Obviousness Analysis – PROMETHEUS LABORATORIES, INC. v. ROXANE LABORATORIES, INC.

The ‘770 patent which is owned by Prometheus Laboratories Inc., claims a method of treatment for IBS-D utilizing alosetron. Prometheus also has the ‘800 patent which covers the use of ‘770 patent.

In 2009, Roxane filed an abbreviated new drug application (ANDA) with FDA seeking approval of a version of Lotronex, since the ‘770 patent expired. In 2010, reexamined ‘770 patent was relisted in the Orange Book and Roxane submitted a paragraph 4 certification to the FDA.

In 2011, Prometheus sued all the defendants alleging infringement of ‘770 patent. Prometheus alleged that Roxane’s label would encourage doctors to prescribe alosetron in a sense that infringes the claims.

The district court held that “the elements of the ’770 patent were present in the prior art, and the differences between the prior art and the claims of the ’770 patent are insubstantial . . . [as] some of the prior art is virtually identical to the claimed inventions”. In addition, the district court also held that “the claims were invalid for obviousness-type double patenting in light of the claims of the ’800 patent”. So, the district court did not agree with Prometheus, saying that there is no issue of infringement. Then, Prometheus appealed.

According to the Federal Circuit, obviousness is based on “underlying factual findings, including: (1) the level of ordinary skill in the art; (2) the scope and content of the prior art; (3) the differences between the claims and the prior art; and (4) secondary considerations of nonobviousness, such as commercial success, long-felt but unmet needs, failure of others, and unexpected results”. And, also states that a patent would have been obvious if the differnces between the calimed invention and prior art are such certain that a person having ordinary skill in the art will distinguish them. The Federal Circuit held that “even treating the limitations of the ’770 claims as exclusions, we conclude that before October 7, 1997, it would have been obvious to a person of ordinary skill to treat those sub-species claimed here”. Prometheus objected.

The Federal Circuit noted that “if the later expiring patent is merely an obvious variation of an invention disclosed and claimed in the reference patent, the later expiring patent is invalid”. The court also stated that in this case, it would have been obvious to a person who has ordinary skill in art to read the ‘800 patent and treat patients with IBS-D. Therefore, the Federal Circuit affirmed the district court’s decision noting that “the challenged claims of the ’770 patent would have been obvious over the ’800 patent and other prior art”.

Subject-Matter Analysis – ARIOSA DIAGNOSTICS, INC., et al. v. SEQUENOM, INC., et al.

In 1996, Drs. Dennis Lo and James Wainscoat discovered cell-free fetal DNA (“cffDNA”) which is a kind of DNA that circulates freely in the blood stream of pregnant women. In 2001, Drs. Lo and Wainscoat obtained the ’540 patent, which relates to this discovery. The invention, commercialized by Sequenom as its MaterniT21 test, created an alternative for prenatal diagnosis of fetal DNA. However, the patent does not claim cffDNA. Instead, the ’540 patent claims certain methods of using cffDNA.

Natera, Inc. manufactures and sells the Non-Invasive Paternity Test, which is intended to confirm the paternity or non-paternity of a gestating fetus from genetic information in fetal DNA available in the blood of the pregnant female. Diagnostics Center, Inc. is a licensee of Natera.

Each of these firms filed separate declaratory judgment actions alleging that they did not infringe upon the ’540 patent.

The district court found that “there was a substantial question over whether the subject matter of the asserted claims was directed to eligible subject matter.” Sequenom appealed and the Federal Circuit remanded and held that the district court erred in certain respects.

Parties then filed for motions for summary judgment regarding invalidility under section 101. The district court held that “the claims of the ’540 patent were directed to the natural phenomenon of paternally inherited cffDNA, and that the claims did not add enough to the natural phenomenon to make the claims patent eligible under § 101.” Sequenom appealed.

Federal Circuit followed these steps in order to determine whether claims of ‘540 patent is patent-ineliginle concept:

1) if subject matter is patent eligible, and

2) whether the claim contains an inventive concept sufficient to “transform” the claimed naturally occurring phenomenon into a patent eligible application.

In the first step, the court stated that the claims of the ’540 patent are method claims and methods are patent eligible subject matter. In the second step, the court held that “the practice of the method claims does not result in an inventive concept that transforms the natural phenomenon of cffDNA into a patentable invention.”

Because the method steps were well-understood, and easy to follow, the court specified that “the method of detecting paternally inherited cffDNA is not new and useful, the only subject matter new and useful as of the date of the application was the discovery of the presence of cffDNA in maternal plasma or serum.” The court also concluded that appending well-understood, routine steps to a “natural phenomenon” which is specified generally is not enough to be an “inventive concept”.

In addition, Federal Circuit indicated that “while preemption may signal patent ineligible subject matter, the absence of complete preemption does not demonstrate patent eligibility. In this case, Sequenom’s attempt to limit the breadth of the claims by showing alternative uses of cffDNA outside of the scope of the claims does not change the conclusion that the claims are directed to patent ineligible subject matter.”

Federal Circuit, then remarked that “detecting cffDNA in maternal plasma or serum that before was discarded as waste material is a positive and valuable contribution to science. But even such valuable contributions can fall short of statutory patentable subject matter, as it does here.”

For the above reasons, the court affirmed the district court’s decision, stating that the patent is invalid under Section 101.

Indefiniteness Analysis – BIOSIG INSTRUMENTS, INC. v. NAUTILUS, INC.

Biosig Instruments was granted a patent for a heart rate monitor that reduces noise during the detection of heart rate. Upon being sued for patent infringement, Nautilius filed a motion for summary judgment to have the patent invalidated for indefiniteness.

The district court found that the claimed invention “is not a description of any invention but a desired outcome, therefore, violates the requirement of specificity in Section 112”. The district court also found that, “a person of ordinary skill in the art at the time of the invention, after reading this patent would not have known how to design the claimed invention”. Biosig appealed the district court’s decision granting Nautilus’s motion.

On appeal, the Federal Circuit reversed and noted that when “a claim limitation is defined in functional terms, determining whether the limitation is sufficiently definite depends on the disclosure in the specification and the knowledge of a person of ordinary skill in the art.” The Federal Circuit also cited the precedent that “a claim is indefinite only when it is ‘not amenable to construction’ or ‘insolubly ambiguous.’”

The Federal Circuit held that under the rule of U.S.C.§ 112, a patent is invalid for indefiniteness when those of ordinary skill in the art, having read the patent specifications and see into the prosecution history, would not be able to identify the scope of protection.

Using this standard, Federal Circuit determined that the patent survived indefiniteness review. Supreme Court granted certiorari, rejecting this standard and vacated and remanded the case.

Nexus Analysis – SOUTH ALABAMA MEDICAL SCIENCE V GNOSIS S.P.A.

Certain claims of Appellant’s (“SAMSF”) three patents were reviewed by the Board at the request of Appellee (“Gnosis”). The Board found all contested claims to be obvious due to two prior art references; a European patent application and a US patent. Due to similarity in purpose and disclosure of references, a person having ordinary skill in the art would be “motivated to combine them to arrive at the claimed use.” The Board concluded that SAMSF was unable to “demonstrate an adequate nexus between that evidence and the novel features of the contested claims.” SAMSF appealed.

The first discussion the Federal Circuit made was regarding obviousness. The Federal Circuit stated that underlying findings of fact for obviousness “include the motivation to combine multiple prior art references and any objective indicia of non-obviousness.”

The Federal Circuit concluded that substantial evidence supported the Board’s finding that the commercial success of products listed by the appellant “was inadequately linked to the claimed methods and composition” and agreed with the Board’s finding that appellant was unable to provide an “adequate basis to support the conclusion that other embodiments falling within the claim will behave in the same manner.” Thus, it was found that the novel features of the invention were not adequately tied to the evidence. In the light of these findings, the relevant claims of the patent were invalidated.

Infringement Analysis – AKAMAI TECHNOLOGIES, INC., THE MASSACHUSETTS INSTITUTE OF TECHNOLOGY v. LIMELIGHT NETWORKS, INC.

In 2006, Akamai Technologies, Inc. filed a patent infringement action against Limelight alleging infringement of several patents, including the ’703 patent, which claims methods for delivering content over the Internet. The jury found that Limelight infringed certain claims of the subject-matter patent. United States Court of Appeals for the Federal Circuit reversed and reinstated the jury verdict.

The issue at hand in this case is whether or not there is the ability for the concept of divided infringment  can still hold a single entity liable for the infringement.

The Federal Circuit explains  that direct infringement “occurs where all steps of a claimed method are performed by or attributable to a single entity”. However when more than one actor is involved in practicing the steps, a question of divided infringement arises.

When looking at divided infringement, the Court must looking to see if the acts of one actor is attributable to one single entity. In order to determine whether an entity is responsbile for others’ performance of methods, the court looks at two factors: “(1) where the entity directs or controls others’ performance, and (2) where the actors form a joint enterprise.

The Court further elaborated that, liability of an entity for others’ performance occurs under two circumstances: “(1) where that entity directs or controls others’ performance, and (2) where the actors form a joint enterprise”

Previously, courts have held actors liable under §271 (a) if it acts through an agent or contract with others to peform steps of a claimed method. However, the Federal Circuit now is stating that under § 271(a),  liability “can also be found when an alleged infringer conditions participation in an activity or receipt of a benefit upon performance of a step or steps of a patented method and establishes the manner or timing of that performance.” In the event this occurs, the third party’s actions are attributed to the alleged infringer and becomes the single actor of direct infringement. This determination of control of acts of other parties is a question of fact.

In terms of a joint enterprise, all actors can be charged with the acts of the other as if they are a single actor. In determining if a joint enterprise exists, the Court looks to see if there is: “(1) an agreement, express or implied, among the members of the group; (2) a common purpose to be carried out by the group; (3) a community of pecuniary interest in that purpose, among the members; and (4) an equal right to a voice in the direction of the enterprise, which gives an equal right of control.”

The court states that Section 271(a) is not limited solely to principal-agent relationships, contractual arrangements, and joint enterprise, as the vacated panel decision held. Rather, to determine direct infringement, whether all method steps can be attributed to a single entity should be considered.

In this case, it was agreed by the parties that  Limelight’s customers performed the “tagging” and “serving” steps in the claimed methods. However, there was substantial evidence that Limelight controlled it’s customers performance in every  other remaining method step, making all steps attributable to Limelight..customer use of its content delivery network upon its customers’ performance of the tagging and serving steps, and that Limelight establishes the manner or timing of its customers’ performance.

Abstract Idea Analysis – OIP TECHNOLOGIES, INC. v. AMAZON.COM, INC.

OIP Technologies alleges that Amazon.com infringes on their patent that relates to a method of a price optimization in an e-commerce environment. Infringement is directed to claims regarding computer-implemented methods for “pricing a product for a sale”. OIP Technologies subsequently filed a lawsuit for patent infringement.

Amazon filed a motion to dismiss the complaint by OIP Technologies. District Court granted Amazon’s motion, finding that “the asserted claims merely use a general-purpose computer to implement the absract idea of ‘price optimization’ and is therefore ineligible”. District Court stated that “without the “insignificant computer-based limitaitons,” the claims merely “describe what any business owner or economist does in calculating a demand curve for given product.”

Under Section 101, a patent may be obtained for “any new and useful process, machine, manufacture, or composition of matter, or any new and useful improvement thereof”; however, laws of nature, natural phenomena, and abstract ideas are not patentable.

As per Supreme Court’s two-part test in Alice, the court must first determine whether the claims at issue are directed to a patent- ineligible concept”, such as an abstract idea. If so, the court must then consider the elements of each claim both individually and as an ordered combination to determine whether the additional elements transform the nature of the claim into a patent-eligible applicaiton.

Court remarks, “the claims are directed to the concept of offer-based price optimization”. This concept is similar to other “fundamental economic concepts found to be abstract ideas by the Supreme Court and this court. Claims merely recite “well understood, routine conventional activities”, either by requiring conventional computer activities or routine data-gathering steps. Moreover, the claims are exceptionally broad and the computer implementation limitations do little to limit their scope. The claims describe the automation of the fundamental economic concept of offer-based price optimization through the use of generic-computer functions. Both the prosecution history and the specification emphasize that the key distinguishing feature of the claims is the ability to automate or otherwise make more efficient traditional price-optimization methods.

Federal Circuit specify, nor does the claims’ recitation of “present[ing] [offers]to potential customers” and “gathering . . . statistics generated during said testing about how the potential customers responded to the offers” provide a meaningful limitation on the abstract idea. The processes claimed in the patent are well understood, routine and conventional data-gathering activities and therefore they render the claims patent ineligible.

The Federal Circuit concluded that the patent claims the abstract idea of offer-based price optimization and lacks an “inventive concept” sufficient to “transform” the claimed subject matter into a patent eligible application of that idea.

Obviousness – TRIVASCULAR, INC. v. SAMUELS

In 2013, Dr. Samuels filed a patent infringement action against TriVascular alleging infringement of patent ‘575, which claims inventions in the field of intraluminal stent technology. TriVasucular filed a petition for inter partes review (“IPR”) for obviousness pursuant to 35 U.S.C. § 103

In conjunction with the argument that appellee’s patent was obvious, TriVascular argues that the Board erred in the claim construction requiring the term “circumferential ridges” to mean a “raised strip disposed circumferentially about the outer surface of the inflatable cuff”. The court looks to the broadest reasonable interpretation here, which states the words of the claim must be given their plain meaning, unless such meaning is inconsistent with the specification and prosecution history. This rule however, does not give the Board the license to disregard the full claim language and written description when looking at words in a claim. Such disregard would lead to an unreasonable interpretation.

An interpretation is found to be reasonable when “the use of the words in the context of the written description and customarily by those of skill in the relevant art that accurately reflects both the ‘ordinary’ and ‘customary’ meaning of the terms in the claims”. Here, the Board used the definition of ‘ridge’ from a general purpose dictionary which considered in the context of the written description and plain language of the claims, was found to be proper by the court.

TriVascular then argued Appellee’s Patent to be invalid for obviousness. A patent may be found invalid as obvious if “there are a finite number of identified, predictable solutions, and a person of ordinary skill has good reason to pursue the known options within his or her technical grasp”. Because obviousness is a question of law based on underlying facts, the court takes a look at the patents in question side by side.

The Court found that while both patents were directed at stent technology, appellee’s patent teaches the use of inflatable, circumferential ridges that do not penetrate the vessel wall, unlike the prior art, which has the ridges designed to penetrate the vessel wall. ‘

TriVascular argues it would have been obvious to substitute these two versions of ridges, but the Court finds this unpersuasive and finds that this difference in these versions of ridges in appellee’s patent would destroy the basic objective of the barbs in the prior art.  Therefore, the Court affirmed the Board’s findings regarding the lack of a sufficient motivation to combine and the lack of a reasonable expectation of success in combining the prior art. The court found no error in the Boards claim construction or its judgment that TriVascular failed to meet its burden of demonstrating that the asserted claims are invalid as obvious.  Affirmed.

Section 101 Analysis – IN RE: RAY SMITH, AMANDA TEARS SMITH

Applicants filed a patent application titled “Blackjack Variation” which outlined a method of conducting a wagering game accompanied by the rules of the game. This application was originally rejected the application based on 35 U.S.C § 101, concluding the application because “an attempt to claim a new set of rules for playing a card game” which qualified as an abstract idea.

The United States Court of Appeals for the Federal Circuit examined the claim by applying the two-part test introduced in Mayo. Mayo Collaborative Servs. V. Prometheus Labs., Inc., 132 S. Ct. 289. This two-part test requires the court to determine whether the claims are directed to a patent-ineligible concept such as an abstract idea, and whether the claims contain an ‘inventive concept’ sufficient to ‘transform’ the claimed abstract idea into a patent-eligible application.

The Court finds the claims are directed to rules for conducting a wagers game and compare this to “other fundamental economic practices” and a method of hedging risk, both of which were found to be abstract ideas by the Supreme Court.

Even when a claim is found to be abstract, the court is required to look at the second step to see if there is an inventive concept to transform this abstract idea. The court found that appending purely conventional steps to an abstract idea does not supply a sufficiently inventive concept. The claims here require shuffling and dealing of standard playing cards, which are purely conventional activities.

Had a new deck of cards been required in the claims, there would have been a greater chance of it transforming the abstract idea. The Court affirms the lower court’s holdings and finds the idea to be an abstract idea without an inventive concept to transform the claim to a patent eligible application.