Intelectual Property (IP)

Latest Federal Court Cases – July 2023 | Schwabe, Williamson & Wyatt PC

In this week’s Case of the Week, the Federal Circuit upheld an application by the Patent Trial and Appeal Board of its Pilot Program concerning motions to amend practice and procedures (the “Pilot Program”), which patent owner/appellant Medytox challenged under the Administrative Procedures Act.  Parties whose patents are challenged in administrative trial proceedings under the America Invents Act (i.e., inter partes reviews, post-grant reviews, or covered business method reviews) may generally file a motion to amend the challenged claims to overcome a petitioner’s challenge.  Under the Pilot Program, after receiving a petitioner’s opposition to a motion to amend, the patent owner may opt to receive preliminary guidance from the Board on whether there is a reasonable likelihood that its motion and proposed amended claims meet applicable statutory and regulatory requirements, and may choose to file a revised motion to amend to address issues raised in the petitioner’s initial opposition and/or in the Board’s preliminary guidance.

In the underlying post-grant review proceeding in this case, the Board changed its views on a claim construction dispute between issuing its preliminary guidance and issuing its final written decision, which ultimately denied Medytox’s motion to amend.  The challenged claims of Medytox’s patent were directed to administration of an animal-protein-free botulinum toxin composition, and its proposed amended claims included a limitation requiring that the claimed composition have a greater length of effect than BOTOX®, which was to be measured with reference to “a responder rate at 16 weeks after the first treatment of 50% or greater” (the “responder rate limitation”).  Because the examples disclosed in the specification only implicated “responder rates” of up to 62%, petitioner Galderma argued, inter alia, that the full scope of the claims (i.e., responder rates of 50%-100%) was not enabled.  Medytox argued in response that the responder rate limitation reflected a clinically meaningful “threshold” and should not be construed as a “range.”  In its preliminary guidance on Medytox’s motion to amend, the Board expressed a “preliminary view” that the proposed responder rate limitation did not add new matter, and that it should not “necessarily be interpreted as a range of 50-100%” as opposed to simply 50% or greater.  Medytox filed a revised motion to amend retaining the responder rate limitation, but after further argument, expert testimony, and trial, the Board in its Final Written Decision construed the limitation as a range with an upward limit of 100% and found that it was not enabled by the specification.

Medytox appealed and, in addition to challenging the Board’s construction and enablement finding, argued that the Board’s shift on the claim construction dispute was “arbitrary and capricious” and deprived it of a full and fair opportunity to litigate in violation of the APA.  The Federal Circuit affirmed the Board’s construction (finding that there was no meaningful difference between the parties’ proposed “threshold” and “range” constructions in any event) and found its non-enablement finding to be supported by substantial evidence.

In response to Medytox’s APA challenges, the Federal Circuit found that the Board’s decision was not arbitrary and capricious and that no deprivation of due process had occurred.  Beyond finding that the record before the Board had significantly developed between issuing its preliminary guidance and issuing its final written decision, the Court focused on the differing standards of persuasion as between the two procedures—whereas a petitioner had to prove unpatentability by a preponderance of the evidence to support a final written decision, the preliminary guidance procedure implicated only a “reasonable likelihood” that the proposed amended claims may or may not pass muster.  Analogizing the scenario to the difference between a decision on whether to institute review and a final written decision, the Court relied on precedent permitting a shift in theories as between those phases of a review to find that the Board’s decision in this case was not a violation of the APA.  The Court also noted that the Patent Office and the Board had provided ample notice that the “preliminary guidance” was preliminary and non-binding—both in announcing the Pilot Program and in its filings in the instant proceeding—and found that Medytox had had a full and fair opportunity to litigate its claims.  Accordingly, the Court affirmed the Board’s decision denying Medytox’s motion to amend.

The opinion can be found here.

By Jason A. Wrubleski

ALSO THIS WEEK

LKQ Corporation v. GM Global Technology Operations LLC, Appeal No. 2021-2348 (Fed. Cir. June 30, 2023)

In a precedential order, the en banc court agreed to hear this case concerning the standard for obviousness applicable to design patents.  Although the Federal Circuit panel’s opinion in the case was designated nonprecedential, we nonetheless wrote about it in January this year because of its significance.  Our write-up can be found here.  Specifically, the Court upheld the Rosen and Durling tests for design patent obviousness over an argument that those decisions were abrogated sub silencio by the Supreme Court’s decision in KSR International Co. v. Teleflex Inc., 550 U.S. 398 (2007).  In its order this week, the en banc court will consider that question.  The Court sought briefing on the following questions:

A. Does KSR International Co. v. Teleflex Inc. overrule or abrogate In re Rosen, 673 F.2d 388 (CCPA 1982), and Durling v. Spectrum Furniture Co., Inc., 101 F.3d 100 (Fed. Cir. 1996)?

B. Assuming that KSR neither overrules nor abrogates Rosen and Durling, does KSR nonetheless apply to design patents and suggest the Court should eliminate or modify the Rosen-Durling test? In particular, the Court asked the parties to address whether KSR’s statements faulting “a rigid rule that limits the obviousness inquiry,” 550 U.S. at 419, and adopting “an expansive and flexible approach,” id. at 415, should cause the Court to eliminate or modify:

(a) Durling’s requirement that “[b]efore one can begin to combine prior art designs . . . one must find a single reference, ‘a something in existence, the design characteristics of which are basically the same as the claimed design,’” 101 F.3d at 103 (quoting Rosen, 673 F.2d at 391); and/or

(b) Durling’s requirement that secondary references “may only be used to modify the primary reference if they are ‘so related to the primary reference that the appearance of certain ornamental features in one would suggest the application of those features to the other,’” id. at 103 (quoting In re Borden, 90 F.3d 1570, 1575 (Fed. Cir. 1996)) (internal alterations omitted).

C. If the Court were to eliminate or modify the Rosen-Durling test, what should the test be for evaluating design patent obviousness challenges?

D. Has any precedent from this Court already taken steps to clarify the Rosen-Durling test? If so, the Court asked the parties to identify whether those cases resolve any relevant issues.

E. Given the length of time in which the Rosen-Durling test has been applied, would eliminating or modifying the design patent obviousness test cause uncertainty in an otherwise settled area of law?

F. To the extent not addressed in the responses to the questions above, what differences, if any, between design patents and utility patents are relevant to the obviousness inquiry, and what role should these differences play in the test for obviousness of design patents?

The opinion can be found here.

By Nika Aldrich

Story originally seen here

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