision is modest because the dispute does not include commonly occurring facts.
“But the Supreme Court’s decision does create a potential loophole for infringers to gain the benefit of US patented inventions without having to license or pay damages for those inventions,” he said.
Last week, sister site LSIPR reported that the Federal Circuit had reversed its own findings in the dispute, nine months after the Supreme Court’s decision to limit overseas patent infringement.
The court affirmed a Wisconsin judge’s decision to overturn a damages verdict of $52 million in lost profits for Promega.
“Promega’s deliberate strategy to adhere to a single damages theory had the effect of winnowing out from the case any argument about damages based on a figure other than worldwide sales,” concluded Circuit Judge Raymond Chen.
Berghoff offered two pieces of advice to those in a similar situation to this case.
“First, be very thoughtful about what elements you place in your claims during the application process,” he said.
“Second, at trial, prove up your damages with more granularity so that you segregate damages based on wholly US-based activities from damages that have a foreign connection that might run afoul of the Supreme Court’s decision in Promega.”
An overwhelmed court
“The court is undoubtedly overwhelmed with inter partes review (IPR) appeals, however, it seems wrong that after investing the time and effort to develop an orphan drug to treat a disabling disease and to defend its patents protecting that drug, all the company gets is a one-page decision with no insight as to the court’s reasoning or analysis.”
This is the opinion of Patricia Carson, partner at Kirkland & Ellis, in relation to the Federal Circuit’s recent decision in the case of In Re: NPS Pharmaceuticals.
The Federal Circuit affirmed a Patent Trial and Appeal Board decision which found that all of the instituted claims for US patent number 7,056,886 B2, which covers Gattex (teduglutide [rDNA origin]), were unpatentable due to obviousness.
Gattex is used for the treatment of short bowel syndrome.
Kyle Bass’s organisation, the Coalition for Affordable Drugs, had requested the IPR against NPS, which was acquired by Shire in 2015.
In a one-page decision, which Carson believes “underscores the issues that a patent owner faces in trying to overturn an adverse ruling from an IPR proceeding”, the Federal Circuit affirmed the judgment.
“Although the opinion does not explain the summary affirmance, at the very outset of the oral argument in this case, the panel stated the view that it amounted to a ‘battle of experts’ and emphasised the substantial evidence standard of review,” she added.
A practical ruling
On Thursday, WIPR reported that the Federal Circuit confirmed that the Supreme Court’s decision which tightened the rules on patent venue (TC Heartland v Kraft Foods) has changed the law and that the ruling applies to existing cases as well as new ones.
“While providing some guidance on remand of the In re: Micron case and for other pending cases, pointing out the breadth of the district court’s authority, the Micron opinion does not add significantly to the guidance regarding patent venue provided in In re: Cray,” said John Pegram, senior principle at Fish & Richardson.
However, he added: “The Micron decision was a practical one, limited to holding that there was no waiver of venue objections because the objections would not have been recognised by the Federal Circuit before the Supreme Court’s TC Heartland decision.”
Micron Technology had petitioned the Federal Circuit for a writ of mandamus, to set aside a district court’s denial of Micron’s motion to dismiss patent infringement claims or to transfer the case because of improper venue.
Thomas McNulty, of counsel at Lando & Anastasi, added that the case was not a “clean win” for Micron Technology.
“The court remanded the case for consideration of whether Micron’s subsequent venue motion was filed sufficiently soon after the TC Heartland decision so as to preserve the issue, indicating that the district court has discretion under its inherent powers to deem the venue challenge nonetheless waived,” he said in a blog post for the D.Mass. IP Litigation Blog.
“To that end, the court noted that it had denied mandamus in cases where a post-TC Heartland challenge was brought close to trial,” he added.
Louboutin’s trademark journey continues
On Tuesday, WIPR reported that the Court of Justice of the European Union (CJEU) began hearing arguments over whether Christian Louboutin can trademark red soles on high-heeled shoes.
Jonathan Abrams, partner at Gregory, Abrams Davidson, explained that previous rulings for Louboutin have made interesting viewing.
“Anyone who is following the company’s international trademark journeys will recall favourable decisions in China, Australia, Russia, in addition to a setback earlier this year when the Federal Supreme Court of Switzerland decided that the red soles are merely an ‘aesthetic’ element and should not receive trademark protection,” he explained.
He also referenced decisions from New York in 2012 to deny copyright protection but uphold the company’s trademark (as long as the body of the shoe is a contrasting colour).
The pending CJEU decision “will establish a pan-European precedent for both Louboutin and the issues of what constitutes a shape”, he added.
Despite the preliminary assessment appearing to support Louboutin, Abrams said it is unlikely this will be the end of the IP litigation road for the company.
“Judging by their relative litigiousness previously, the brand will continue to fight for protection of its red sole globally,” he said.
“If anything, the current EU case provides another looking glass through which we can see how IP law, especially where it involves attempting to claim a monopoly on a given colour, differs from one jurisdiction to another.
“IP protection will always be a challenge where the colour may be viewed by consumers as simply aesthetic, as opposed to a guarantee of origin, and this seems to be the root cause of the differing international decisions.”
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