Gibbons Law Alert
Last week, Senate Judiciary Chairman Orrin Hatch (D. UT) introduced the Patent Litigation Integrity Act, S. 1612. The Senate bill follows the introduction of a bill proposed by House Judiciary Committee Chairman Bob Goodlatte (R. VA), H.R. 3309, entitled “Innovation Act,” which also proposes a number of significant changes to patent litigation procedures.
Last week, House Judiciary Committee Chairman Bob Goodlatte (R-VA) introduced H.R. 3309, entitled “Innovation Act,” a 51-page bill proposing a number of significant amendments to the Patent Act (Title 35 U.S.C.). We reported last month on an earlier proposed draft of this bill. As we noted last month, among the more noteworthy provisions of the bill is a proposed new 35 U.S.C. § 281A, which heightens the pleading requirements for patent cases. Specifically, the proposed new section mandates providing detailed information about the patents alleged to be infringed, identifying each accused product/process, and providing information with “detailed specificity” regarding how the product infringes. This provision also sets forth that, for any required information not disclosed, the plaintiff must establish why such undisclosed information was not readily accessible, and the efforts made by such party to access it.
We have previously reported on the Federal Circuit’s en banc decision in Therasense, Inc. v. Becton Dickinson & Co., 649 F.3d 1276 (Fed. Cir. 2011) issued on May 25, 2011. In that decision, the Federal Circuit heightened the standard required to show that a patent holder committed inequitable conduct during the prosecution of the patent at issue. Prior to Therasense, an accused infringer asserting inequitable conduct as a defense had to show that the withheld information or false statements were material and the patent applicant intended to deceive the USPTO. Materiality and intent were analyzed on a sliding scale, where intent could be inferred if the withheld information was considered highly material.
Recently, House Judiciary Committee Chairman Bob Goodlatte (R-VA) announced a 47-page draft of a bill that proposes various amendments to the Patent Act, Title 35 of the United States Code and the Leahy-Smith America Invents Act. Importantly for IP practitioners, the draft bill would heighten pleading requirements for patent cases under a new 35 U.S.C. § 281A, by requiring detailed information in a complaint, including all the patents alleged to be infringed, an identification of each accused product and information with “detailed specificity” regarding how the product infringes. The proposed revisions would eliminate the current “Form 18,” which is the baseline model for alleging patent infringement.
On September 27, the Federal Trade Commission (“FTC”), announced that it had unanimously voted to seek public comments on its proposed requests for information from selected Patent Assertion Entities (“PAEs”), typically referred to as “patent trolls.” The FTC’s proposed 6(b) order seeks information from approximately 25 yet-to-be-named PAEs in the wireless communications sector regarding among other things, their “patent acquisition, litigation, and licensing practices.”
Last week, the Federal Circuit, in Sunovion Pharm. v. Teva Pharm. USA, et al., addressed the appropriate infringement analysis in the context of Hatch-Waxman (aka “ANDA”) litigation. It held: Although no traditional patent infringement [occurs] until a patented product is made, used, or sold, under the Hatch-Waxman framework, the filing of an ANDA itself constitutes a technical infringement for jurisdictional purposes. But the ultimate infringement question is determined by traditional patent law principles and, if a product that an ANDA applicant is asking the FDA to approve for sale falls within the scope of an issued patent, a judgment of infringement must necessarily ensue.
We have reported frequently in the past on IP law developments relating to so-called Nonpracticing Entities, or NPEs, including the Leahy-Smith America Invents Act’s mandate that the Government Accounting Office (“GAO”) conduct a study on the consequences of patent litigation by NPEs. On August 22, the GAO issued its 54-page Report, “Intellectual Property: Assessing Factors That Affect Patent Infringement Litigation Could Help Improve Patent Quality” (hereafter, “Report”). In view of the GAO’s mandate, some of the Report’s findings are surprising.
Last month, the Federal Circuit addressed the question of “whether, under the reexamination statute, the cancellation of claims by the PTO is binding in pending district court infringement litigation.” Fresenius USA, Inc. v. Baxter Int’l, Inc., 2013 U.S. App. LEXIS 13484, at *13 (Fed. Cir. July 2, 2013). The Federal Circuit interpreted the reexamination statute to have a binding effect on concurrent litigation, and thus terminated a pending litigation where the same patent claims were cancelled during reexamination. Id. at *43. Accordingly here, the Federal Circuit held that the PTO’s invalidity decisions trump the prior district court ruling.
The District Courts for the Southern and Western Districts of Texas appear to have taken different positions with regard to estoppel in an inter partes review (“IPR”) context, in e-Watch v. FLIR Systems, Case No. 4-13-00638 (S.D. Texas) and e-Watch v. ACTi Corp., Case No. 5-12-cv-00695, (W.D. Texas), respectively. The apparent split arose when the courts were confronted with motions to stay their respective patent infringement lawsuits pending disposition of a petition for IPR brought by another defendant in a related patent lawsuit, e-Watch v. Mobotix Corp., Case No. 5-12-cv-00492, (W.D. Texas). Interestingly, the petition for IPR has not yet been decided by the Patent Trial and Appeal Board (PTAB) of the U.S. Patent & Trademark Office.
IP practitioners have witnessed the dearth of inequitable conduct findings in the wake of Therasense, Inc. v. Becton, Dickinson & Co., 649 F.3d 1276 (Fed. Cir. 2011). There, the Federal Circuit reiterated en banc that to establish unenforceability for inequitable conduct before the United States Patent and Trademark Office (“PTO”), a party must prove by clear and convincing evidence that (1) information material to patentability was withheld from the PTO, or material misinformation was provided to the PTO, and that such act was done (2) with the intent to deceive or mislead. A few months ago, we reported on a case that continued to signal the death knell of this formerly ubiquitous defense, and thus begging the present question: is inequitable conduct even alive anymore? Of course it is.