Applying Bilski: Order Requiring Further Briefing Highlights Unresolved Questions

In an order requiring further briefing re motion for summary judgment of invalidity based on lack of patentable subject matter, the court notes:

"The Supreme Court has issued an opinion in Bilski v. Kappos, 561 U.S. __(2010).

The parties are ORDERED to submit supplemental briefing regarding the effect of the Bilski decision on the outstanding Motion for Summary Judgment. The parties shall submit initial briefs of no more than 20 pages by July 12, 2010, and response briefs of no more than 12 pages by July 19, 2010.

The Court wishes for the parties to address the following questions in addition to such other issues as the parties deem relevant to the Court's decision:

(1) Whether Plaintiff's patent claims comprise "abstract ideas" under analogous Supreme Court and Federal Circuit precedent, or whether Plaintiff's patent claims comprise "applications" of abstract ideas. See Bilski, slip. op. at 12-15.

(2) Whether the Federal Circuit's decisions in AT & T Corp. v. Excel Comms., Inc., 172 F.3d 1352 (Fed. Cir. 1999), and State Street Bank & Trust Co. v. Signature Fin. Group, 149 F.3d 1368 (Fed Cir. 1998), remain valid precedent, and if so, whether Plaintiff's patent claims are valid in light of the holdings of
those opinions.

(3) What the Supreme Court meant by its concluding statement:
It may be that the Court of Appeals thought it needed to make the machine-or-transformation test exclusive precisely because its case law had not adequately identified less extreme means of restricting business method patents, including (but not limited to) application of our opinions in Benson, Flook, and Diehr. In disapproving an exclusive machine-or-transformation test, we by no means foreclose the Federal Circuit’s development of other limiting criteria that further the purposes of the Patent Act and are not inconsistent with its text.

Bilski, 561 U.S. __, slip op. at 16. The parties are encouraged to identify precedential or persuasive caselaw that identify "other limiting criteria" relevant to the present patent claims."

Big Baboon Corporation v. Dell, Inc., 2-09-cv-01198 (CACD June 28, 2010, Order) (Wilson, J.)

False Marking Intent to Deceive may be Inferred from Marking of Expired Patent Numbers

Defendant's motion to dismiss plaintiff's false marking claim for failure to plead a fraud-based claim with particularity was denied. "While [Brinkmeier v. Graco Children's Prods., Inc., 684 F. Supp. 2d 548, 553 (D. Del. 2010)] declined to draw an inference of deceptive intent from pleadings that the defendant knowingly marked certain articles with an expired patent number, this ruling departs from [Clontech Labs. Inc. v. Invitrogen Corp., 406 F.3d 1347, 1352 (Fed. Cir. 2005)] and subsequent Federal Circuit case law. . . . At the pleadings stage -- viewing all facts in the light most favorable to the plaintiff -- allegations that a defendant knowingly mismarked an article with an expired patent number (i.e. a false statement with knowledge) allows a court to infer intent to deceive the public. . . . Armed with actual documentation that a product was falsely marked, a court may draw an inference of the defendant's knowledge simply by the finite nature of patents and the ordeal an entity must go through to actively create and maintain a patent. . . . As a sophisticated corporation with patent experience and available legal counsel, Plaintiff creates an inference that Defendant knew the patent expired. Any argument to the contrary ignores the time sensitive nature of patents and the obligations incumbent on patent holders to protect their legal rights."

Patent Compliance Group Inc. v. InterDesign Inc., 3-10-cv-00404 (TXND June 28, 2010, Order) (Solis, J.)

Settlement Does Not Justify Vacating Claim Construction

The parties' motion to vacate claim construction following settlement was denied. "[The] patentees argue vacating the claim construction order would promote the public policy in favor of settlement. . . . [T]he Court disagrees that the overriding public policy is in favor of vacating an otherwise valid court order because one or more of the parties, after settlement, finds that order inconvenient. . . . Not only would such a practice come dangerously close to engendering improper advisory opinions by courts, it might also encourage inefficiencies through repetitive litigation. . . . Had the parties wished to resolve their disputes in a matter that did not involve public proceedings, there were ways to do so. . . . The parties did not choose that option and therefore cannot now expect that orders relating to the dispute, properly entered and unrelated to settlement, will now be vacated."

Aurora, Colorado, City of v. PS Systems, Inc. et al., 1-07-cv-02371 (COD July 2, 2010, Order) (Brimmer, J.)

Qui tam Plaintiff Cites Professor Crouch's Question to Readers as Proof that Patent Expiration Dates are not Readily Ascertainable

From the Complaint:

“The expiration of a United States patent is not readily ascertainable by members of the American Public at the time of the product purchase. The patent number itself does not provide members of the public with the expiration date of the patent. Basic information about a patent, such as the filing, issue, and priority dates of the associated with a particular U.S. patent number are available at, for example, the website of the United States Patent and Trademark Office. Access to the Internet, however, is necessary to retrieve that information and even after retrieving that information, a consumer most likely does not know the rules governing the term of a patent based on the filing and priority dates. For example, Dennis Crouch, the esteemed patent law professor who writes the popular web log “Patently-O” solicited his readers for a “process flow-chart” for “determining whether an issued patent is still in force.” See http://www.patentlyo.com/patent/2010/06/calculating-patent-term.html. That a patent lawyer as skilled as Professor Crouch requires a flow chart to determining whether a patent is still in force is clear indication that the American Public at large cannot perform this calculation at the point of purchasing products. And because Defendant has chosen to either neglect or abdicate its duty to appropriately mark its products, it shifts its duty to the American Public, who necessarily suffer as a result of the false mark.”

North Texas Patent Group, Inc. v. The Hain Celestial Group, Inc., 3-10-cv-01310 (TXED July 6, 2010, Complaint)

Pay for Delay Settlement Creates Substantial Controversy Sufficient to Support Challenge to Lipitor® Patents

The court could exercise subject matter jurisdiction over a defendant generic drug manufacturer’s invalidity and noninfringement counterclaims directed to patents for which defendant had filed a Paragraph III certification (indicating that its generic drug would not go on the market until after expiration of the patents). A settlement agreement between plaintiff and another generic drug manufacturer who filed the first Paragraph IV certifications concerning the patents-in-suit created a concrete and imminent harm to defendant because it called for the first-to-file generic company to delay the commercial launch of its drug -- which in turn would delay the start of its 180-day period of market exclusivity -- for 20 months after one of the patents covering the drug expired. "[T]he injury [defendant] identifies is its inability to obtain FDA approval (and sell its product) between the . . . expiration of [one of plaintiff’s patents] and 180 days after the date [the first-to-file generic company] begins marketing its product sometime after [the 20-month delay called for in the settlement agreement]. The Federal Circuit has recognized, in the context of the Hatch-Waxman Act, that the creation of 'an independent barrier to the drug market' by a brand drug company 'that deprives [the generic company] of an economic opportunity to compete' satisfies the injury-in-fact and causation requirements of Article III standing. . . . Thus, [defendant] has alleged a potentially cognizable injury." Such injury was also sufficiently imminent because the 20-month delay was required by the settlement agreement. "[T]he alleged delay in marketing [the first-to-file generic company’s drug] is not a mere risk but a certainty. At the time that [defendant] filed its counterclaims, there was no doubt that, following the . . . expiration of the . . . patent, [defendant] would be precluded from obtaining FDA approval and going to market until at least [the end of the 20-month delay]."

Pfizer Inc. et al v. Apotex Inc. et al., 1-08-cv-07231 (ILND June 30, 2010, Memorandum Opinion & Order) (Dow, J.)

AstraZeneca CRESTOR® Patent Not Invalid, Not Unenforceable

Following a bench trial the court found that plaintiffs' patent was not invalid as obvious based in part on secondary considerations of nonobviousness. "The evidence demonstrates that there was much skepticism in the industry concerning the safety of rosuvastatin, and the Court finds it telling that no other pharmaceutical companies attempted to create a comparable product despite research in the area and economic incentives of entering an additional player in the statin market." The court also determined that plaintiffs' patent was not unenforeceable for inequitable conduct. "[T]he evidence produced by Plaintiffs collectively suggests a time of confusion, personnel change, and overwork in the [plaintiff's] Patent Department such that it would not be unreasonable to infer from this 40 day period that the [Eurpoean Search Report] had merely been caught in a stack of papers."

AstraZeneca Pharm. LP et al v. Aurobindo Pharma Ltd. et al., 1-07-cv-00810 (DED June 29, 2010, Memorandum Opinion) (Farnan, J.)

Chief Judge Rader: Losing Plaintiff's Failure to Dismiss Following Claim Construction Does Not Warrant Award of Attorneys' Fees

Successful defendants' motion for attorneys' fees under Section 285 was denied, notwithstanding defendant's letter following claim construction requesting that plaintiff dismiss its infringement claims. "[Defendant] points to a letter that it sent to [plaintiff] that asked [plaintiff] to dismiss its infringement claims in light of the court's claim construction. Had [plaintiff] complied with [defendant's] demands, [defendant] argues, none of the additional work to prepare for summary judgment motions and trial would have been necessary. Ironically, [defendant's] argument itself borders on frivolous. [Defendant] points to no authority that would create a duty in a patentee to comply with an accused infringer's self-serving letter [demanding a dismissal following claim construction] denigrating its opponent's case, even though the accused infringer turns out to be correct on the merits. Such a duty would be especially inappropriate where, as here, the claim construction that purportedly rendered the patentee's case futile was actually a compromise between the two sides' proposed constructions."

Performance Pricing, Inc. v. Google Inc. et al., 2-07-cv-00432 (TXED June 29, 2010, Order) (Rader, C.J.)