United States: Last Month At The Federal Circuit - October, 2009

Contents

  • Where There Is No Clear Disavowal of Claim Scope, a Patentee's Express Definition of a Claim Term Controls
    Martek Biosciences Corp. v. Nutrinova, Inc.
    Nos. 08-1459, -1476 (Fed. Cir. Sept. 3, 2009)
    [Appealed from D. Del., Chief Judge Sleet]
  • Use of the Term "Comprising" Does Not Render a Claim Anticipated by a Device That Contains Less Than What Is Claimed
    In re Skvorecz
    No. 08-1221 (Fed. Cir. Sept. 3, 2009)
    [Appealed from Board]
  • Res Judicata Applies When Device Accused in Second Suit Remains Unchanged with Respect to Claim Limitations at Issue in First Suit
    Nystrom v. Trex Co. No. 09-1026 (Fed. Cir. Sept. 8, 2009)
    [Appealed from E.D. Va., Judge Davis]
  • Structural and Functional Analysis of Disclosed and Prior Art Elements Are Required When Means-Plus-Function Limitations Are at Issue
    Fresenius USA, Inc. v. Baxter International, Inc.
    Nos. 08-1306, -1331 (Fed. Cir. Sept. 10, 2009) [
    Appealed from N.D. Cal., Judge Armstrong]
  • Federal Circuit Vacates $358 Million Jury Award in Microsoft Infringement Case
    Lucent Technologies, Inc. v. Gateway, Inc.
    Nos. 08-1485, -1487, -1495 (Fed. Cir. Sept. 11, 2009)
    [Appealed from S.D. Cal., Judge Huff]
  • 35 U.S.C. § 121 Safe Harbor from Double Patenting Rejections Does Not Apply to Continuation Applications
    Amgen Inc. v. F. Hoffman-La Roche Ltd.
    Nos. 09-1020, -1096 (Fed. Cir. Sept. 15, 2009) [Appealed from D. Mass., Judge Young]
  • Claims to Methods of Optimizing Therapeutic Efficacy Are Patent-Eligible Subject Matter Under 35 U.S.C. § 101
    Prometheus Laboratories, Inc. v. Mayo Collaborative Services
    No. 08-1403 (Fed. Cir. Sept. 16, 2009)
    [Appealed from S.D. Cal., Judge Houston]
  • Judgment of No Direct Infringement Reversed in Part Due to Application of Disclaimer Inconsistent with Claim Construction Order
    Vita-Mix Corp. v. Basic Holding, Inc.
    Nos. 08-1479, -1517 (Fed. Cir. Sept. 16, 2009)
    [Appealed from N.D. Ohio, Judge Gaughan]
  • Patentee Who Retains Substantial Rights in Patent Must Join Exclusive Licensee in Infringement Suit Despite Terms of License
    AsymmetRx, Inc. v. Biocare Medical, LLC
    No. 09-1094 (Fed. Cir. Sept. 18, 2009)
    [Appealed from D. Mass., Judge Stearns]
  • Written Description and Prosecution History May Trump the Plain Language of the Claims and the Doctrine of Claim Differentiation During Claim Construction
    Edwards Lifesciences LLC v. Cook Inc.
    No. 09-1006 (Fed. Cir. Sept. 22, 2009)
    [Appealed from N.D. Cal., Judge White]
  • Absent Evidence of Cataloging Date, a Reference Registered at the Copyright Offi ce and Cataloged in Commercial Databases May Not Be "Publicly Accessible" Prior Art
    In re Lister
    No. 09-1060 (Fed. Cir. Sept. 22, 2009)
    [Appealed from Board]
  • Genuine Issues of Material Fact Preclude SJ on Breach of a Nondisclosure Agreement Due to Misuse of Confidential Information
    Kara Technology Inc. v. Stamps.com, Inc.
    Nos. 09-1027, -1028 (Fed. Cir. Sept. 24, 2009)
    [Appealed from C.D. Cal., Judge Marshall]
  • Patent Claiming a Method of Treatment Was Not Enabled Where It Failed to Establish Utility
    In re '318 Patent Infringement Litigation
    Nos. 08-1594, 09-1070, -1088 (Fed. Cir. Sept. 25, 2009)
    [Appealed from D.N.J., Judge Pisano, and D. Del., Judge Robinson]
  • Failure to Provide Unpublished Information About Less Similar Compounds Is Not Inequitable
    AstraZeneca Pharmaceuticals LP v. Teva Pharmaceuticals USA, Inc.
    Nos. 08-1480, -1481 (Fed. Cir. Sept. 25, 2009)
    [Appealed from D.N.J., Judge Pisano]
  • Communications from the Government, Reinforced by Its Representations to the Federal Circuit, Can Establish the Applicability of § 1498(a)
    Advanced Software Design Corp. v. Federal Reserve Bank of St. Louis
    No. 08-1152 (Fed. Cir. Sept. 30, 2009)
    [Appealed from E.D. Mo., Judge Perry]
  • Plaintiff Lacked Standing to Sue for Patent Infringement Where an Inventor Validly Transferred His Title to a Third Party Before Reducing It to Practice
    Board of Trustees of Leland Stanford Junior University v. Roche Molecular Systems, Inc.
    Nos. 08-1509, -1510 (Fed. Cir. Sept. 30, 2009)
    [Appealed from N.D. Cal., Judge Patel]

SPOTLIGHT INFO:

In August 2007, the PTO published its Final Rules, entitled "Changes to Practice for Continued Examination Filings, Patent Applications Containing Patentably Indistinct Claims and Examination of Claims in Patent Applications." 72 Fed. Reg. 46716-46843 (Aug. 21, 2007). The Final Rules included various regulations designed to limit the practice of filing continuation applications and requests for continued examination. The Final Rules provided several restrictions, such as the proposed "Continuation Rule," which would have limited an applicant to only two continuation applications per family as a matter of right. Similarly, the "RCE Rule" would have allowed one request for continued examination per application family as a matter of right. If an applicant wished to file a subsequent continuation application or RCE, however, the applicant would have had to seek permission from the PTO and demonstrate why the additional filing was necessary. In addition, the "Claims Rule" of the Final Rules proposed that an applicant could only file five independent claims and twenty-five total claims per application. If an applicant wished to file more than five independent claims or more than twenty-five total claims, then the applicant would be required to supply information to the PTO about the claimed invention. These Final Rules were intended to become effective in November 2007.

Shortly after the Final Rules were published, however, Dr. Triantafyllos Tafas and GlaxoSmithKline ("GSK") filed motions to enjoin the Final Rules in the Eastern District of Virginia. The district court granted the request and temporarily enjoined the rules, pending the outcome of the litigation. In April 2008, the district court issued a final ruling in favor of Tafas and GSK, holding that the PTO had exceeded its authority, and permanently enjoining the PTO from implementing the Final Rules. In March 2009, on appeal, a divided panel of the Federal Circuit affirmed that judgment in part and reversed it in part. In July 2009, the Federal Circuit vacated the divided-panel decision and agreed to hear the matter en banc. On October 8, 2009, however, GSK and the PTO announced that they would jointly move to dismiss the litigation over the Final Rules. GSK and the PTO filed the joint motion the next day. As a result, the Final Rules will not be implemented, and the patent system that existed before this litigation will remain in place.

Where There Is No Clear Disavowal Of Claim Scope, A Patentee's Express Definition Of A Claim Term Controls
Article by John W. Cox

Judges: Newman, Lourie (dissenting-in-part), Rader (dissenting-in-part, joining Lourie), Gajarsa (author), Moore

[Appealed from D. Del., Chief Judge Sleet]

In Martek Biosciences Corp. v. Nutrinova, Inc., Nos. 08-1459, -1476 (Fed. Cir. Sept. 3, 2009), the Federal Circuit affi rmed the district court's denial of JMOL that the claims of Martek Biosciences Corp.'s ("Martek") U.S. Patent No. 5,340,594 ("the '594 patent") were invalid and that Nutrinova, Inc., Nutrinova Nutrition Specialties and Food Ingredients GmbH, and Lonza, Ltd. (collectively "Lonza") did not infringe claims of U.S. Patent No. 6,410,281 ("the '281 patent"). The Court also found that the district court did not abuse its discretion in excluding Lonza's prior inventorship evidence, and that the district court correctly construed the term "non-chloride sodium salt." Finally, the Federal Circuit reversed the district court's grant of JMOL that the asserted claims of Martek's U.S. Patent No. 6,451,567 ("the '567 patent") were invalid and reversed the district court's construction of the term "animal" in Martek's U.S. Patent No. 5,698,244 ("the '244 patent").

Martek and Lonza make and sell products containing docosahexaenoic acid ("DHA"), an essential omega-3 fatty acid involved in organ development. Because the human body produces limited quantities of DHA, it is desirable to provide supplemental DHA.

Martek asserted that Lonza infringed claims of the '594, '281, '567, and '244 patents, which relate to specifi ed microorganisms that are useful for the commercial production of DHA. Lonza argued that the asserted claims were invalid under 35 U.S.C. §§ 102, 103, and 112. The district court construed the contested claim terms and, based on the construction, Martek stipulated that Lonza did not infringe the asserted claims of the '244 patent, but preserved its right to appeal the court's construction of "animal." A jury then found the remaining asserted claims infringed and not invalid, and further found that Lonza's infringement of the '281 patent claims was willful. The district court granted Lonza's motion for JMOL that the '567 patent claims were invalid for lack of enablement, and Martek's motion for a permanent injunction. Both parties appealed.

On appeal, Lonza argued that the '594 patent claims were invalid as anticipated by WO 89/00606 and that the jury erred in finding that the application was not prior art against the '594 patent. Lonza argued that substantial evidence did not support the jury's fi nding that the '594 patent claims were entitled to the priority date of an abandoned application fi led in 1988 ("the 1988 application"). Specifically, Lonza argued that two claim limitations, namely, "mixed culture" and "food product," were not described in the 1988 application.

The Federal Circuit found that Martek's expert explained how a person of ordinary skill in the art would recognize that at least one passage in the 1988 application disclosed the process of extracting lipids from a mixed culture of fermenting microorganisms. Accordingly, the Court held that the text of the 1988 application, in light of Martek's expert's testimony, provided substantial evidence to support the fi nding that the application met the written description requirement for the "mixed culture" limitation.

Noting that a patent claim is not necessarily invalid for lack of written description just because it is broader than the specifi c examples disclosed, the Court rejected Lonza's argument that the jury could not reasonably rely on the expert's interpretation of the 1988 application because the application did not contain any working examples that consolidated cells from different strains. Further, the Court disagreed with Lonza's argument that the 1988 application taught away from growing the two strains together. The Court found no evidence to suggest that the two strains could not be grown together. Therefore, the Court found substantial evidence to support the jury's finding that the 1988 application adequately described the "mixed culture" limitation of the claims.

Moreover, the Court found that the text of the 1988 application, in light of Martek's expert's testimony, provided substantial evidentiary support for the jury's fi nding that the 1988 application adequately described the claimed food product comprising extracted lipids and food material. Accordingly, the Court held that substantial evidence supports the jury's finding that the '594 patent claims are entitled to the priority date of the 1988 application and that the district court did not err in denying Lonza's JMOL motion.

Regarding the infringement of the '281 patent claims, the district court construed the claims to require that "the culture medium causes less chemical wearing of the vessel in which the microorganisms are grown as compared to the level of chemical wearing away to a vessel caused by a culture medium comprising sodium chloride as the primary source of sodium." Slip op. at 12 (citation omitted). Lonza argued that Martek failed to prove infringement because it failed to conduct comparative testing to demonstrate that Lonza's culture medium caused "less chemical wear" than a culture medium containing sodium chloride as the primary source of sodium. The Court found that, based on Martek's experts' testimony, the jury could have reasonably concluded that Lonza's culture medium caused less chemical wear than a culture medium containing sodium chloride as the primary source of sodium.

Additionally, Lonza appealed the exclusion of evidence that allegedly showed prior inventorship of the claimed invention. Lonza offered the alleged prior inventor's abandoned patent application and evidence that the examples originally disclosed in the abandoned application were later reproduced, generating the results described in the application. The Court found that the abandoned application failed to establish that the alleged prior inventor reduced the invention to practice, even in view of additional evidence that the Court noted was merely "a post hoc replication of experiments cited in the abandoned application, which does not qualify as evidence from a time prior to or contemporaneous with the alleged prior invention." Id. at 19. Because the evidence failed to establish corroboration of the alleged prior inventor's testimony, the Court held that the district court did not abuse its discretion in excluding Lonza's evidence of prior inventorship.

Finally, Lonza argued that the district court misconstrued the '281 patent claim term "non-chloride sodium salt" by allowing that term to include sodium hydroxide. The Court affi rmed the district court's construction, fi nding that the intrinsic and extrinsic evidence supported the construction. Specifi cally, the prosecution history explicitly stated that sodium hydroxide is a non-chloride sodium salt, and that two treatises taught that sodium hydroxide can be considered a non-chloride sodium salt. The Court further noted that Lonza cited no evidence that sodium hydroxide cannot be considered a non-chloride sodium salt. Moreover, the Court held that Martek committed no clear and unmistakable disavowal of claim scope in light of the prosecution history as a whole.

Turning to Martek's appeal, Martek argued that the district court erred in granting JMOL that all asserted claims of the '567 patent were invalid for lack of enablement. The Federal Circuit held that the district court erred in granting JMOL with respect to the asserted dependent claims because it failed to consider the additional limitations of the dependent claims. Specifi cally, although the independent claim covered "perhaps 10,000" organisms and the '567 patent disclosed only one such example, the Court found that Lonza failed to present any evidence—much less clear and convincing evidence—that one of ordinary skill in the art must perform undue experimentation to practice the asserted dependent claims. But because the embodiments covered by dependent claims 4 and 5 comprised only twenty-two possibilities, the Court found that the evidence supported the jury's implicit finding that one need not perform undue experimentation to practice these claims. Thus, the Court reversed the district court's grant of JMOL as to claims 4 and 5 of the '567 patent.

Martek also appealed the construction of the term "animal" found in the asserted claims of the '244 patent. In view of the district court's construction, which excluded humans, Martek stipulated that Lonza did not infringe the '244 patent claims. On appeal, the Federal Circuit held that because Martek explicitly defined "animal" in the specifi cation to include humans, that definition controls. The Court also found that Martek had not clearly disavowed itself of humans, even though it had included only nonhuman animals in its preferred embodiments. And the Court found no disavowal in view of isolated statements in the prosecution—that the dissent alleged distinguished between humans and other animals—because the Court failed to fi nd evidence of a clear disclaimer of "humans" from "animal." Further, the Court noted that, because the patentee explicitly defined "animal," Lonza's extrinsic evidence was simply irrelevant.

Judge Lourie, with whom Judge Rader joined, dissented-in-part with respect to the majority's holding that the term "animal" in the claims of the '244 patent includes humans. The dissent acknowledged that the specification defines "animal" to include humans in a single sentence, but reasoned that "[t]his case illustrates the unusual situation in which a purported definition of a claim term in the written description is totally negated by the remainder of the text of the patent." Lourie Dissent at 2. The dissent noted that the specification and claims distinguished between animals and humans in several places. Because the Court is bound to read the claim term in a manner that is consistent with the specification as a whole, the dissent stated that it was clear that one of ordinary skill in the art would conclude that, despite the purported definition in the specification, the term "animal" cannot include humans.

Use Of The Term "Comprising" Does Not Render A Claim Anticipated By A Device That Contains Less Than What Is Claimed
Article by Casey L. Dwyer

Judges: Newman (author), Friedman, Mayer

[Appealed from Board]

In In re Skvorecz, No. 08-1221 (Fed. Cir. Sept. 3, 2009), the Federal Circuit reversed and remanded the Board's decision rejecting claims 1-5 and 7 in Robert J. Skvorecz's application to reissue U.S. Patent No. 5,996,948 ("the '948 patent") for anticipation based on U.S. Patent No. 5,503,062 ("the '062 patent"), indefiniteness, and failure to comply with the written description requirement.

The '948 patent is directed to a wire chafing stand used for supporting a chafer (i.e., a device for keeping food warm). Specifically, the '948 patent describes a chafing stand wherein the wire legs of the stand are indented so that nested chafi ng stands can be readily separated. Specifi cally, the specifi cation describes a stand whereby the legs have an indent (also called an "offset") located adjacent to the upper ends of the legs, serving to laterally displace each leg relative to the point of attachment of the leg to the upper rim of the stand.

In response to the applicant's request seeking reissuance of claims 1-7 of the '948 patent under 35 U.S.C. § 251, the reissue examiner rejected claims 1-5 and 7 as an improper recapture of surrendered subject matter and claims 1, 2, and 5 as anticipated based on the '062 patent. The Board reversed the rejection based on improper recapture of surrendered subject matter and the anticipation rejection as to claim 5, but sustained the examiner's anticipation rejection as to claims 1 and 2. The Board also entered two new grounds of rejection, rejecting claim 5 for indefiniteness, and claims 1-5 and 7 for failing to comply with the written description requirement.

On appeal, the Federal Circuit first considered the rejections for anticipation. The Board found that the examiner established a prima facie case of anticipation based on the structural similarity between the '948 patent and the '062 patent because the applicant failed to show the claimed invention was not inherently disclosed by the '062 patent. Skvorecz argued that the claims of his patent require that each wire leg has a laterally displacing offset, while the '062 patent discloses a wire leg that does not have an offset that laterally displaces the leg from the rim.

The PTO argued that, under their broadest interpretation, the claims could be construed to include wire legs without offsets. Specifically, the PTO argued that the use of the term "comprising" in claim 1 permits the Skvorecz structure to include legs without offsets, even though the claim stated that "said wire legs" and "each wire leg" had offsets. The Federal Circuit disagreed, finding that the term "comprising" "simply means that the device may contain elements in addition to those explicitly mentioned in the claim." Slip op. at 7-8. The Court noted that the PTO's protocol giving claims their broadest reasonable interpretation during examination "does not include giving claims a legally incorrect interpretation." Id. at 8. After warning that the PTO's protocol is "solely an examination expedient, not a rule of claim construction," the Court concluded that the "broadest reasonable interpretation" was incorrectly applied to interpret "comprising" to mean that not all the Skvorecz wire legs need to have offsets. Id. In so doing, the Court reminded that the signal "comprising" does not render a claim anticipated by a device that contains less than what is claimed. Accordingly, the Court held that the Board erred in holding that the '062 patent anticipated the '948 patent and reversed the Board's anticipation rejection.

The Federal Circuit next addressed the PTO's argument that dependent claim 5 was indefinite because (1) the phrase "at the separation" lacked antecedent basis in independent claim 1; and (2) the indefiniteness of "at the separation" rendered the term "segments" indefinite, especially because "segments" was not defined in the specification. The Court noted that "[s]ome latitude in the manner of expression and the aptness of terms should be permitted even though the claim language is not as precise as the examiner might desire." Id. at 10 (quoting M.P.E.P. § 2173.02). Thus, the Court found that the phrase "at the separation" did not require further antecedent basis and was not indefinite because a person of ordinary skill in the art would understand the claim in view of the specification. The Court instructed the applicant to adopt the Board's suggestion of changing "the separation" to "a separation," and held that, with this amendment, the claim was not indefinite.

Finally, the Court addressed the PTO's argument that claims 1-5 and 7 did not meet the written description requirement because the claim element "a plurality of offsets located . . . in said first rim" was not described in the specification. Although Figures 12 and 13 showed offsets in the rim, the PTO argued that these were partial figures and did not show every leg's offset and their displacement. The Court rejected the PTO's argument, finding that, in view of the other figures showing the full structure, a person of skill in the art would understand Figures 12 and 13 as partial structures showing the detail of the offsets. The Court therefore held that the Board erred in finding that the claims failed to meet the written description requirement.

Accordingly, the Federal Circuit reversed the Board's rejections based on anticipation, indefiniteness, and failure to meet the written description requirement and remanded the case for further proceedings.

Res Judicata Applies When Device Accused In Second Suit Remains Unchanged With Respect To Claim Limitations At Issue In First Suit
Article by Stephen L. Keefe

Judges: Michel, Rader (author), Prost

[Appealed from E.D. Va., Judge Davis]

In Nystrom v. Trex Co., No. 09-1026 (Fed. Cir. Sept. 8, 2009), the Federal Circuit affi rmed the district court's judgment of noninfringement of U.S. Patent No. 5,474,831 ("the '831 patent") on alternative grounds, holding that plaintiff Ron Nystrom was precluded on res judicata grounds from litigating his infringement claim against Trex Company, Inc. ("Trex"), Home Depot USA, Inc. ("Home Depot"), and Snavely Forest Products Inc. ("Snavely Forest") (collectively "Defendants").

The '831 patent is directed to an outdoor wood-fl ooring board shaped to shed water from its upper surface while still maintaining a comfortable surface upon which to walk. Trex manufactured a fi rst generation of boards ("Trex I boards") and a second generation of boards ("Trex II boards"). Home Depot and Snavely Forest each distribute Trex boards.

In 2001, Nystrom initiated a suit naming Trex as the sole defendant and alleging that the Trex I boards infringed the '831 patent. The district court entered judgment of noninfringement. On appeal, the Federal Circuit affirmed the district court's constructions of the terms "board" and "manufactured to have," but reversed on the construction of a third claim limitation. On remand, Nystrom attempted to pursue his infringement claim under the DOE, which the district court concluded Nystrom had waived. Nystrom again appealed, and the Federal Circuit affirmed the district court's holding that Nystrom had waived his infringement claim based on the DOE.

Nystrom then filed a second suit in the same district court naming the Defendants and alleging solely that the Trex II boards infringed the '831 patent under the DOE. Trex moved for SJ to bar Nystrom under the doctrine of res judicata from relitigating infringement because the Trex II boards were essentially the same as the Trex I boards. Trex also moved for summary adjudication to prohibit Nystrom from relying on the DOE because of (1) claim vitiation, (2) argument-based estoppel, and (3) amendment-based estoppel. The district court granted SJ on claim vitiation and argumentbased estoppel, but denied Trex's motion on res judicata and amendment-based estoppel.

On appeal, the Federal Circuit reminded that, for claim preclusion in a patent case, an accused infringer must show that the accused product or process in the second suit is essentially the same as the accused product or process in the first suit, and that "[c]olorable changes in an infringing device or changes unrelated to the limitations in the claim of the patent would not present a new cause of action." Slip op. at 6 (quoting Foster v. Hallco Mfg. Co., 947 F.2d 469, 480 (Fed. Cir. 1991)).

Defendants conceded material differences between the Trex I boards and the Trex II boards, but maintained that the only two limitations leading to the noninfringement judgment in the suit—"board" and "manufactured to have"—are in all material respects the same in the Trex I boards and the Trex II boards.

The Court observed that this case presents "a slightly new angle on claim preclusion," asking "whether the accused infringer may assert claim preclusion when the sole claim limitations at issue in the first suit remain unchanged in the second suit." Id. at 6-7. The Court noted that, although it had previously emphasized that the focus for claim preclusion should be on "material differences" between the two accused devices, it had not addressed directly whether the focus of the "material differences" test is on the claim limitations at issue in each particular case.

Turning to that question, the Court noted that it had already determined in the earlier case that the Trex I boards do not infringe the '831 patent, either literally or, as a result of Nystrom's waiver, by equivalents. The Court observed that for Nystrom to succeed on his infringement claim against the Trex II boards in the second suit, he would have to prove infringement of each claim limitation. The Court noted that the only claim limitations at issue in the first suit were "board" and "manufactured to have," that the constructions for these terms in the second suit were the same as the constructions in the first suit, and that the bases of noninfringement in the first suit were these constructions. The Court explained that "[i]f, therefore, the accused device of the second suit remains unchanged with respect to the corresponding claim limitations at issue in the first suit, then Nystrom has no remaining avenue to pursue his claims now." Id. at 7. The Court observed that Nystrom would be attempting to prove infringement of the same claim limitations as to the same features of the accused devices, which is the exact situation that res judicata seeks to prevent. The Court concluded that res judicata thus barred this second attempt to adjudicate the same issues.

The Court pointed out that its analysis assumed the Trex I and Trex II boards to be insubstantially different with respect to the pertinent claim elements. Although Nystrom argued differences in added wood grain and color between the Trex I and Trex II boards, the Court noted that Nystrom's alleged differences fell squarely within the "colorable changes" category. The Court added that simply adding a wood grain and changing the board's color did not materially alter the infringement analysis of the "wood cut from a log" construction of the limitation "board" or the "manufactured utilizing woodworking techniques" construction of the limitation "manufactured to have."

Judge Rader wrote separately to address the doctrine of claim vitiation, reminding that the "all elements" rule established in Warner-Jenkinson Co. v. Hilton Davis Chem. Co., 520 U.S. 17, 39 n.8 (1997), forecloses resort to the DOE when a limitation would be read completely out of the claim (i.e., would be vitiated). Judge Rader further noted that, nonetheless, the Federal Circuit has warned that an overly broad application of the "all elements" rule may improperly swallow the DOE entirely and limit infringement to "a repeated analysis of literal infringement." Rader Dissent at 2 (quoting Ethicon Endo-Surgery, Inc. v. U.S. Surgical Corp., 149 F.3d 1309, 1317 (Fed. Cir. 1998)). Because claim vitiation limits the DOE, which, by definition, acknowledges that a specifi c claim limitation is not expressly found in the accused product, in Judge Rader's view, the vitiation doctrine is subsumed within the test for equivalents itself and the "all elements" rule is "simply a circular application of the doctrine of equivalents." Id.

Judge Rader went on to explain that while the test for equivalents and vitiation are coterminous, juries decide the test for equivalents as a question of fact, but judges decide vitiation and apply the "all elements" rule as a question of law. Judge Rader noted that although the tests are the same, the testers are different, which could produce different results in application of the same rules.

Structural And Functional Analysis Of Disclosed And Prior Art Elements Are Required When Means-Plus-Function Limitations Are At Issue
Article by Jeremy P. Bond

Judges: Newman (concurring), Gajarsa (author), Dyk (concurring)

[Appealed from N.D. Cal., Judge Armstrong]

In Fresenius USA, Inc. v. Baxter International, Inc., Nos. 08-1306, -1331 (Fed. Cir. Sept. 10, 2009), the Federal Circuit affi rmed the district court's judgment that Fresenius USA, Inc. and Fresenius Medical Care Holdings, Inc. (collectively "Fresenius") failed to provide suffi cient evidence of prior art structure to prove that a means-plus-function claim limitation was known in the art, reversed the district court's grant of JMOL as to the remaining claims asserted by Baxter International, Inc. and Baxter Healthcare Corporation (collectively "Baxter"), vacated the permanent injunction and royalty award it had granted against Fresenius, and remanded.

Baxter owns U.S. Patent Nos. 5,247,434 ("the '434 patent"), 5,744,027 ("the '027 patent"), and 6,284,131 ("the '131 patent"). All three patents are derived from a parent application filed in 1991, and all three disclose and claim a hemodialysis machine integrated with a touch screen user interface.

Fresenius initially brought a DJ action against Baxter on the grounds of invalidity and noninfringement of the '434, '027, and '131 patents. Baxter counterclaimed, alleging infringement of all three patents. The district court granted partial SJ that Fresenius infringed claims of the '131 and '434 patents. Following trial, a jury found all the asserted claims invalid as either anticipated or obvious. The district court overturned the jury's verdict for lack of substantial evidence and granted Baxter's JMOL motion that its asserted claims were not invalid. The district court also found that Fresenius did not present substantial evidence of a motivation to combine the prior art elements to produce the claimed inventions in the '131 and '434 patents.

Following a jury trial on damages, the jury awarded fourteen million dollars to Baxter. The district court granted a permanent injunction against Fresenius and awarded royalties on sales of infringing machines and disposable products linked to the infringing machines. Fresenius appealed the grant of JMOL, entry of the permanent injunction, royalty award, and constructions of specified claim terms. Baxter cross-appealed the jury's determination that the asserted claims of the '027 patent are invalid as anticipated.

On appeal, the Federal Circuit determined that Baxter failed to properly raise the argument that substantial evidence did not support the jury's anticipation determination. The Court noted that Baxter's motions only briefl y mentioned the jury's anticipation verdict, and in each motion Baxter relegated its discussion of that verdict to a single footnote. As the Court explained, one specific challenge to an anticipation finding does not preserve all possible challenges to that finding. "If a party fails to raise an argument before the trial court, or presents only a skeletal or undeveloped argument to the trial court, we may deem that argument waived on appeal, and we do so here." Slip op. at 10.

With the exception of claims 26-31 of the '434 patent, the Federal Circuit reversed the JMOL with regard to the asserted claims on evidentiary grounds. With regard to the '027 patent, the district court determined that Fresenius had failed to prove by clear and convincing evidence that claim 11 was obvious because the only relevant expert witness testimony did not discuss the limitations of claim 7, from which claim 11 depended. The Court disagreed because another Fresenius witness had previously discussed those limitations when he testified that claim 7 was anticipated. When assessing the obviousness of claim 11, the jury could have reasonably concluded that the limitations of claim 7 were known in the prior art based on the combined testimony of Fresenius's experts. "In determining whether Fresenius presented substantial evidence to support the jury's verdict that claim 11 is obvious, we must consider all evidence that was before the jury and draw all reasonable inferences from that evidence in the light most favorable to Fresenius." Id. at 12.

With regard to the '131 patent, the district court noted that Fresenius's expert, who testified that claim 1 was obvious, did not specifically analyze element (a) of claim 1. Element (a) is written as a Markush group, listing a circulation unit among others. In reversing the district court's finding, the Court pointed out that three witnesses provided testimony that prior art hemodialysis machines contain circulation units. Based on the totality of the testimony presented by these three witnesses, the jury could have reasonably concluded that the limitations of element (a) were known in the prior art.

Claim 14 of the '131 patent depends from claim 1 and further requires that the touch screen "display a plurality of indicia, each corresponding to a different time-variable hemodialysis parameter." Although the district court noted that an operating manual for a prior art machine disclosed "an indicium

corresponding to a time-variable hemodialysis parameter," the district court concluded that Fresenius failed to present any evidence that a "plurality of indicia" was present in the prior art. The Court disagreed because Fresenius provided testimony, using an explanatory demonstrative, that the inventors of the prior art machine had provided for more than one time-variable parameter. The demonstrative indicated that the prior art machine allowed for multiple indicia, each corresponding to a different time-variable hemodialysis parameter. The Court reasoned that the jury could have reasonably credited the testimony and concluded that the relevant limitation was present in the prior art machine.

Baxter additionally asserted that Fresenius failed to demonstrate that a verification limitation of claim 16 existed in the prior art. The Court remained unpersuaded because Fresenius's expert testified that a prior art machine contained the verifi cation limitation, referring to a specific page of an operating manual for support.

Claims 26–31 of the '434 patent contain means-plus-function limitations that require a "means for delivering the dialysate to a dialysate compartment of a hemodialyzer." After stating that a structural analysis is required when means-plusfunction limitations are at issue and a functional analysis alone will not suffice, the Court found that Fresenius neither identified the structure in the specification that corresponds to the means for delivering dialysate nor compared it to the structures present in the prior art. The Court explained that, at most, the evidence of record supports a finding that some structures that could perform the claimed function existed in the prior art, and such a finding is insufficient.

The Court also noted an additional reason for affirming the district court's grant of JMOL regarding dependent claim 30. Claim 30 requires a "means for delivering an anticoagulant to a patient," which the jury was instructed requires a microprocessor and stepper motor. However, Fresenius cited no testimony discussing a "stepper motor." While Fresenius contends that an operating manual for a CMS 08 dialysis machine disclosed the necessary structure, Fresenius cited no pages that reference a "stepper motor." The Court independently reviewed the record, noting that the manual briefly mentions a "stepper motor" but does not discuss that structure in the context of the claimed function. "Moreover, even if the CMS 08 manual disclosed a stepper motor for delivering an anticoagulant, it was Fresenius's burden to clearly disclose, discuss, and identify for the jury the supporting evidence upon which it was relying to prove that the claim limitation was present in the prior art." Id. at 18.

The Court also reversed the district court's determination that Fresenius had failed to demonstrate the required motivation to combine prior art elements in support of the jury's obviousness determination. Although the district court issued its JMOL opinion before KSR International Co. v. Telefl ex Inc., 550 U.S. 398 (2007), was decided, the Court noted that it remains appropriate post-KSR "to determine whether there was an apparent reason to combine the known elements in the fashion claimed by the patent at issue." Slip op. at 20 (quoting KSR, 550 U.S. at 418). Thus, the jury's obviousness verdict remains relevant to the Court's review because implicit factual findings underlying the jury's verdict will not be overturned if they are supported by substantial evidence.

In support of its obviousness argument, Fresenius presented a prior art publication by Dr. Rau that disclosed a touch screen interface on an anesthesia-delivery system. The publication mentioned that advancing areas of medicine, such as hemodialysis, could benefi t from an improved user interface. Another Fresenius witness, Dr. Phares, also described the ease and prevalence of "integrating a touch screen into some kind of a computer-controlled machine," such as a hemodialysis machine. Id. at 21.

Under KSR, "if a technique has been used to improve one device, and a person of ordinary skill in the art would recognize that it would improve similar devices in the same way, using the technique is obvious unless its actual application is beyond his or her skill." Id. (quoting KSR, 550 U.S. at 417).

The Court reasoned that the jury had implicitly found that the prior art suggested combining a touch screen with a hemodialysis machine. That finding was supported by substantial evidence because a reasonable jury could have concluded that Dr. Rau's publication contained an explicit suggestion to combine the benefits of a touch screen interface with a hemodialysis machine. Based on Dr. Phares's testimony, the jury could also have reasonably concluded that an ordinarily skilled artisan would have known how to make that same combination.

Fresenius asserted several challenges to the district court's injunctive order. However, the Court found that Fresenius had cited no legal error and failed to demonstrate that the district court had made any clearly erroneous factual findings. While the Court concluded that the district court did not abuse its discretion in granting permanent injunctive relief, the injunction was vacated and remanded for the district court to reconsider in light of the partial JMOL reversal. Likewise, the Court vacated the royalty award and remanded for the district court to reconsider whether the previous award was proper in light of the modifi cation of the district court's judgment.

The Court also considered the parties' other arguments and found them unpersuasive. For example, Fresenius asserted that the district court erred in construing several claim terms. The Court declined to consider these arguments because Fresenius failed to clearly explain what result would occur if the Court adopted Fresenius's proposed claim constructions. Moreover, Fresenius unconditionally stipulated to infringement of the asserted claims. The Court reasoned that the infringement judgment cannot be altered by a modified claim construction because Fresenius's stipulation in no way stated or indicated that it was conditioned upon the district court's claim construction.

In a concurring opinion, Judge Dyk asked whether the district court could, in its discretion, stay further proceedings pending the outcome of a reexamination before the PTO. Judge Dyk noted that while Fresenius had not established the invalidity of claims 26-31 of the '434 patent, those claims on their face were of dubious validity in light of the Court's holding that the asserted claims of the '131 patent and the '027 patent are invalid. Judge Newman responded to Judge Dyk's concurrence in a separate concurring opinion because she was concerned about distorting the role of reexamination. While a strong supporter of the principle of reexamination, Judge Newman stated that staying the action at this late stage would entail several years of additional delay. Judge Newman pointed out that the PTO had yet to finally decide the reexamination, which remains subject to judicial review on the same issues of validity that have already been litigated.

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