IP News

The claims of the application that led to Dr. Quake's patent, U.S. Patent No. 8,008,018, originally required “measuring the presence of different target sequences” in discrete samples and “ analyzing a number of the discrete samples to obtain results distinguishing different target sequences.” Id. at 1371. In 2011, Quake replaced these claims with new claims requiring “conducting massively parallel DNA sequencing of DNA fragments randomly selected from the mixture of fetal and maternal genomic DNA” and comparing the amounts of chromosomes presumed to be normal and those suspected of aneuploidy. Id.

Quake's specification discloses that massively parallel sequencing (MPS) can be used to count chromosomes according to the invention using the Illumina sequencing platform. MPS can be performed by “random” or “targeted” methods. The “random” method amplifies all DNA in the sample, while the “targeted” method amplifies a specific target sequence in a sample. Id. at 1370.

Dr. Lo's method uses random MPS. According to CUHK, in 2011, Quake discovered that CUHK had claimed the “random sequencing” method and replaced its original claims with new claims so as to explicitly cover random MPS methods. The PTAB declared interferences to determine who invented the random sequencing method. Lo argued that the specification of Quake's patent only disclosed a targeted sequencing method, and that Quake's new claims were, therefore, unsupported by the specification. Id. at 1372. The Board agreed, finding Quake's claims unpatentable for lack of written description. Id.

Stanford appealed to the Northern District of California, pursuant to 35 U.S.C. §146. After engaging in discovery and full expert discovery, CUHK notified the court of a jurisdictional issue regarding §146 citing to a district court decision in which it was determined that, under the America Invents Act (AIA), an interference decision from the PTAB could only be appealed to the Federal Circuit for interferences declared after Sept. 15, 2012. After the Federal Circuit affirmed that decision (see, Biogen MA, Inc. v. Japanese Found. for Cancer Research, 785 F.3d 648 (Fed. Cir. 2015)), the Northern District of California transferred the instant case to the Federal Circuit.

On appeal, the panel first declined Stanford's request for the court to reconsider its decision in Biogen, confirming that it was bound by Biogen. Id. at 1374. The panel then addressed the question whether, although the district court lacked jurisdiction to review the PTAB's decision, the panel could nevertheless rely on information elicited during discovery before the district court. The panel concluded that it could not, finding that “activities in district court are a nullity when the district court lacks subject matter jurisdiction.” Id.

The panel then evaluated the substantive question on appeal: whether the specification discloses the random MPS method covered by the later-added claims, such that a person of ordinary skill in the art (POSA) would have concluded that the Quake inventors were in possession of the claimed method under 35 U.S.C. §112. Id. at 1375. The dispute centered on whether the reference to Illumina products in the specification adequately disclosed random, as opposed to targeted, MPS. The panel noted that the Board relied heavily on the testimony of Dr. Gabriel, CUHK's expert, in reaching its conclusion that the specification did not.

The panel found that the PTAB erred in relying on portions of Dr. Gabriel's testimony regarding references related to the Roche 454 platform, a platform not mentioned in the specification. Id. at 1377. According to the panel, the PTAB failed to explain the relationship between the Roche 454 platform and the Illumina platform. Thus, the panel found no basis to conclude that the discussed platform or methods would have been applicable to Illumina. Id. at 1377.

In addition, the panel found that the PTAB improperly based its decision on Dr. Gabriel's testimony that a POSA would have found that the specification does not preclude targeted MPS. Id. at 1377-78. According to the panel, this was not the relevant inquiry, as the relevant question is whether the specification disclosed random MPS.

Because the PTAB failed to properly evaluate whether the patent disclosed random MPS, the panel vacated and remanded for the Board's reconsideration.

Federal Circuit Vacates Unclear Application of “Causal Nexus” Requirement to Prove Irreparable Harm

On June 27, 2011, a Federal Circuit panel of Judges Lourie, Taranto, and Chen issued a unanimous opinion, authored by Judge Taranto, in Genband US LLC v. Metaswitch Networks Corp., 861 F.3d 1378 (Fed. Cir. 2017). Because the district court may have applied a too stringent interpretation of the irreparable harm requirement, the panel vacated the district court's denial of a permanent injunction and remanded the case for reconsideration.

The dispute involves Genband and Metaswitch, two companies that compete in the voice-communications over Internet Protocol or “voice over IP” (VoIP) services space. Genband, 861 F.3d at 2. Genband sued Metaswitch for infringement of seven patents in the Eastern District of Texas. A jury found the claims infringed and not invalid. Id. at 3.

Following a bench trial, the district court denied Genband's request for a permanent injunction based solely on the determination that Genband failed to demonstrate irreparable harm. Id. First, the district court held that Genband did not prove a “causal nexus” between the alleged irreparable harm (based on loss sales) and the infringing features of Metaswitch's products. Second, the district court found that, although Genband did not unreasonably delay in suing Metaswitch, it did delay in suing for several years after analyzing Metaswitch's products and did not seek a preliminary injunction. Id. at 3-6.

On appeal, the panel reviewed the district court's decision whether to grant a permanent injunction for abuse of discretion. The panel explained that where it is “not evident that a district court has applied the correct legal standard in exercising its discretion, we may vacate and remand for the district court to do so.” Id. at 6.

The panel found that Genband offered evidence that Metaswitch was making sales in direct competition with it, causing Genband to lose sales and thereby to suffer harms of the type often found irreparable. But the district court held that Genband had not met a requirement that is part of the irreparable-injury component of eBay, namely, the requirement of “some causal nexus” between the infringing features of the infringer's products and the sales lost to the patentee. The panel observed that, in its ruling, the district court recited language from Apple, Inc. v. Samsung Electronics Co. (Apple II), 695 F.3d 1370, 1375 (Fed. Cir. 2012), that the “patentee must … show that the infringing feature drives consumer demand for the consumer product.” Id. at 4, 8.

The panel analyzed the “drive demand” language from Apple II, finding that it could be interpreted to require either that the infringing feature be: 1) “the driver” of consumer purchasing decisions, which would require proof that almost no buyers would buy the product without the infringing feature; or 2) “a driver” of consuming purchasing decisions. Id. at 8. The panel found that since at least Apple, Inc. v. Samsung Electronics Co. (Apple III), 735 F.3d 1352, 1364 (Fed. Cir. 2013), however, it has been clear that the less demanding “a driver” standard is the correct one to apply in a multi-consumer multi-feature context. Id. at 8-9. Examining language from Apple III and Apple, Inc. v. Samsung Electronics Co. (Apple IV), 809 F.3d 633, 641-42 (Fed. Cir. 2015), the panel explained that the “causal nexus” requirement only requires “some connection” between the patented features and demand for the infringing products, such as evidence that the patented feature is one of several features that drive demand for the infringing product. Genband, 861 F.3d at 10-12.

The panel noted that in the present case, the district court merely stated that Genband invoked the less stringent Apple III and Apple IV standards, without affirming its adoption of the standards. Thus, the panel had insufficient basis for inferring that the district court correctly applied the standards laid out in Apple III and Apple IV, rather than a different, unduly stringent, standard. The panel also decided that it was not in a position to reach the ultimate outcome in this case under the Apple III and Apple IV standards, as the district court's ruling failed to explain why it found Genband's evidence of irreparable harm deficient.

The panel, therefore, vacated the denial of the motion for a permanent injunction and remanded for reconsideration.

*****
Jeff Ginsberg is a Partner of Patterson Belknap Webb & Tyler LLP and Assistant Editor of this newsletter. Dorothy LeRay is an associate at the firm.