IP News

Federal Circuit Rules for Apotex in Paxil Suit

In Smithkline Beecham Corp. v. Apotex Corp., Nos. 03-1285, 03-1313, 2005 U.S. App. LEXIS 5671 (Fed. Cir. Apr. 8, 2005), the Federal Circuit granted a rehearing en banc for the limited purpose of vacating the original panel's opinion that concerned the issue of experimental use. The Federal Circuit then remanded the case to the original panel, which issued a new decision invalidating GlaxoSmithKline's (“GSK”) patent covering the antidepressant Paxil due to “inherent anticipation.”

In March 2003, the U.S. District Court of the Northern District of Illinois found that Apotex's generic drug did not violate GSK's patents. On appeal, the Federal Circuit affirmed the district court's decision, but on different grounds. While the Federal Circuit found that the district court's claim construction of claim 1 of U.S. Patent No. 4,721,723 (“the '723 patent”) was erroneous (and therefore Apotex's drug did infringe claim 1 of the '723 patent), it ruled that this claim was invalid because of “public use” more than 1 year prior to the filing of the application. GSK had admitted that its clinical trials were public, but argued that such trials constituted an “experimental use.”

In its new decision after the en banc rehearing, the Federal Circuit did not address whether GSK's clinical trials were anticipatory under '102(b). Rather, the court found that the '723 patent was inherently anticipated by U.S. Patent No. 4,007,196 (“the '196 patent”). The compound claimed in the '723 patent is known as paroxetine hydrochloride hemihydrate (“PHH”). The '196 patent discloses paroxetine hydrochloride anhydrate (“PHA”). In the district court, GSK presented evidence that PHA inevitably converts to PHH in the presence of PHH “seeds,” and that it was extremely difficult to manufacture pure PHA. The district court found that the '723 patent was not inherently anticipated because Apotex had not proven by clear and convincing evidence that it was impossible to make pure PHA. The Federal Circuit disagreed with the district court's standard of proof, and ruled that Apotex merely had to show that “'the disclosure [of the prior art] is sufficient to show that the natural result flowing from the operation as taught [in the prior art] would result in' the claimed product.” Id. at 5675. Since the court found that production of PHA according to the '196 patent inevitably results in the production of at least trace amounts of PHH, it ruled that the '196 inherently anticipated the '723 patent.

Permanent Injunction Entered Against PlayStation Sales, But Stay Granted Pending Appeal

Judge Claudia Wilken of the U.S. District Court for the Northern District of California entered a permanent injunction against Sony Corp., ordering the electronics manufacturer to halt U.S. sales of its PlayStation system. The judge, however, immediately granted a stay of the injunction pending appeal. Immersion Corp. v. Sony Computer Entertainment Am., Inc., No. 02-0710, 2005 U.S. Dist. LEXIS 4781 (N.D. Ca. Mar. 24, 2005).

The patents in suit involve a technology that vibrates a video game controller in sync with on-screen effects. In Sept. 2004, a jury found that Immersion's patents were valid and infringed by Sony's PlayStation system, including the consoles, controllers, and certain games.

In granting the stay of the injunction, the court balanced: 1) the strength of Sony's showing that it was likely to succeed on the merits of its appeal, 2) whether Sony will be irreparably injured absent a stay, 3) whether Immersion will be substantially injured by a stay, and 4) the public interest.

Federal Circuit Rejects Peanut Butter Sandwich Patents

The Federal Circuit upheld the Patent and Trademark Office's decision to reject applications by J.M. Smucker Co. (“Smucker”) for patents covering methods for making its popular “Uncrustables” peanut butter and jelly sandwiches. Sales of “Uncrustables” were $27.5 million in 2004.

Smucker purchased two patents covering a “sealed, crustless sandwich” and a tool for making such sandwiches in 1999. The patent examiner rejected Smucker's process patent applications, citing a 1994 article that provides tips on making peanut butter and jelly sandwiches. The Board of Appeals and Interferences upheld the examiner's decision, concluding that the process for making “Uncrustables” was the same as making ravioli or pie crust.

The Federal Circuit issued a ruling a day after arguments were held, and rejected Smucker's applications without comment. Smucker's original patents are being re-examined by the PTO.

Judge Denies Motions to Dismiss in Google Keyword Advertising Case

Judge Jeremy Fogel of the U.S. District Court for the Northern District of California denied motions by Google, Earthlink, America Online, Netscape, Ask Jeeves, and CompuServe to dismiss a trademark infringement suit brought by American Blind & Wallpaper Factory.

In Nov. 2003, Google filed a declaratory judgment action seeking a determination that its “AdWords” program did not infringe American Blind's trademarks. (Google's “AdWords” program allows online advertisers to purchase or bid on certain keywords. When an Internet user enters those keywords into Google's search engine, the program generates links to the advertisers' Web sites.) In response, American Blind filed counterclaims against Google and other third-party defendants for trademark infringement, dilution, false representation, injury to business reputation, unfair competition, tortious interference with prospective business advantage, as well as claims for contributory infringement and dilution. Defendants moved to dismiss American Blind's counterclaims for failure to state a claim upon which relief can be granted pursuant to Fed. R. Civ. P. 12(b)(6).

In support of their motions to dismiss, defendants argued that American Blind's suit must fail because it did not allege that defendants “used” American Blind's marks to identify the source of their own goods. The court, however, denied defendants' motions, finding that, in light of Playboy Enterprises, Inc. v. Netscape Communications Corp., 354 F.3d 1020 (9th Cir. 2004), “it does not appear 'beyond doubt' that American Blind 'can prove no set of facts in support of [its] claim[s] that would entitle [it] to relief.” In Playboy, a case involving Internet pop-up advertising, the U.S. Court of Appeals for the Ninth Circuit reversed a grant of summary judgment in favor of Netscape and Excite, Inc., finding that there were genuine issues of material fact, including whether there was a likelihood of confusion.

House Committee Drafts Overhaul of Patent Laws

The House Subcommittee on Intellectual Property has drafted a proposal that would introduce sweeping changes to U.S. patent law. Several changes would harmonize the U.S. system with international patent laws. Among the more notable proposed reforms are the introduction of first-to-file rights to replace the first-to-invent system, the establishment of post-grant opposition procedures in the U.S. Patent & Trademark Office (“USPTO”), and new provisions relating to the inequitable conduct defense.

The first-to-invent system is unique to the United States and provides that patents are granted to the first applicant who conceives of an invention, provided that an applicant used reasonable diligence in reducing the invention to practice from time of conception. A change to a first-to-file system would eliminate several subsections in '102 that relate to the actual date of invention.

The proposal would also radically change the inequitable conduct defense by providing that federal courts would no longer have the authority to adjudicate such issues: “No court or Federal department or agency other than the [Patent] Office, and no other Federal or State governmental entity, may investigate or make an adjudication with respect to an alleged violation of the duty of candor and good faith. … ” A federal court may, however, refer a possible inequitable conduct issue to the USPTO.

Further, the proposal would establish an elaborate post-grant opposition procedure that would give the public the right to oppose granted patents in the USPTO. The burden of proving invalidity would be on the opposer, and the standard would be a preponderance of the evidence. Decisions made in such oppositions would be appealable by either party to the U.S. Court of Appeals for the Federal Circuit.

House and Senate Pass Family Copyright Bill

The Family Entertainment and Copyright Act of 2005 has been passed by both the Senate and the House of Representatives and is awaiting the president's signature. This Act has two major provisions. First, the Act establishes criminal penalties for making unauthorized recordings of films in movie theaters and gives movie theaters the right to detain any person suspected of making such recordings. The other major provision of the Act would permit technologies that allow users to skip objectionable content in movies viewed at home. These technologies are the subject of a federal lawsuit in the U.S. District Court for the District of Colorado. In this case, the Directors Guild of America and 13 individual directors sued ClearPlay and other similar services for copyright violations and for altering their work. The parties are awaiting the court's ruling on defendants' motion for summary judgment.

Federal Circuit Rules for Apotex in Paxil Suit

In Smithkline Beecham Corp. v. Apotex Corp., Nos. 03-1285, 03-1313, 2005 U.S. App. LEXIS 5671 (Fed. Cir. Apr. 8, 2005), the Federal Circuit granted a rehearing en banc for the limited purpose of vacating the original panel's opinion that concerned the issue of experimental use. The Federal Circuit then remanded the case to the original panel, which issued a new decision invalidating GlaxoSmithKline's (“GSK”) patent covering the antidepressant Paxil due to “inherent anticipation.”

In March 2003, the U.S. District Court of the Northern District of Illinois found that Apotex's generic drug did not violate GSK's patents. On appeal, the Federal Circuit affirmed the district court's decision, but on different grounds. While the Federal Circuit found that the district court's claim construction of claim 1 of U.S. Patent No. 4,721,723 (“the '723 patent”) was erroneous (and therefore Apotex's drug did infringe claim 1 of the '723 patent), it ruled that this claim was invalid because of “public use” more than 1 year prior to the filing of the application. GSK had admitted that its clinical trials were public, but argued that such trials constituted an “experimental use.”

In its new decision after the en banc rehearing, the Federal Circuit did not address whether GSK's clinical trials were anticipatory under '102(b). Rather, the court found that the '723 patent was inherently anticipated by U.S. Patent No. 4,007,196 (“the '196 patent”). The compound claimed in the '723 patent is known as paroxetine hydrochloride hemihydrate (“PHH”). The '196 patent discloses paroxetine hydrochloride anhydrate (“PHA”). In the district court, GSK presented evidence that PHA inevitably converts to PHH in the presence of PHH “seeds,” and that it was extremely difficult to manufacture pure PHA. The district court found that the '723 patent was not inherently anticipated because Apotex had not proven by clear and convincing evidence that it was impossible to make pure PHA. The Federal Circuit disagreed with the district court's standard of proof, and ruled that Apotex merely had to show that “'the disclosure [of the prior art] is sufficient to show that the natural result flowing from the operation as taught [in the prior art] would result in' the claimed product.” Id. at 5675. Since the court found that production of PHA according to the '196 patent inevitably results in the production of at least trace amounts of PHH, it ruled that the '196 inherently anticipated the '723 patent.

Permanent Injunction Entered Against PlayStation Sales, But Stay Granted Pending Appeal

Judge Claudia Wilken of the U.S. District Court for the Northern District of California entered a permanent injunction against Sony Corp., ordering the electronics manufacturer to halt U.S. sales of its PlayStation system. The judge, however, immediately granted a stay of the injunction pending appeal. Immersion Corp. v. Sony Computer Entertainment Am., Inc., No. 02-0710, 2005 U.S. Dist. LEXIS 4781 (N.D. Ca. Mar. 24, 2005).

The patents in suit involve a technology that vibrates a video game controller in sync with on-screen effects. In Sept. 2004, a jury found that Immersion's patents were valid and infringed by Sony's PlayStation system, including the consoles, controllers, and certain games.

In granting the stay of the injunction, the court balanced: 1) the strength of Sony's showing that it was likely to succeed on the merits of its appeal, 2) whether Sony will be irreparably injured absent a stay, 3) whether Immersion will be substantially injured by a stay, and 4) the public interest.

Federal Circuit Rejects Peanut Butter Sandwich Patents

The Federal Circuit upheld the Patent and Trademark Office's decision to reject applications by J.M. Smucker Co. (“Smucker”) for patents covering methods for making its popular “Uncrustables” peanut butter and jelly sandwiches. Sales of “Uncrustables” were $27.5 million in 2004.

Smucker purchased two patents covering a “sealed, crustless sandwich” and a tool for making such sandwiches in 1999. The patent examiner rejected Smucker's process patent applications, citing a 1994 article that provides tips on making peanut butter and jelly sandwiches. The Board of Appeals and Interferences upheld the examiner's decision, concluding that the process for making “Uncrustables” was the same as making ravioli or pie crust.

The Federal Circuit issued a ruling a day after arguments were held, and rejected Smucker's applications without comment. Smucker's original patents are being re-examined by the PTO.

Judge Denies Motions to Dismiss in Google Keyword Advertising Case

Judge Jeremy Fogel of the U.S. District Court for the Northern District of California denied motions by Google, Earthlink, America Online, Netscape, Ask Jeeves, and CompuServe to dismiss a trademark infringement suit brought by American Blind & Wallpaper Factory.

In Nov. 2003, Google filed a declaratory judgment action seeking a determination that its “AdWords” program did not infringe American Blind's trademarks. (Google's “AdWords” program allows online advertisers to purchase or bid on certain keywords. When an Internet user enters those keywords into Google's search engine, the program generates links to the advertisers' Web sites.) In response, American Blind filed counterclaims against Google and other third-party defendants for trademark infringement, dilution, false representation, injury to business reputation, unfair competition, tortious interference with prospective business advantage, as well as claims for contributory infringement and dilution. Defendants moved to dismiss American Blind's counterclaims for failure to state a claim upon which relief can be granted pursuant to Fed. R. Civ. P. 12(b)(6).

In support of their motions to dismiss, defendants argued that American Blind's suit must fail because it did not allege that defendants “used” American Blind's marks to identify the source of their own goods. The court, however, denied defendants' motions, finding that, in light of Playboy Enterprises, Inc. v. Netscape Communications Corp. , 354 F.3d 1020 (9th Cir. 2004), “it does not appear 'beyond doubt' that American Blind 'can prove no set of facts in support of [its] claim[s] that would entitle [it] to relief.” In Playboy , a case involving Internet pop-up advertising, the U.S. Court of Appeals for the Ninth Circuit reversed a grant of summary judgment in favor of Netscape and Excite, Inc., finding that there were genuine issues of material fact, including whether there was a likelihood of confusion.

House Committee Drafts Overhaul of Patent Laws

The House Subcommittee on Intellectual Property has drafted a proposal that would introduce sweeping changes to U.S. patent law. Several changes would harmonize the U.S. system with international patent laws. Among the more notable proposed reforms are the introduction of first-to-file rights to replace the first-to-invent system, the establishment of post-grant opposition procedures in the U.S. Patent & Trademark Office (“USPTO”), and new provisions relating to the inequitable conduct defense.

The first-to-invent system is unique to the United States and provides that patents are granted to the first applicant who conceives of an invention, provided that an applicant used reasonable diligence in reducing the invention to practice from time of conception. A change to a first-to-file system would eliminate several subsections in '102 that relate to the actual date of invention.

The proposal would also radically change the inequitable conduct defense by providing that federal courts would no longer have the authority to adjudicate such issues: “No court or Federal department or agency other than the [Patent] Office, and no other Federal or State governmental entity, may investigate or make an adjudication with respect to an alleged violation of the duty of candor and good faith. … ” A federal court may, however, refer a possible inequitable conduct issue to the USPTO.

Further, the proposal would establish an elaborate post-grant opposition procedure that would give the public the right to oppose granted patents in the USPTO. The burden of proving invalidity would be on the opposer, and the standard would be a preponderance of the evidence. Decisions made in such oppositions would be appealable by either party to the U.S. Court of Appeals for the Federal Circuit.

House and Senate Pass Family Copyright Bill

The Family Entertainment and Copyright Act of 2005 has been passed by both the Senate and the House of Representatives and is awaiting the president's signature. This Act has two major provisions. First, the Act establishes criminal penalties for making unauthorized recordings of films in movie theaters and gives movie theaters the right to detain any person suspected of making such recordings. The other major provision of the Act would permit technologies that allow users to skip objectionable content in movies viewed at home. These technologies are the subject of a federal lawsuit in the U.S. District Court for the District of Colorado. In this case, the Directors Guild of America and 13 individual directors sued ClearPlay and other similar services for copyright violations and for altering their work. The parties are awaiting the court's ruling on defendants' motion for summary judgment.