This document summarizes several recent Federal Circuit cases involving issues of patent validity and infringement. The first case summary discusses the Federal Circuit affirming a district court decision upholding patent claims covering the drug Abilify as non-obvious and not invalid for double patenting. The second case discusses the Federal Circuit vacating and remanding a rejection of reissue claims for failure to properly apply the recapture rule. The third case discusses the Federal Circuit affirming a rejection of claims as inherently anticipated by a prior art clinical trial protocol.

1. Federal Circuit Review
VOLUME 2 | ISSUE 6 JUNE 2012
In Otsuka Pharmaceutical Co. v. Sandoz, Inc., (Appeal No.
In This Issue 2011-1126) the Federal Circuit affirmed the district court’s
decision sustaining the validity of the asserted patent claims
• Otsuka Pharmaceutical Co. v. Sandoz, Inc.
under 35 U.S.C. § 103 and the doctrine of non-statutory
(obviousness-type) double patenting.
• In re Youman
Otsuka is the assignee of a patent covering the drug
Abilify®, an antipsychotic drug with the active ingredient
• In re Montgomery
aripiprazole. Several defendants submitted Abbreviated
• Leader Technologies, Inc. v. Facebook, Inc.
New Drug Applications for generic aripiprazole, and
Otsuka initiated suit. Following a bench trial, the district
• Apple, Inc. v. Samsung Electronics Co., Ltd.
court sustained the validity of the asserted claims as non-
obvious and not invalid for non-statutory double patenting.
• In re Baxter International, Inc.
The defendants appealed.
The Federal Circuit affirmed, characterizing the defendants’
• Mintz v. Dietz & Watson, Inc.
case as “a poster child for impermissible hindsight
reasoning.” The Federal Circuit affirmed its previously
articulated test for determining whether a new chemical
compound is obvious over a particular prior art compound
Who We Are or compounds. The inquiry has two steps: (1) examining
Over 95% of our litigators hold technical degrees, including the rationale for selecting the lead compound; and, (2)
electrical engineering, computer science, mechanical analyzing the proffered reasons to modify the compound
engineering, chemistry, chemical engineering, biochemistry, or compounds with a reasonable expectation of success.
biology, and physics. Many of our litigators are former Federal
Circuit or district court clerks. With eight offices, Knobbe Martens
The Federal Circuit held that the lower court correctly
represents clients in all areas of intellectual property law. determined that in developing a new antipsychotic
compound, known antipsychotic compounds would have
• Exclusive practice in the area of intellectual property since been selected as lead compounds, not the compounds
1962
identified by the defendants. The court found the
• M
ore than 275 lawyers and scientists, many of whom have defendants’ selection of lead compounds was not guided
advanced degrees in various technologies by evidence of the compounds’ pertinent antipsychotic
• Internationally recognized leaders in IP across a vast spectrum
properties, but rather was the product of impermissible
of technology areas hindsight reasoning. The Federal Circuit specifically
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2. rejected the defendants’ reliance on the inventor’s development path, holding “[t]he inventor’s own path itself never leads to a
conclusion of obviousness; that is hindsight.”
Regarding the assertion of invalidity for obviousness-type double patenting, the Federal Circuit held that the analysis differs
from an analysis of obviousness under § 103. Specifically, the court stated that the rationale for selection of a lead compound
is not a factor because an assertion of obviousness-type double patenting involves comparison of the asserted compound
to an earlier patented compound. But like a § 103 analysis, the analysis of obviousness-type double patenting does entail
determining whether one of ordinary skill would have had a reason or motivation to modify the earlier patented compound
to make the asserted compound, and if there is a reasonable expectation of success of doing so. In the instant case, the court
agreed that the prior art did not provide a skilled artisan with a reason to make the necessary structural changes to the earlier
patented compound, particularly in view of the unpredictability in designing antipsychotic compounds. Therefore, the claims
were not invalid under obviousness-type double patenting.
In In re Youman, (Appeal No. 2011-1136) the Federal Circuit vacated and remanded a decision by the Board of Patent Appeals
and Interferences (“the Board”) affirming the rejection of reissue claims for failure to properly apply the recapture rule.
The patent applicants filed a broadening reissue application within the two-year statutory period, broadening the term
“cycling,” which was added during prosecution of the original patent application to overcome prior art. During the reissue
examination, the Patent Examiner rejected the broadened claims as improperly recapturing subject matter surrendered during
prosecution of the original patent application when the “cycling” limitation was added. The Board affirmed the Examiner’s
rejections based on an application of the three-step recapture rule analysis outlined in Federal Circuit precedent (for example,
In re Mostafazadeh, 643 F.3d 1353 (Fed. Cir. 2011)).
The first step of the analysis requires determining whether and how the reissue claims are broader than the patented claims.
The second step requires determining whether the broader aspects of the reissue claims relate to surrendered subject matter.
The third step requires determining whether the surrendered subject matter has crept into the reissue claim. Applying this
test, the Board held that the broadening constituted impermissible recapture, relying in part on the statement from the Office’s
guidelines for patent examination that “[i]f the surrendered subject matter . . . has been in any way broadened in a reissue
application claim, then a recapture rejection . . . is proper.” (M.P.E.P. § 1412.02(I)(C)).
On appeal, the Federal Circuit cautioned that reliance on this statement in the M.P.E.P. is “inappropriate,” and that broadening a
limitation added during prosecution “does not instantly implicate the recapture rule bar.” Instead, the broadening modification
must be evaluated to determine if it materially narrows the claim as originally filed in such a way that the surrendered subject
matter is not entirely or substantially recaptured – if the surrendered subject matter is not entirely or substantially recaptured,
then the recapture rule may not apply. The Federal Circuit clarified that this material narrowing analysis should be determined
by comparison of the reissue claims to the claim as originally filed, and not by comparison to the claims that issued. This
permits the applicant to broaden the reissue claims to an intermediate breadth between the original claims and the claims
that issued. In contrast, using the claims that issued as the frame of reference would frustrate the “remedial nature of the
reissue statute” by barring patentees from broadening their claims within two years to “when such claims were overly narrowed
during prosecution as a result of attorney error.” The Federal Circuit vacated the Board’s decision and remanded for a proper
application of the third step of the analysis.
Judge Lourie dissented from the majority’s holding that the material narrowing analysis should be determined relative to the
claim as originally filed: “It is broadening over the issued claim, not the originally filed claim, that should count.”
In In re Montgomery, (Appeal No. 2011-1376) the Federal Circuit affirmed a decision by the Board of Patent Appeals and
Interferences (“the Board”) rejecting claims as inherently anticipated.
The claims at issue were directed to administering inhibitors of the renin-angiotensin system (RAS) for treating or preventing
strokes. Specifically, the claims recited: “A method for the treatment or prevention of stroke or its recurrence” comprising
“administering, to a patient diagnosed as in need of such treatment or prevention,” a RAS inhibitor. The examiner rejected these
claims based on several prior art references, and the Board of Patent Appeals and Interferences affirmed, concluding that the
prior art inherently anticipated the claims.
Reviewing the Board’s legal conclusions de novo, the Federal Circuit first construed the claims, holding that the claims required
administering the RAS inhibitor to a patient diagnosed as in need of stroke treatment or prevention. The Federal Circuit declined
to decide if the preamble – “A method for the treatment or prevention of stroke or its recurrence” – led to an efficacy requirement
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3. as well. Although the court was skeptical that the claims required efficacy, it did not need to resolve the issue because “efficacy
is inherent in carrying out the claim steps.” The Federal Circuit held that the claims were anticipated by a prior art reference
that prospectively described a large clinical trial to test the administration of a RAS inhibitor for the prevention of stroke. The
clinical trial was initiated prior to the critical date of the patent, and therefore constituted prior art. However, because the results
were not published until after the priority date, the reference did not disclose the efficacy of administering the RAS inhibitor.
The Federal Circuit held that, because the reference described a protocol for administering a RAS inhibitor to stroke-prone
patients, and such administration “inevitably treats or prevents stroke,” the reference “inherently anticipates the claims at issue.”
The Federal Circuit dismissed the applicants’ arguments that the reference could not anticipate the claims because it did not
disclose the results. Because anticipation requires only an enabling disclosure, which a detailed clinical protocol certainly
provides, a detailed protocol anticipates, even if it has not been completed or even started. Accordingly, the claim rejections
were affirmed.
Judge Lourie dissented, arguing that where the outcome of a clinical trial is unpredictable it is not known if the clinical trial
will be successful until it is actually carried out, and therefore a description of the clinical trial does not inherently anticipate.
“[M]ere description of a process that, if it had been carried out, might yield a particular undisclosed result is not an inherent
anticipation of that result.” (emphasis added).
In Leader Technologies, Inc. v. Facebook, Inc., (Appeal No. 2011-1366) the Federal Circuit affirmed the district court’s decision
denying Leader’s motion for Judgment as a Matter of Law (JMOL), or a new trial on invalidity.
Leader is a software company that owns a patent directed to a system that manages data that may be accessed and created by
multiple users over a network. Leader asserted the patent against Facebook, alleging infringement of several claims. Following
a jury trial in which the asserted claims were found invalid under 35 U.S.C. § 102(b) based on offers for sale and public use, the
district court denied Leader’s motion for JMOL or a new trial on the invalidity issues. Leader appealed.
On appeal, Leader argued that Facebook failed to offer clear and convincing evidence that the version of its product offered for
sale or used prior to the critical date fell within the scope of the asserted claims. According to Leader, Facebook did not offer
source code, expert testimony, schematics, or any other evidence to prove the patented invention was incorporated into the
pre-critical date products. Rather, Facebook presented inconsistent testimony offered by Leader’s witnesses before and during
trial regarding whether the pre-critical date product was within the scope of the asserted claims. Leader argued that, even if the
jury found its testimony that the invention was not on sale or in use incredible, incredible testimony is not affirmative evidence
of its opposite, namely, that the invention was on sale or in use prior to the critical date.
On appeal, the Federal Circuit generally agreed with Leader that a witness’s discredited testimony is not a sufficient basis for
drawing a contrary conclusion. However, in this case the record contained substantial evidence that Leader’s pre-critical date
product fell within the scope of the claims, including: Leader’s interrogatory responses suggesting that the Leader product fell
within the scope of the asserted claims; Leader’s offer for sale and demonstration of this same product prior to the critical date;
an inventor’s deposition testimony in which he could not point to a single version of the product not falling within the scope
of the claims; and an offer letter stating that the software was “fully developed” and ”operational” and describing the product
in a way that matched the disclosure of the patent. The Federal Circuit further stated that, at a minimum, Leader’s witness’
incredible testimony fortified the conclusion that the pre-critical date product fell within the scope of the claims, and provided
an independent basis for disbelieving the witness’ assertions to the contrary. Therefore, the Federal Circuit affirmed.
In Apple, Inc. v. Samsung Electronics Co., Ltd., (Appeal No. 2012-1105) the Federal Circuit affirmed the district court’s denial
of preliminary injunctive relief with respect to three patents, and vacated and remanded the court’s denial of a preliminary
injunction with respect to a fourth patent.
Apple owns several U.S. patents relating to smartphones and tablets, including D593,087 (D’087) and D618,677 (D’677), which
claim a minimalist design for a rectangular smartphone, D504,889 (D’889), directed to a design for a tablet computer, and
7,469,381 (’381), which claims a software feature known as the “bounce-back” feature that is activated when a user scrolls
through the end of a document on the smartphone or tablet. Apple moved for a preliminary injunction to block the importation
of accused Samsung devices. The district court denied Apple’s request with respect to all four patents, and Apple appealed.
On appeal, the Federal Circuit affirmed the district court’s decision with respect to D’677 and ’381, agreeing that, while Apple
was likely to prevail on the merits of its infringement allegations, Apple failed to show a causal nexus between Samsung’s
alleged infringement and Apple’s asserted irreparable harm, a factor in determining if injunctive relief is warranted. The
Federal Circuit held that sales lost to an infringing product cannot irreparably harm a patentee if consumers buy the product for
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4. reasons other than the patented features. In addition, Apple’s delay in seeking an injunction against Samsung weighed against
finding irreparable harm. The Federal Circuit also affirmed the decision regarding D’087, despite disagreeing with the district
court’s conclusion that the D’087 patent was likely invalid, because the irreparable harm analysis for D’677 applied to this patent
as well. Regarding D’889, the Federal Circuit found that, contrary to the district court’s finding, a combination of references did
not likely render D’889 invalid for obviousness. The district court erred by viewing the various designs at too high a level of
abstraction — the “general concept” of a tablet computer — rather than focusing on the distinctive “visual appearances” of the
references and the claimed design. The Federal Circuit remanded the case for the district court to make findings regarding the
balance of hardships and the public interest regarding this patent.
Dissenting-in-part, Judge O’Malley argued that remanding the case would result in unjustifiable delay, and stated that a
preliminary injunction with respect to D’889 was warranted.
In In re Baxter International, Inc., (Appeal No. 2011-1073) the Federal Circuit affirmed a decision by the Board of Patent
Appeals and Interferences (“the Board”) rejecting claims as obvious.
A competitor challenged the validity of certain claims of one of Baxter’s patents in district court. In parallel, the U.S. Patent
and Trademark Office (PTO) granted the competitor’s reexamination request of the same patent. While the reexamination
proceeding was ongoing, the Federal Circuit affirmed the district court’s holding of no invalidity of the claims. Subsequent to
that decision, the Board affirmed the Examiner’s rejections of the same claims as obvious. Baxter appealed the Board’s decision
to the Federal Circuit.
The Federal Circuit affirmed, finding that substantial evidence supported the obviousness rejections. The majority stated, “[w]
hen a party who has lost in a court proceeding challenging a patent, from which no additional appeal is possible, provokes a
reexamination in the PTO, using the same presentations and arguments, even with a more lenient standard of proof, the PTO
ideally should not arrive at a different conclusion.” However, in the case at issue the majority found no inconsistency between
their previous ruling finding the claims not invalid, and affirming the Board’s rejection of the claims. The court noted that the
PTO’s preponderance of the evidence standard of proof is easier to meet than a court’s clear and convincing standard, and that
the PTO relied on additional references that were not before the district court.
Judge Newman dissented, arguing that the competitor relied on the same references before the district court and the PTO, as
the additional reference relied on by the examiner was only applicable to a dependent claim. Accordingly, Judge Newman
reasoned that the principles of finality and preclusion do not permit “administrative nullification of a final judicial decision”
where the same issues of fact and law were already decided in a judicial proceeding.
In Mintz v. Dietz Watson, Inc., (Appeal No. 2010-1341) the Federal Circuit vacated and remanded the district court’s summary
judgment of invalidity and affirmed the court’s summary judgment of non-infringement.
Mintz, the plaintiff, owned a patent for encasing meat products. The patented meat casing comprised a “stockinette” within
knitted netting which intersected in a “locking engagement” to form a grid-like pattern. The district court found that a person of
ordinary skill in the art would have familiarity with the knitting art, that the locking engagement used in the patented invention
was “common sense” in the knitting art, and that it would have been obvious to try. The district court found the claims invalid
as obvious, and non-infringed. Mintz appealed.
The Federal Circuit found the district court’s determinations regarding knowledge in the knitting art in error because the
relevant art was actually meat encasement, not knitting, and one of ordinary skill in the art of knitting has a different level of
“basic knowledge” than one of skill in the meat encasement art. The Federal Circuit also noted that the district court improperly
engaged in hindsight bias when it determined that the problem to be solved was merely forming a checkerboard pattern on
meat which had a solution in basic knitting skills. The district court framed the problem to be solved using the invention itself,
and failed to evaluate objective indicia of non-obviousness.
Regarding non-infringement, the Federal Circuit affirmed, agreeing that the defendant’s meat casing lacked the “locking
engagement” required by the Mintz patent. The Federal Circuit relied on Mintz’s argument during prosecution that a certain
prior art reference lacked the “locking engagement” to explain why Dietz did not infringe.
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