Chicago IP Attorney & Lawyer : R. David Donoghue : Chicago IP Litigation Blog

Yesterday, the Federal Circuit handed down its anticipated en banc decision in Therasense, Inc. v. Becton, Dickinson & Co., increasing the standards for inequitable conduct.  The 6-5 majority held that: 

1. an omitted reference is material only if the claim or patent would not have issued, but for omission of the reference;
    
2. specific intent to deceive must be shown by clear and convincing evidence;
    
3. courts can no longer employ a "sliding scale" of intent and materiality, both must be showng by clear and convincing evidence; and
    
4. courts should apply equity to ensure that the remedy is not based upon conduct "immaterial to the issuance of the patent." 

Patent Docs has an excellent explanation of the opinion and the case background.  And there is plenty of commentary about the opinion (see links below).  My initial reaction was that the heightened standards will not actually reduce the number of inequitable conduct claims that are filed, although it may reduce the number of inequitable conduct findings. 

So, while the overall outcomes may change, the general cost and complexity of patent litigation will likely remain the same.  But when I said as much on Twitter (@rdd), I got an interesting reaction from what appears to be an anonymous patent lawyer.  This anonymous person suggested that the heightened standard would actually embolden inventors and patent prosecutors to omit references and hide information from the Patent Office because they are now less likely to be charged with inequitable conduct.  My inclination is to dismiss this theory based upon my operating presumption that most patent prosecutors, and most inventors, are, or at least intend to, zealously advocate for their clients, or themselves, within the Patent Office's rules and the relevant ethics standards.  Of course, I have seen exceptions, and they can be severe.  But my experience is that those are the exceptions, not the rule.  I am curious to hear what others think about this.  Am I wrong?

Here is a round up of some of the blog posts about the decision:

• Peter Zura's 271 Patent Blog "rejoices" that the heightened standards give prosecutors added protection;
   
• Life Sciences Law;
   
• Orange Book Blog;
   
• Patently-O ;
   
• PharmaPatents; and
   
• PLI Blog.

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Gene Quinn has done some great work in developing a list of the top 50 patent blogs at IPWatchdog, based on a combination of objective and subjective criteria -- click here to read the post.  With all of the usual caveats about the value of top blog lists and competitions, I am proud that the Chicago IP Litigation blog came in at number 28 and the top regional US patent blog.  I am honored to be among the top regional patent blogs, including Washington State Patent Blog, California Biotech Blog,* and Georgia Patent Law.  I am also proud to be among the numerous Chicago patent blogs that made the list, including Patent Docs, Orange Book Blog and the 271 Patent Blog.

Here is the top 50:

1. Patently-O
2. IPWatchdog.com
3. IP Kat
4. Spicy IP
5. Patent Baristas
6. Intellectual Property Watch
7. Patent Docs
8. 271 Patent Blog
9. BlawgIT
10. Patent Prospector
11. The Invent Blog
12. IP Think Tank and The Prior Art
13. -
    
14. Orange Book Blog
15. IPJUR and European Patent Caselaw
16. -
    
17. Promote the Progress
18. IP NewsFlash
19. Anticipate This!
20. Patentably Defined
21. India Patent
22. Intellectual Asset Management
23. Against Monopoly
24. Patent Circle
25. I/P Updates
26. PHOSITA
27. IP Spotlight
28. Chicago IP Litigation
29. The IP Factor
30. Patent Arcade and File Wrapper
31. -
    
32. Securing Innovation
33. Patents 101 and IP Estonia
34. -
    
35. PatLit
36. Just An Examiner
37. The Business of Patents
38. Patentability
39. Inventive Step
40. Holman’s Biotech IP
41. Washington State Patent Law
42. California Biotech Law
43. Patent Infringement Updates and Patent Assassins
44. -
    
45. Russian Patents
46. Georgia Patent Law
47. Patentnapsis
48. Honoring the Inventor
49. OC Patent Lawyer
50. Nanomedicine & IP

*  Another blog by LexBlog.

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IPWatchdog Gene Quinn recently published his list of the top 26 patent blogs, based upon Technorati rankings (Quinn only considered blogs in the top 1M of the Technorati rankings) -- click here to read Quinn's post.  Quinn manually determined which blogs counted as patent blogs, and did nice work.  Although I would add the IP ADR Blog to the list.  While I do not place much weight in blog rangings, the list identified a few new blogs that I plan to follow, and it is gratifying to see that the Chicago IP Litigation Blog has a strong reader base in the patent world.

Here are Quinn's rankings:

1. Patently-O - Technorati Rank 21,202
2. Patent Baristas - Technorati Rank 61,134
3. IPWatchdog - Technorati Rank 80,245
4. Against Monopoly - Technorati Rank 80,245
5. Patently Silly - Technorati Rank 90,082
6. Chicago IP Litigation Blog - Technorati Rank 117,073
7. PHOSITA - Technorati Rank 101,726
8. Spicy IP - Technorati Rank 129,347
9. PLI Patent Practice Center - Technorati Rank 132,753
10. Duncan Bucknell Company’s IP Think Tank - Technorati Rank 136,348
11. Patent Prospector - Technorati  Rank 152,448
12. Securing Innovation - Technorati Rank 162,007
13. Peter Zura’s 271 Patent Blog - Technorati Rank 163,794
14. The Invent Blog- Technorati Rank 167,214
15. Promote the Progress - Technorati Rank 198,166
16. I/P Updates- Technorati Rank 213,371
17. IP NewsFlash- Technorati Rank 221,777
18. Orange Book Blog - Technorati Rank 221,777
19. The IP Factor - Technorati Rank 250,588
20. Philip Brook’s Patent Infringement Updates- Technorati Rank 273,434
21. Patent Docs - Technorati Rank 300,413
22. Antiticpate This! - Technorati Rank 351,677
23. Patent Fools (now operated by IPWatchdog.com) - Technorati Rank 351,092
24. Patentably Defined - Technorati Rank 614,978
25. Steve van Dulke’s Patent Blog -  Technorati Rank 676,101
26. IP Spotlight - Technorati Rank 752,199

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Abbott Labs. v. Sandoz, Inc., No. 05 C 5373, 2007 WL 1549498 (N.D. Ill. May 24, 2007) (Coar, J.).

Judge Coar denied defendant Sandoz, Inc.'s ("Sandoz") motion to stay the Court's preliminary injunction pending appeal to the Federal Circuit pursuant to Fed. R. Civ. P. 62(c).  The Court previously granted plaintiff Abbott's motion for a preliminary injunction (you can read more about that decision and related cases in the Blog's archives).  The PI enjoined defendant Sandoz from selling a generic version of Abbott's patented extended release antibiotic (clarithromycin, an erythromycin derivative which Abbott markets as Biaxin XL).  Sandoz argued that the PI should be stayed pending appeal because of conflicting Federal Circuit law regarding the Court's claim construction and because of the Supreme Court's KSR decision. 

First, Sandoz argued that two different Federal Circuit panels had issued differing rulings construing the claims at issue.  Judge Coar rejected this argument because the construction relied upon in the PI ruling was the Federal Circuit's second, broader claim construction.  The Court explained that the "only rational assumption" was that the second panel was aware of the constructions in the first, but relied upon something different in the record or identified a fact missed by the first panel.  Further, the Court predicted that the Federal Circuit would not retreat from its second opinion to its first, prior opinion.

Second, the Court held that the KSR decision did not change its analysis of Sandoz's likelihood of success on its obviousness argument.  The Court provided a detailed explanation of KSR and its reasoning, but differentiated the current case because the Court held that one of the limitations in the Abbott claims did not exist in Sandoz's cited combination of prior art references.  Because the references did not disclose one of the elements of the claims, whether or not the Court used a strict application of the Federal Circuit's teaching, suggestion or motivation test did not change the outcome of its analysis.  Both the Federal Circuit's and the Supreme Court's standards required that all elements be disclosed by the combined prior art references.

Finally, the Court held that Sandoz had not provided sufficient evidence that it would be irreparably harmed.  Sandoz argued that if it could not enter the market at the same time as other generics, which are not subject to PI's, pharmacists would be reluctant to later restock their shelves with Sandoz's generic version of the drug.  But the Court reasoned that the lure of generics is their prices, not their brand recognition, so Sandoz should have no trouble re-entering the market at a later date should it prevail.

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KSR v. Teleflex, 550 U.S. __ (2007).

A unanimous Supreme Court rolled back the Federal Circuit's teaching, suggestion or motivation obviousness test in favor of the Court's prior, and substantially broader, test as set forth in Graham v. John Deere Co. of Kansas City, 383 U.S. 1 (1966).  Justice Kennedy delivered the Court's opinion and called the Supreme Court's approach to obviousness "broad and flexible."  The Court also noted that because the parties did not dispute the prior art, the claim's scope or the level of ordinary skill in the art and because obviousness is a legal question, the district court was correct to grant summary judgment in this case.

In addition to bringing the Fed. Cir. down to size, the Supreme Court also took a swipe at the PTO:

We need not reach the question whether the failure to disclose [the prior art reference] during the prosecution . . . voids the presumption of validity given to issued patents, for claim 4 is obvious despite the presumption. We nevertheless think it appropriate to note that the rationale underlying the presumption - that the PTO, in its expertise, has approved the claim - seems much diminished here.

The KSR decision opens up obviousness and will make obviousness a much larger issue in patent cases.  And whatever else the "new" old law may do, it will keep patent litigators very busy for years to come.  You can download a PDF of the Court's opinion from the Blog's archives.

Here is a list of links to other KSR commentary across the internet, as you can see you could read about KSR all week:

Patently-O

Prof. Sarnoff via Patently-O

WSJ Law Blog (with interesting comments from several key players and practicioners)

Patent Docs

Infinite Monkey Theorem

File Wrapper

271 Patent Blog

Tech Dirt

Patent Prospector

Fire of Genius and here

Orange Book Blog (for the decisions effect on pharma patents)

Michael Barclay of Wilson Sonsini via the SCOTUS Blog

Dan Bromberg of Quinn Emanuel via the SCOTUS Blog

Chicago Tribune

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Abbott Labs. v. Sandoz, Inc., No. 05 C 5373, 2006 WL 1141635 (N.D. Ill. Apr. 16, 2007) (Coar, J.).

Judge Coar granted plaintiff Abbott's motion for a preliminary injunction, after having previously denied it a TRO.*  The PI enjoined defendant Sandoz from selling a generic version of Abbott's patented extended release antibiotic (clarithromycin, an erythromycin derivative which Abbott markets as Biaxin XL).  The Court held that Sandoz had shown a substantial likelihood of materiality and Abbott's intent to deceive the PTO  based upon Abbott's failure to disclose certain taste perversion data during prosecution.  But because Abbott abandoned the claims to which the taste perversion data was relevant of its own accord, the Court did not find the patent preliminarily unenforceable.  The Court explained its reasoning as follows:

Redemption is one of the core principles of the American ethos.  Thus in addition to being contrary to the spirit of Scribbs, Kimberly-Clark and the Code of Federal Regulation, it seems wholly inequitable to hold a patent to be invalid for fraudulent conduct in the prosecution of a claim that was withdrawn before actual prosecution had even begun.

The Court then made detailed, initial claim construction rulings and, based upon them, found a substantial likelihood of infringement.  The Court also considered Sandoz's invalidity arguments, but held that Sandoz had not proved a likelihood of success regarding its invalidity arguments.  The Court also held that the balance of hardships tipped in Abbott's favor because allowing Sandoz's generic product to remain in the market would necessarily take market share from Abbott.

In addition to its preliminary injunction stopping future product sales, the Court also required that Sandoz recall all of its existing product, so long as an adequate bond was set.

*  You can read more about the Federal Circuit decision in which the Federal Circuit overturned the Court's grant of a PI in a related case in the Blog's archives.  You can also read another take on this case at the Orange Book Blog.

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Abbott Labs. v. Sandoz, Inc., No. 05 C 5373, 2006 WL 3718025 (N.D. Ill. Dec. 15, 2006) (Coar, J.).

Judge Coar denied plaintiff's, Abbott Laboratories ("Abbott"), motion for a temporary restraining order ("TRO") to prevent defendant, Sandoz, Inc. ("Sandoz"), from selling a generic version of Abbott's patented extended release antibiotic (clarithromycin, an erythromycin derivative which Abbott markets as Biaxin XL).  The Court had entered a TRO and, ultimately, a preliminary injunction preventing another party, Teva Pharmaceuticals ("Teva"), from selling a generic version of plaintiff's patented extended release antibiotic, but the Federal Circuit vacated the preliminary injunction.  The Federal Circuit held that Teva raised a substantial question as to the validity of the claims at issue, sufficient to call Abbott's likelihood of success on the merits into question. 

In the instant case, Sandoz argued that the Federal Circuit's prior ruling that there was a question regarding the validity of the claims-at-issue precluded any preliminary injunctive relief.  The Court held that rulings on preliminary relief have no preclusive effect because they are made on an incomplete record, "inherently tentative" and based upon only "an estimate of the likelihood of success."  Despite that ruling, however, the Court noted that "the practical effect of [the Federal Circuit's] holding still militates towards the denial of the TRO in the instant case."  The Court refused to reach a holding inconsistent with the Federal Circuit's without a "substantial showing" on a more complete record.  So, although the Court denied the TRO, it appears to have kept an open mind about a preliminary injunction based upon a more complete record.

*For another take on this case, check out the Orange Book Blog.

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