IP News

In 2011, buySAFE sued Google, alleging infringement of several claims, and Google moved for judgment on the pleadings, arguing that the asserted claims were invalid under section 101. The district court granted Google's motion, and buySAFE appealed.

The Federal Circuit affirmed the district court's finding of invalidity. The panel first identified three categories of matter that are excluded from section 101: “Laws of nature, natural phenomena, and abstract ideas are not patentable.” Id. at 4 (quoting Alice Corp. Pty. Ltd. v. CLS Bank Int'l, 134 S. Ct. 2347, 2354 (2014)). Next, the court used the framework laid out in Alice to determine if the claims fell into an excluded category. First, determine if claims are directed to one of the three excluded categories; second, determine if any additional elements supply “an inventive concept in the physical realm of things and acts ' a new and useful application of the ineligible matter in the physical realm ' that ensures that the patent is on something significantly more than the ineligible matter itself.” Slip op. at 6 (quoting Alice, 134 S. Ct. at 2355, 2357 (internal quotation marks omitted)). Merely invoking the use of a computer, without more, is insufficient to render an abstract idea patentable. See, Slip op. at 7'8.

Applying this framework, the Federal Circuit found that the claims were “squarely about creating a contractual relationship ' a 'transaction performance guaranty”'that is beyond question of ancient lineage.” Id. at 9. The panel also found that the claims' “invocation of computers” with limited and generic functionality “is not even arguably inventive.” Id. Thus, the claims were invalid under section 101.

Federal Circuit Finds 'Unobtrusive' and 'Does Not Distract' Indefinite

On Sept. 10, 2014, a Federal Circuit panel consisting of Judges Taranto and Chen, issued a decision, authored by Judge Chen, in Interval Licensing LLC, Inc. v. AOL, Inc., Apple, Inc., Google, Inc., and Yahoo! Inc., Case Nos. 2013-1282, -1283, -1284, and -1285. Judge Rader was a member of the panel, but retired, and did not participate in the decision, which affirmed the district court's final judgment of indefiniteness for several claims, but vacated the judgment with regard to other non-infringed claims.

Interval owns several patents directed to “an attention manager for occupying the peripheral attention of a person in the vicinity of a display device.” Slip op. at 3. The patents, which share a common specification, describe and claim a system that acquires data from a content provider, and displays images on a device based on that data. The patent defines the term “image” broadly, as “any sensory stimulus ' including ' visual ' and audio imagery.” U.S. Patent 6,034,652 at col. 6, ll. 60'64. The specification contains examples of the images displayed either as screen savers, or as wallpaper.

Interval asserted these patents against a number of defendants, alleging that the defendants' products and software that use pop-up notifications infringed twenty five claims. Of the asserted claims, all but four contain or depend on the phrase “in an unobtrusive manner that does not distract a user.” The district court found the terms “in an unobtrusive manner” and “does not distract” indefinite for two reasons: First, ” the patents fail to provide an objective standard by which to define the scope of the 'unobtrusive manner' phrase” and second “ the determination of whether an accused product would meet the claim limitation depends on its usage in changing circumstances.” Slip op. at 8 (quoting Interval Licensing, LLC v. AOL, Inc., C10-1385MJP, 2013 WL 792791, at 5 (W.D. Wash. Feb. 28, 2013)). The district court also construed a number of disputed claim terms, including “attention manager,” which appeared in the remaining asserted claims. Based on the court's claim construction, the parties stipulated that the claims containing the “obtrusive manner” limitation were invalid as indefinite, and the remaining claims were not infringed. Interval appealed.

The Federal Circuit based its indefiniteness analysis on the Supreme Court's recent opinion in Nautilus, Inc. v. Biosig Instruments, Inc., 134 S. Ct. 2120 (2014), which teaches that a claim is indefinite “if its language, when read in light of the specification and prosecution history, fails to inform, with reasonable certainty, those skilled in the art about the scope of the invention.” Slip Op. at 10 (internal quotations omitted) (quoting Nautilus at 2124). Applying this teaching to Interval's patents, the Federal Circuit found that the phrase “unobtrusive manner” was highly subjective, particularly given that the patents define “image” so broadly. Interval contended that the claim was sufficiently defined because it was tied exclusively to the wallpaper embodiment. The panel was unpersuaded, finding that “the 'unobtrusive manner' phrase has too uncertain a relationship to the patents' embodiments” and that “the wallpaper embodiment does not provide a reasonably clear and exclusive definition, leaving the facially subjective claim language without an objective boundary.” Slip Op. at 17.

In the alternative, Interval argued that a single example presented in the specification saves the “unobtrusive manner” phrase from indefiniteness. Specifically, the Summary of the Invention states that information can be presented “in an unobtrusive manner ' (e.g., the information is presented in areas of a display screen that are not used by displayed information associated with the primary interaction with the apparatus).” '652 patent at col. 2, ll. 15'19. However, the Federal Circuit found that this single example in a lengthy specification was insufficient to define a facially subjective claim term. See,'Slip op. at 18. The panel noted that their decision might have been different “if the phrase had been preceded by 'i.e.' instead of 'e.g.'” Id.

The Federal Circuit also overturned the lower court's construction of “attention manager” and “instructions,” finding them too narrow, and largely adopted Interval's constructions. Accordingly, the panel vacated the district court's judgment of noninfringement, and remanded the case for further proceedings.

Federal Circuit: In Hatch-Waxman, Infringement Based Only on Final ANDA Product

On Aug. 22, 2014, a Federal Circuit panel consisting of Judges Lourie, Dyk, and Reyna, issued a unanimous opinion, authored by Judge Lourie, in Ferring B.V. v. Watson Laboratories, Inc. ' Florida, Case No. 2014-1416. The Federal Circuit affirmed the district court's finding that the asserted patents were not obvious, but reversed the lower court's finding of infringement, and vacated the permanent injunction against Watson.

Ferring owns several patents directed to controlled release tranexamic acid tablets, used to treat heavy menstrual bleeding and marketed under the brand name Lysteda. The patent claims require that the tablets contain about 650 mg of tranexamic acid, and a certain percentage of material that modifies the release of the drug, and that the tranexamic acid have a specified dissolution profile in water, as measured by a particular method. See, Slip op. at 3. Watson filed an Abbreviated New Drug Application (ANDA), seeking the approval of generic tranexamic acid tablets, and was subsequently sued by Ferring for infringement. Watson's tablets contain a core containing 650 mg of tranexamic acid and various other excipients, surrounded by a pH-dependent film coating, designed to resist degradation in water, but to dissolve immediately in acidic conditions such as the stomach.

During discovery, both parties conducted dissolution testing on Watson's ANDA product, and of the hundreds of tablets tested, only four had dissolution profiles that fell near or within the claims. At trial, Ferring also relied on dissolution data generated by Watson on uncoated tablet cores of varying hardness from 13 to 20 kp. Of these, only cores with a hardness greater than 17 kp had dissolution profiles that fell within the claims. Watson subsequently amended its ANDA to require its tablets to have a hardness in the range of 13'16.5 kp, which the FDA approved.

At trial, the district court found that the claims of Ferring's patents were not obvious. The court also found that Watson's ANDA product infringed, because the evidence showed that some coated tablets, and uncoated tablets with a hardness greater than 17 kp, infringed. Accordingly, the court issued a permanent injunction. Watson appealed.

The Federal Circuit affirmed the lower court's finding that the asserted claims were not obvious. The panel noted that the filing of an ANDA, by itself, constitutes only a technical act of infringement, sufficient to grant jurisdiction, but does not ultimately establish infringement. Id. at 12'13. Here infringement “is concerned only with the final, coated commercial tranexamic acid tablets for which Watson sought and was granted FDA approval '.” Id. at 14. Thus, the district court improperly relied on the originally filed ANDA, rather than the amended ANDA which was eventually approved by the FDA, as well as data generated using uncoated tablets, rather than the final ANDA product. Further, the panel was unpersuaded by the few anomalous finished tablets which infringed, based on expert testimony that the coating on those tablets was defective. Based on these findings, the Federal Circuit reversed the district court's judgment of infringement, and vacated the injunction against Watson.

Howard Shire is Editor-in-Chief of this newsletter and a Partner in the New York office of Kenyon & Kenyon LLP. Wyatt Delfino is an Associate with the firm.

Federal Circuit Applies Alice to Invalidate Online Transaction Patent

On Sept. 3, 2014, a Federal Circuit panel consisting of Judges Taranto and Hughes, issued a decision, authored by Judge Taranto, in buySAFE, Inc. v. Google Inc., Case No. 2013-1575. Judge Rader was a member of the panel, but retired, and did not participate in the decision. The panel upheld the district court's decision, finding that buySAFE's asserted claims were invalid under 35 U.S.C. '101.

buySAFE owned a patent claiming methods and computer programs for guaranteeing a party's performance of its online transactions. The broadest claim recited a method in which: 1) a request for a performance guarantee for an online commercial transaction is sent to a provider's computer; 2) the computer processes the request by underwriting the requesting party, guaranteeing the transaction; and 3) the computer offers, via a computer network, a transaction guarantee that binds the transaction upon its closing. See, Slip op. at 3. Other claims were drawn to specific methods of guaranteeing the transaction; still others were drawn to computer programs that carried out the methods.

In 2011, buySAFE sued Google, alleging infringement of several claims, and Google moved for judgment on the pleadings, arguing that the asserted claims were invalid under section 101. The district court granted Google's motion, and buySAFE appealed.

The Federal Circuit affirmed the district court's finding of invalidity. The panel first identified three categories of matter that are excluded from section 101: “Laws of nature, natural phenomena, and abstract ideas are not patentable.” Id. at 4 (quoting Alice Corp. Pty. Ltd. v. CLS Bank Int'l, 134 S. Ct. 2347, 2354 (2014)). Next, the court used the framework laid out in Alice to determine if the claims fell into an excluded category. First, determine if claims are directed to one of the three excluded categories; second, determine if any additional elements supply “an inventive concept in the physical realm of things and acts ' a new and useful application of the ineligible matter in the physical realm ' that ensures that the patent is on something significantly more than the ineligible matter itself.” Slip op. at 6 (quoting Alice, 134 S. Ct. at 2355, 2357 (internal quotation marks omitted)). Merely invoking the use of a computer, without more, is insufficient to render an abstract idea patentable. See, Slip op. at 7'8.

Applying this framework, the Federal Circuit found that the claims were “squarely about creating a contractual relationship ' a 'transaction performance guaranty”'that is beyond question of ancient lineage.” Id. at 9. The panel also found that the claims' “invocation of computers” with limited and generic functionality “is not even arguably inventive.” Id. Thus, the claims were invalid under section 101.

Federal Circuit Finds 'Unobtrusive' and 'Does Not Distract' Indefinite

On Sept. 10, 2014, a Federal Circuit panel consisting of Judges Taranto and Chen, issued a decision, authored by Judge Chen, in Interval Licensing LLC, Inc. v. AOL, Inc., Apple, Inc., Google, Inc., and Yahoo! Inc., Case Nos. 2013-1282, -1283, -1284, and -1285. Judge Rader was a member of the panel, but retired, and did not participate in the decision, which affirmed the district court's final judgment of indefiniteness for several claims, but vacated the judgment with regard to other non-infringed claims.

Interval owns several patents directed to “an attention manager for occupying the peripheral attention of a person in the vicinity of a display device.” Slip op. at 3. The patents, which share a common specification, describe and claim a system that acquires data from a content provider, and displays images on a device based on that data. The patent defines the term “image” broadly, as “any sensory stimulus ' including ' visual ' and audio imagery.” U.S. Patent 6,034,652 at col. 6, ll. 60'64. The specification contains examples of the images displayed either as screen savers, or as wallpaper.

Interval asserted these patents against a number of defendants, alleging that the defendants' products and software that use pop-up notifications infringed twenty five claims. Of the asserted claims, all but four contain or depend on the phrase “in an unobtrusive manner that does not distract a user.” The district court found the terms “in an unobtrusive manner” and “does not distract” indefinite for two reasons: First, ” the patents fail to provide an objective standard by which to define the scope of the 'unobtrusive manner' phrase” and second “ the determination of whether an accused product would meet the claim limitation depends on its usage in changing circumstances.” Slip op. at 8 (quoting Interval Licensing, LLC v. AOL, Inc., C10-1385MJP, 2013 WL 792791, at 5 (W.D. Wash. Feb. 28, 2013)). The district court also construed a number of disputed claim terms, including “attention manager,” which appeared in the remaining asserted claims. Based on the court's claim construction, the parties stipulated that the claims containing the “obtrusive manner” limitation were invalid as indefinite, and the remaining claims were not infringed. Interval appealed.

The Federal Circuit based its indefiniteness analysis on the Supreme Court's recent opinion in Nautilus, Inc. v. Biosig Instruments, Inc., 134 S. Ct. 2120 (2014), which teaches that a claim is indefinite “if its language, when read in light of the specification and prosecution history, fails to inform, with reasonable certainty, those skilled in the art about the scope of the invention.” Slip Op. at 10 (internal quotations omitted) (quoting Nautilus at 2124). Applying this teaching to Interval's patents, the Federal Circuit found that the phrase “unobtrusive manner” was highly subjective, particularly given that the patents define “image” so broadly. Interval contended that the claim was sufficiently defined because it was tied exclusively to the wallpaper embodiment. The panel was unpersuaded, finding that “the 'unobtrusive manner' phrase has too uncertain a relationship to the patents' embodiments” and that “the wallpaper embodiment does not provide a reasonably clear and exclusive definition, leaving the facially subjective claim language without an objective boundary.” Slip Op. at 17.

In the alternative, Interval argued that a single example presented in the specification saves the “unobtrusive manner” phrase from indefiniteness. Specifically, the Summary of the Invention states that information can be presented “in an unobtrusive manner ' (e.g., the information is presented in areas of a display screen that are not used by displayed information associated with the primary interaction with the apparatus).” '652 patent at col. 2, ll. 15'19. However, the Federal Circuit found that this single example in a lengthy specification was insufficient to define a facially subjective claim term. See,'Slip op. at 18. The panel noted that their decision might have been different “if the phrase had been preceded by 'i.e.' instead of 'e.g.'” Id.

The Federal Circuit also overturned the lower court's construction of “attention manager” and “instructions,” finding them too narrow, and largely adopted Interval's constructions. Accordingly, the panel vacated the district court's judgment of noninfringement, and remanded the case for further proceedings.

Federal Circuit: In Hatch-Waxman, Infringement Based Only on Final ANDA Product

On Aug. 22, 2014, a Federal Circuit panel consisting of Judges Lourie, Dyk, and Reyna, issued a unanimous opinion, authored by Judge Lourie, in Ferring B.V. v. Watson Laboratories, Inc. ' Florida, Case No. 2014-1416. The Federal Circuit affirmed the district court's finding that the asserted patents were not obvious, but reversed the lower court's finding of infringement, and vacated the permanent injunction against Watson.

Ferring owns several patents directed to controlled release tranexamic acid tablets, used to treat heavy menstrual bleeding and marketed under the brand name Lysteda. The patent claims require that the tablets contain about 650 mg of tranexamic acid, and a certain percentage of material that modifies the release of the drug, and that the tranexamic acid have a specified dissolution profile in water, as measured by a particular method. See, Slip op. at 3. Watson filed an Abbreviated New Drug Application (ANDA), seeking the approval of generic tranexamic acid tablets, and was subsequently sued by Ferring for infringement. Watson's tablets contain a core containing 650 mg of tranexamic acid and various other excipients, surrounded by a pH-dependent film coating, designed to resist degradation in water, but to dissolve immediately in acidic conditions such as the stomach.

During discovery, both parties conducted dissolution testing on Watson's ANDA product, and of the hundreds of tablets tested, only four had dissolution profiles that fell near or within the claims. At trial, Ferring also relied on dissolution data generated by Watson on uncoated tablet cores of varying hardness from 13 to 20 kp. Of these, only cores with a hardness greater than 17 kp had dissolution profiles that fell within the claims. Watson subsequently amended its ANDA to require its tablets to have a hardness in the range of 13'16.5 kp, which the FDA approved.

At trial, the district court found that the claims of Ferring's patents were not obvious. The court also found that Watson's ANDA product infringed, because the evidence showed that some coated tablets, and uncoated tablets with a hardness greater than 17 kp, infringed. Accordingly, the court issued a permanent injunction. Watson appealed.

The Federal Circuit affirmed the lower court's finding that the asserted claims were not obvious. The panel noted that the filing of an ANDA, by itself, constitutes only a technical act of infringement, sufficient to grant jurisdiction, but does not ultimately establish infringement. Id. at 12'13. Here infringement “is concerned only with the final, coated commercial tranexamic acid tablets for which Watson sought and was granted FDA approval '.” Id. at 14. Thus, the district court improperly relied on the originally filed ANDA, rather than the amended ANDA which was eventually approved by the FDA, as well as data generated using uncoated tablets, rather than the final ANDA product. Further, the panel was unpersuaded by the few anomalous finished tablets which infringed, based on expert testimony that the coating on those tablets was defective. Based on these findings, the Federal Circuit reversed the district court's judgment of infringement, and vacated the injunction against Watson.

Howard Shire is Editor-in-Chief of this newsletter and a Partner in the New York office of Kenyon & Kenyon LLP. Wyatt Delfino is an Associate with the firm.