IP News

Federal Circuit Once Again Grants Writ of Mandamus Directing Transfer Out of The Eastern District of Texas

In In re Hoffman-Law Roche, Inc., Misc. Docket No. 911 (Fed. Cir. Dec. 2, 2009), the Federal Circuit granted petitioners' writ of mandamus directing the U.S. District Court for the Eastern District of Texas to transfer the case to the U.S. District Court for the Eastern District of North Carolina.

Novartis Vaccines and Diagnostics, Inc. (“Novartis”), a California corporation, brought suit against Hoffman La-Roche, Inc. and its related companies (collectively “Roche”) in the District Court for the Eastern District of Texas, alleging that Fuzeon', a commercial HIV-inhibitor drug, infringed Novartis' patent. Fuzeon was developed by scientists at Duke Medical Center who formed a company called Trimeris, Inc. in 1993 to develop Fuzeon's peptide composition into a possible therapy for HIV infection. Fuzeon was developed and tested at Trimeris' labs in Morrisville, NC, where relevant materials are maintained.

Trimeris partnered with Roche to handle Fuzeon's complex manufacturing process and bring the drug to market. Fuzeon's active pharmaceutical ingredient is manufactured by Roche in Colorado and further processed in either Michigan or Switzerland. The drug is then packaged in New Jersey and marketed nationwide.

After the parties submitted their initial disclosures identifying potential witnesses, Roche and Trimeris moved the Texas district court to transfer the suit to the Eastern District of North Carolina. Roche and Trimeris argued that there were no witnesses or sources of proof within 100 miles of the Eastern District of Texas, and that the bulk of key documentary evidence, as well as several party and non-party witnesses, were located either within the Eastern District of North Carolina, or within 100 miles thereof.

The Eastern District of Texas denied defendants' motion. The court reasoned that this was a “decentralized” case, given the various locations of witnesses, and transfer would merely shift inconveniences from some witnesses to others. The court further noted that it was able to subpoena one non-party witness, Dr. Nancy Chang (who lived in Texas, but more than 100 miles from the district), for attendance at trial. The district court also noted that Novartis had already transferred 75,000 pages of electronic documents to its local counsel in Texas.

The Federal Circuit granted Roche and Trimeris' writ of mandamus, holding that, as in its most recent decision regarding venue transfer, In re Genentech, Inc., 566 F.3d 1338 (Fed. Cir. 2009), there is a stark contrast in relevance, convenience and fairness between the two venues. The Federal Circuit reasoned that the accused drug was developed and tested within the Eastern District of North Carolina, and documents and sources of proof remained there. Further, the Eastern District of North Carolina had a local interest in the case because the cause of action calls into question the work and reputation of several individuals residing in or near that district who presumably conduct business in that community. The court further reasoned that there are at least four non-party witnesses residing within 100 miles of the Eastern District of North Carolina who could be compelled for both deposition and trial testimony. On the other hand, the court noted that the Texas district court could not subpoena Dr. Chang for deposition under Fed. R. Civ. P. 45, since she resided more than 100 miles from the district. Finally, the court held that the district court erred in considering the 75,000 pages of electronic documents that Novartis had transferred to its local counsel in Texas. The court stated that Novartis' assertion that these were “Texas” documents was a “fiction,” which appeared to have been created to improperly manipulate the propriety of venue.

Apple Wins Summary Judgment Of Copyright Infringement Against Psystar

In Apple, Inc. v. Psystar Corp., No. 08-03251 (N.D. Cal. Nov. 13, 2009), the U.S. District Court for the Northern District of California granted Apple's motion for summary judgment that Psystar had infringed Apple's copyrights in the Mac OS X operating system software.

Apple sells a line of computers under the “Mac” name as well as an operating system called Mac OS X. The Max OS X license agreement specifically prohibited customers from installing Mac OS X on non-Apple computers. Psystar Corp. sells a line of computers called Open Computers that run on a modified version of Max OS X software. In order to modify Mac OS X, Psystar first bought a copy of the Mac OS X software and installed it on an Apple Mac mini. Next, Psystar copied Mac OS X from the Mac mini onto a non-Apple computer. Once on the non-Apple computer, Psystar modified Max OS X by replacing “kernel” files that prevented Mac OS X from running on non-Apple computers and by replacing the Mac OS X “bootloader,” the file that runs when a computer first comes on and loads portions of the operating system into random access memory. The modified Mac OS X copy became the “master copy” that Psystar used for mass reproduction and installation onto other Psystar computers. Each party moved for summary judgment. Apple alleged that Psystar violated three of its exclusive rights: 1) reproduction; 2) distribution; and 3) the right to create derivative works. Psystar alleged that Apple engaged in copyright misuse by tying Max OS X to Apple hardware.

The District Court granted summary judgment to Apple with respect to its copyright infringement claims. The court first held that Psystar's actions violated Apple's reproduction rights and dismissed Psystar's Section 117(a) “essential step” defense as all but frivolous.

The court next found that Psystar violated Apple's distribution rights. Although Psystar argued that its distribution of modified Mac OS X copies was protected by the first-sale doctrine of 17 U.S. ' 109, the court held that this defense only apples to lawfully made copies, which Psystar's copies were not. The court also held that Psystar's modification of Mac OS X infringed Apple's right to create derivate works, rejecting Psystar's argument that it did not create a derivative work since Apple's source code, object code and kernel extensions were unmodified and it merely replaced entire files with others. The court reasoned that Psystar's modifications amounted to a substantial variation from the underlying copyrighted work.

On Psystar's copyright misuse defense, the court held that Apple did not commit copyright misuse by prohibiting the use of its Mac OS X software on non-Apple computers. The court distinguished Ninth Circuit precedent finding copyright misuse where the copyright holder required a contracting party to use only the copyright holder's copyrighted software. The court reasoned that: “Apple has not prohibited purchasers of Mac OS X from using competitor's products. Rather, Apple has simply prohibited purchasers from using Mac OS X on competitor's products.”

Federal Circuit Opines on Indefiniteness Doctrine

In Ultimax Cement Mfg. Corp. v. CTS Cement Mfg. Corp., 2008-1218, -1439 (Fed. Cir. Dec. 3, 2009), the Federal Circuit reversed a district court's summary judgment ruling and held that a claimed formula was not indefinite even though, with all of its permutations, it yielded over 5,000 possible different compounds.

Plaintiff and defendant both produce rapid-hardening, high-strength cement. In June 2002, plaintiff brought suit, alleging, among other things, that defendant infringed claim 17 of U.S. Patent 6,113,684 (“the '684 patent”). That claim recited, in relevant part: “a hydraulic cement containing CaO, {(K,N,M)4(A,F,Mn,P,T,S)3(cl, SO3)} and a member selected from the group consisting of {C9S3SO3Ca(f cl)2}, C5S2 SO3 and mixtures thereof.” The '684 patent specification redefined common chemical symbols by, for example, stating that “C” represents CaO, “K” represents K2O, etc., for many of the letters used in the claimed compounds. The specification referred to the compound (K,N,M)4(A,F,Mn,P,T,S)3(cl, SO3) as “Crystal X.”

The district court granted defendant's motion for summary judgment that claim 17 of the '684 patent was indefinite because Crystal X encompassed over 5,000 possible compounds. The Federal Circuit reversed and directed the district court to enter summary judgment that claim 17 is not indefinite. The court reasoned that a claim to a formula containing over 5,000 possible combinations is not necessarily ambiguous if it sufficiently notifies the public of the scope of the claims. The court opined that, in this case, if a member of the public made a compound of pure C4A3Cl, or substituted some K molecules for some C molecules, he or she would know that the compound fit within the set of compounds described by the claims.

Federal Circuit Once Again Grants Writ of Mandamus Directing Transfer Out of The Eastern District of Texas

In In re Hoffman-Law Roche, Inc., Misc. Docket No. 911 (Fed. Cir. Dec. 2, 2009), the Federal Circuit granted petitioners' writ of mandamus directing the U.S. District Court for the Eastern District of Texas to transfer the case to the U.S. District Court for the Eastern District of North Carolina.

Novartis Vaccines and Diagnostics, Inc. (“Novartis”), a California corporation, brought suit against Hoffman La-Roche, Inc. and its related companies (collectively “Roche”) in the District Court for the Eastern District of Texas, alleging that Fuzeon', a commercial HIV-inhibitor drug, infringed Novartis' patent. Fuzeon was developed by scientists at Duke Medical Center who formed a company called Trimeris, Inc. in 1993 to develop Fuzeon's peptide composition into a possible therapy for HIV infection. Fuzeon was developed and tested at Trimeris' labs in Morrisville, NC, where relevant materials are maintained.

Trimeris partnered with Roche to handle Fuzeon's complex manufacturing process and bring the drug to market. Fuzeon's active pharmaceutical ingredient is manufactured by Roche in Colorado and further processed in either Michigan or Switzerland. The drug is then packaged in New Jersey and marketed nationwide.

After the parties submitted their initial disclosures identifying potential witnesses, Roche and Trimeris moved the Texas district court to transfer the suit to the Eastern District of North Carolina. Roche and Trimeris argued that there were no witnesses or sources of proof within 100 miles of the Eastern District of Texas, and that the bulk of key documentary evidence, as well as several party and non-party witnesses, were located either within the Eastern District of North Carolina, or within 100 miles thereof.

The Eastern District of Texas denied defendants' motion. The court reasoned that this was a “decentralized” case, given the various locations of witnesses, and transfer would merely shift inconveniences from some witnesses to others. The court further noted that it was able to subpoena one non-party witness, Dr. Nancy Chang (who lived in Texas, but more than 100 miles from the district), for attendance at trial. The district court also noted that Novartis had already transferred 75,000 pages of electronic documents to its local counsel in Texas.

The Federal Circuit granted Roche and Trimeris' writ of mandamus, holding that, as in its most recent decision regarding venue transfer, In re Genentech, Inc., 566 F.3d 1338 (Fed. Cir. 2009), there is a stark contrast in relevance, convenience and fairness between the two venues. The Federal Circuit reasoned that the accused drug was developed and tested within the Eastern District of North Carolina, and documents and sources of proof remained there. Further, the Eastern District of North Carolina had a local interest in the case because the cause of action calls into question the work and reputation of several individuals residing in or near that district who presumably conduct business in that community. The court further reasoned that there are at least four non-party witnesses residing within 100 miles of the Eastern District of North Carolina who could be compelled for both deposition and trial testimony. On the other hand, the court noted that the Texas district court could not subpoena Dr. Chang for deposition under Fed. R. Civ. P. 45, since she resided more than 100 miles from the district. Finally, the court held that the district court erred in considering the 75,000 pages of electronic documents that Novartis had transferred to its local counsel in Texas. The court stated that Novartis' assertion that these were “Texas” documents was a “fiction,” which appeared to have been created to improperly manipulate the propriety of venue.

Apple Wins Summary Judgment Of Copyright Infringement Against Psystar

In Apple, Inc. v. Psystar Corp., No. 08-03251 (N.D. Cal. Nov. 13, 2009), the U.S. District Court for the Northern District of California granted Apple's motion for summary judgment that Psystar had infringed Apple's copyrights in the Mac OS X operating system software.

Apple sells a line of computers under the “Mac” name as well as an operating system called Mac OS X. The Max OS X license agreement specifically prohibited customers from installing Mac OS X on non-Apple computers. Psystar Corp. sells a line of computers called Open Computers that run on a modified version of Max OS X software. In order to modify Mac OS X, Psystar first bought a copy of the Mac OS X software and installed it on an Apple Mac mini. Next, Psystar copied Mac OS X from the Mac mini onto a non-Apple computer. Once on the non-Apple computer, Psystar modified Max OS X by replacing “kernel” files that prevented Mac OS X from running on non-Apple computers and by replacing the Mac OS X “bootloader,” the file that runs when a computer first comes on and loads portions of the operating system into random access memory. The modified Mac OS X copy became the “master copy” that Psystar used for mass reproduction and installation onto other Psystar computers. Each party moved for summary judgment. Apple alleged that Psystar violated three of its exclusive rights: 1) reproduction; 2) distribution; and 3) the right to create derivative works. Psystar alleged that Apple engaged in copyright misuse by tying Max OS X to Apple hardware.

The District Court granted summary judgment to Apple with respect to its copyright infringement claims. The court first held that Psystar's actions violated Apple's reproduction rights and dismissed Psystar's Section 117(a) “essential step” defense as all but frivolous.

The court next found that Psystar violated Apple's distribution rights. Although Psystar argued that its distribution of modified Mac OS X copies was protected by the first-sale doctrine of 17 U.S. ' 109, the court held that this defense only apples to lawfully made copies, which Psystar's copies were not. The court also held that Psystar's modification of Mac OS X infringed Apple's right to create derivate works, rejecting Psystar's argument that it did not create a derivative work since Apple's source code, object code and kernel extensions were unmodified and it merely replaced entire files with others. The court reasoned that Psystar's modifications amounted to a substantial variation from the underlying copyrighted work.

On Psystar's copyright misuse defense, the court held that Apple did not commit copyright misuse by prohibiting the use of its Mac OS X software on non-Apple computers. The court distinguished Ninth Circuit precedent finding copyright misuse where the copyright holder required a contracting party to use only the copyright holder's copyrighted software. The court reasoned that: “Apple has not prohibited purchasers of Mac OS X from using competitor's products. Rather, Apple has simply prohibited purchasers from using Mac OS X on competitor's products.”

Federal Circuit Opines on Indefiniteness Doctrine

In Ultimax Cement Mfg. Corp. v. CTS Cement Mfg. Corp., 2008-1218, -1439 (Fed. Cir. Dec. 3, 2009), the Federal Circuit reversed a district court's summary judgment ruling and held that a claimed formula was not indefinite even though, with all of its permutations, it yielded over 5,000 possible different compounds.

Plaintiff and defendant both produce rapid-hardening, high-strength cement. In June 2002, plaintiff brought suit, alleging, among other things, that defendant infringed claim 17 of U.S. Patent 6,113,684 (“the '684 patent”). That claim recited, in relevant part: “a hydraulic cement containing CaO, {(K,N,M)4(A,F,Mn,P,T,S)3(cl, SO3)} and a member selected from the group consisting of {C9S3SO3Ca(f cl)2}, C5S2 SO3 and mixtures thereof.” The '684 patent specification redefined common chemical symbols by, for example, stating that “C” represents CaO, “K” represents K2O, etc., for many of the letters used in the claimed compounds. The specification referred to the compound (K,N,M)4(A,F,Mn,P,T,S)3(cl, SO3) as “Crystal X.”

The district court granted defendant's motion for summary judgment that claim 17 of the '684 patent was indefinite because Crystal X encompassed over 5,000 possible compounds. The Federal Circuit reversed and directed the district court to enter summary judgment that claim 17 is not indefinite. The court reasoned that a claim to a formula containing over 5,000 possible combinations is not necessarily ambiguous if it sufficiently notifies the public of the scope of the claims. The court opined that, in this case, if a member of the public made a compound of pure C4A3Cl, or substituted some K molecules for some C molecules, he or she would know that the compound fit within the set of compounds described by the claims.