Federal Circuit Review - Issue 47
PTO’s Decision to Revive an Application Is Not Subject to Third Party Challenge under the APA
Exela Pharma Sciences, LLC v. Michelle K. Lee, Deputy Director, USPTO, No. 2013-1206, 2015 U.S. App. LEXIS 4895 (Fed. Cir. Mar. 26, 2015) (Per curiam). Click Here for a copy of the opinion.
Exela filed an ANDA seeking FDA approval to market a generic version of Ofirmev. The ANDA included a “paragraph IV Certification” against U.S. Pat. No. 6,992,218. In response, Cadence et al. sued Exela for infringing the ‘218 patent. Exela in turn filed a petition in the PTO, challenging the PTO’s grant of a petition to revive the patent application that led to the ‘218 patent. During prosecution, certain materials were not filed within the 30-month PCT deadline, and the application lapsed. Applicant’s petition to revive the application for “unintentional” delay was granted. The application was examined and ultimately led to the ‘218 patent.
Exela argued that a so-called “unintentional” delay, “was not an available ground for revival of a U.S. patent application claiming priority under the PCT-implementing statute as then in effect.” On the other hand, 35 U.S.C. §371(d) allowed revival of such applications only where non-compliance was “unavoidable.”
The PTO declined to consider Exela’s petition on the basis that “no statute or regulation authorizes third party challenge to a PTO ruling concerning revival of a patent application.” Exela then filed this separate action against the USPTO in the district court under the APA. Cadence intervened. The district court interpreted Exela’s claims as a facial challenge to the USPTO’s regulations and dismissed the case. It found, under the applicable statute of limitations, Exela could not challenge the promulgation of the USPTO’s rules more than six years after they were enacted. Exela appealed.
The Federal Circuit affirmed on the merits. It held: “Congress did not intend to permit judicial review for challenges such as the one brought here.” The Court reasoned that “[t]he Patent Act’s ‘intricate scheme for administrative and judicial review of PTO patentability determinations,’ and ‘the Patent Act’s careful framework for judicial review at the behest of particular persons through particular procedures’ demonstrate that third party challenge of PTO revival rulings under the APA is not legislatively intended.”
Judge Dyk concurred, but expressed his concern for the Court’s decision in Aristocrat Tech. Australia Pty Ltd. v. Int’l Game Tech., 543 F.3d 657 (Fed. Cir. 2008). There, the Court held that “improper revival could not be raised as a defense to an infringement action because improper revival was not literally among the catalog of defenses listed in 35 U.S.C. § 282.” Judge Dyk cited to cases where non-listed defense has been recognized by the courts and argued that these cases “cannot be so easily distinguished from the situation in Aristocrat itself.” Accordingly he would allow such a defense.
Judge Newman concurred that “neither the Patent Act nor the Administrative Procedure Act provides a cause of action in which third persons may challenge the revival by the PTO of an application that was deemed abandoned for failure to meet a filing date.” She wrote separately to address Judge Dyk’s criticism of Aristocrat. Judge Newman distinguished an excuse for a missed filing date, which was not a viable invalidity defense, from the more substantive viable defenses recognized in the case law.
Case or Controversy Exists in Declaratory Judgment Action of Non-infringement for Disclaimed Patent
Apotex Inc., v. Daiichi Sankyo, Inc., No. 2014-1282, -1291, 2015 U.S. App. LEXIS 5134 (Fed. Cir. Mar. 31, 2015) (Taranto, J.). Click Here for a copy of the opinion.
Daiichi filed an NDA for olmesarta medoxomil (Benicar), a hypertension drug, and listed two of its patents, U.S. Pat. Nos. 5,616,599 and 6,878,703, in the Orange Book. Subsequently, Mylan filed an ANDA with a paragraph IV Certification, seeking to market a generic version of Benicar. Daiichi responded in part by disclaiming all claims of the ‘703 patent and requesting its removal (“delisting”) from the Orange Book, which the FDA has not yet done.
Daichii initiated Hatch-Waxman litigation against Mylan. After a full trial, the district court upheld the validity of the ‘599 patent and entered judgment of infringement against Mylan. Consequently, the earliest Mylan can enter the market is October 25, 2016, six months after the expiration date of the ‘599 patent (which include 6 months of Patent Term Extension). In addition, because Mylan was the first ANDA filer to maintain a Paragraph IV Certification regarding the ‘703 patent, Mylan claims a 180-day exclusivity period starting on Oct. 25, 2016. 21 U.S.C. § 355(j)(5)(B)(iv)(II)(bb). Mylan benefits from this exclusivity period despite Daiichi’s disclaimer and regarding the still Orange Book listed ‘703 patent.
Apotex filed an ANDA with a Paragraph III Certification (conceding validity and infringement of the ‘599 patent) and Paragraph IV Certification (alleging non-infringement of the ‘703 patent). Daichii did not sue on the disclaimed ‘703 patent. Apotex then brought a declaratory judgment action against Daiichi alleging that the Apotex product could not infringe the disclaimed ‘703 patent. Mylan moved to intervene, which the court denied. The district court dismissed Apotex’s declaratory judgment claims, finding there could be no case or controversy over a disclaimed patent.
On appeal, the Federal Circuit reversed on both the denial of Mylan’s intervention and the dismissal of Apotex’s declaratory judgment action. Mylan has a right to be a party in this case because Apotex’s declaratory judgment, if granted, would cause a forfeiture of Mylan’s presumed market-exclusivity period. Therefore Mylan has a concrete monetary interest in the outcome of the case.
In holding that there was a sufficient case or controversy, the Court concluded: “the stakes over which the parties are vigorously fighting are concrete and substantial: the amount of revenue there will be from sales of olmesartan medoxomil, and who will get what portions of it, during a period of at least six months.” Daiichi and Apotex also have concrete interests in the truncation or preservation of Mylan’s exclusivity period.
The Court also reasoned that Apotex’s delayed entry to the market (after Mylan) was “fairly traceable” to Daiichi’s listing of the ‘703 patent in the Orange Book. If Daiichi never listed the ‘703 patent, Mylan would have no exclusivity period, since it lost its challenge to the ‘599 patent. Daiichi, therefore, was responsible for Mylan’s exclusivity period.
Tentative FDA approval for Apotex’s proposed drug was not a necessary predicate for Apotex to have a ripe case or controversy in connection with its patent dispute with Daiichi. Specifically, “the statute authorizing the litigation upon filing of an ANDA nowhere requires tentative FDA approval as a precondition: the filing of the ANDA, with a Paragraph IV Certification, is itself deemed an act of infringement.” In addition, the patent owner must bring suit within 45 days to obtain a 30-month delay in any effective date of approval for the ANDA. Evidently, the statute “contemplates litigation well before such tentative approval.”
Finally, the Court concluded that a declaratory judgment could “redress” the harm to Apotex, i.e., it could ultimately cause a forfeiture of Mylan’s 180-day exclusivity period. The Medicare Prescription Drug, Improvement, and Modernization Act of 2003 (MMA) added several forfeiture provisions relating to the 180-day first filer exclusivity. As applied to this case, forfeiture requires: (1) “the court must have entered a final decision of non-infringement that is no longer appealable”; and (2) “the second filer [Apotex] must have received tentative approval.” If the first filer failed to enter the market within 75 days after these two requirements are satisfied, it is said to have forfeited its exclusivity rights. Therefore, Apotex could cause a forfeiture by obtaining a declaratory judgment and receiving a tentative approval before the date when Mylan has FDA approval to make its first sale. The Court also rejected Mylan’s argument that tentative approval must precede the declaratory judgment action.
Because a case or controversy existed for all of these reasons, the Federal Circuit reversed.
Court Deems “Refers To” Language In Amendment Defines a Disputed Claim Term
Vasudevan Software, Inc. v. MicroStrategy, Inc., No. 2014-1194, and Vasudevan Software, Inc. v. TIBCO Software, Inc., No. 2014-1096, 2015 U.S. App. LEXIS 5396 (Fed. Cir. Apr. 3, 2015) (Linn, CJ.). Click Here for a copy of the opinion.
Vasudevan Software, Inc. (“VSi”) sued MicroStrategy, Inc. (“MicroStrategy”) and TIBCO Software, Inc. (“TIBCO”) (collectively, “defendants”) in separate suits for infringing four U.S. patents. The patents shared a common specification related to online data processing from incompatible databases. The district court did not consolidate the suits, but considered the claim construction issues together.
An issue arose over the term “disparate . . . databases.” The parties agreed that “disparate” means “incompatible,” but differed over how extensive that incompatibility must be. VSi argued that the plain and ordinary meaning of “disparate databases” is “incompatible databases having different schemas.” In support, VSi cited testimony from its expert, and a stipulation with IBM and Oracle agreeing to the same construction in a different litigation. The defendants contended that “disparate databases” meant “databases having an absence of compatible keys or record identifier (ID) columns of similar value or format in the schemas or structures of the database that would otherwise enable linking data within the constituent databases.” They cited a statement by VSi in the prosecution history for one or the patents. Specifically, VSi stated in response to an Office Action that the disparate nature “refers to” an absence of common keys or record IDS columns of similar value or format. The district court agreed with the defendants, determining that VSi’s statement was a “clear” and “unmistakable” definition of “disparate databases.” In a Clarification Order, the district court ruled that VSi’s statement limits disparate databases to ones that have an absence of compatible keys; and an absence of record ID columns of similar value; and an absence of record ID columns of similar format in the schemas.
Based on this clarified claim construction, the parties stipulated to non-infringement. Then, TIBCO filed a motion for summary judgment (“SJ”) of invalidity of all claims asserted by VSi based on a lack of written description and enablement. MicroStrategy filed a similar motion for SJ, citing lack of enablement. The district court granted the defendants’ motions. VSi appealed the district court’s claim construction and invalidity determinations.
The Federal Circuit affirmed the district court’s claim construction and non-infringement determination, but reversed the district court’s summary judgment of invalidity and remanded. The Court agreed that the “refers to” phrase in VSi’s statement established an intention to define “disparate databases.” The plain and ordinary meaning of “disparate databases” proposed by VSi leaves open the question of how “disparate” or “incompatible” the databases may be. Testimony of VSi’s expert does not provide a clear definition, as the expert conceded that the meaning of “disparate databases” depends on the “context” and lacks a “consistent use.” Further, a construction that was stipulated to by other parties in a different litigation “is of little relevance or probative value.” Because the specification, expert testimony, and stipulation leave uncertain the meaning of “disparate databases,” the district court correctly turned to the prosecution history. Further, the Clarification Order follows proper grammar, “where the phrase ‘not A, B, or C’ means ‘not A, not B, and not C.’”
Regarding summary judgment, the Court found genuine issues of material fact for written description and enablement. VSi’s expert cited support for his testimony within the specification, which arguably discloses how to access disparate databases to comply with the written description requirement. Also, the extensive effort taken by the inventor to reduce the invention to practice does not conclusively show a lack of enablement. The Court concluded that, while the Wands factors weigh heavily in favor of invalidity, the genuine issues of material facts are sufficient to defeat summary judgment.
The following opinions are not reported in this newsletter:
Intellectual Ventures II LLC v. JPMorgan Chase & Co., No. 2014-1724, 2015 U.S. App. LEXIS 5204 (Fed. Cir. April 1, 2015) (appeal was dismissed because the Federal Circuit does not have jurisdiction under the AIA to review interloculatory appeal from a motion to stay until the PTAB institutes a CBMR proceeding). Click Here for a copy of the opinion.
Astrazeneca AB v. Apotex Corp., No. 2014-1221, 2015 U.S. App. LEXIS 5543 (Fed. Cir. April 7, 2015) (affirming the district court’s reasonably royalty calculation but reversing the application of royalty rate during the pediatric exclusivity period). Click Here for a copy of the opinion.
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