Allergan’s attempt to shield its Restasis patents from inter partes review by assigning the patents to the Saint Regis Mohawk Tribe was rejected last week by a unanimous Federal Circuit panel. The Federal Circuit affirmed the PTAB’s February 2018 decision holding that tribal sovereign immunity does not bar IPRs.
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In a highly anticipated ruling, the Supreme Court upheld the constitutionality of inter partes review proceedings. Justice Thomas, writing for the seven-member majority in Oil States Energy Services, LLC v. Greene’s Energy Group, LLC, held that the Patent Trial and Appeal Board could reconsider and cancel patent claims through inter partes review without violating Article III or the Seventh Amendment of the Constitution.
In a highly anticipated decision on the Saint Regis Mohawk Tribe’s motion to terminate inter partes review proceedings, the Patent Trial and Appeal Board rejected tribal sovereign immunity to IPRs. The PTAB’s decision also raised doubts about the effectiveness of assignments even in cases where the sovereign assignee has immunity but the assignor effectively still owns the patent. The portion of the decision broadly holding that tribal sovereign immunity does not apply to IPRs came as a surprise to some commentators, who observed that the PTAB could have reached the same result on narrower grounds. Following on the heels of the PTAB’s December 2017 University of Minnesota decision holding that a sovereign waives immunity to IPRs when it asserts the patent at issue in district court, Saint Regis Mohawk Tribe deals another blow for patentees seeking to avoid IPRs with sovereign immunity.
The Federal Circuit’s recent decision in Promega Corp. v. Life Technologies Corp. is a cautionary tale that failure to present evidence of damages closely tied to each alternative basis of liability may result in a hollow victory – infringement with no corresponding damages. The Federal Circuit, on remand from the Supreme Court, affirmed the district court’s rulings in a patent suit against Life Technologies that both overturned the jury’s $52 million infringement verdict in favor of Promega, and denied Promega’s motion for a new trial on damages and infringement. The Federal Circuit held that Promega was not entitled to any damages under the narrow “all-or-nothing” damages strategy that Promega had pursued throughout the litigation, and that Promega had waived any alternative damages arguments.
In July, a split panel of the Federal Circuit upheld the district court’s use of an adverse inference from litigation misconduct to hold a patent unenforceable for inequitable conduct. The Federal Circuit’s decision in the case, Regeneron Pharmaceuticals Inc. v. Merus NV, raises interesting questions about the relationship between attorney misconduct during litigation (which is not supposed to affect the enforceability of a patent) and misconduct during prosecution of the patent (which can). Because the court’s opinion gives no clear answer to these questions, it opens new tactical opportunities for defendants asserting inequitable conduct defenses in patent cases and may incrementally expand the use of a doctrine that the Federal Circuit has famously referred to as a “plague” and repeatedly tried to rein in.
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In Life Technologies Corp. v. Promega, the Supreme Court reversed the Federal Circuit’s interpretation of 35 U.S.C. § 271(f)(1), and held that a single component does not constitute a “substantial portion of the components of a patented invention” under the statute. The Court, however, declined to address how many components are needed to trigger liability.
In Rapid Litig. Mgmt. Ltd v. CellzDirect, Inc., the Federal Circuit reversed a ruling of patent invalidity under Section 101, reviving a biotech patent to a method of preserving hepatocytes, liver cells, for medical use. The Federal Circuit reversed the district court at both steps of the Supreme Court’s framework for patent eligibility set out in Mayo Collaborative Servs. v. Prometheus Labs., Inc., 132 S. Ct. 1289 (2012). In the wake of the Supreme Court’s recent denial of certiorari in Sequenom Inc., v. Ariosa Inc., where Sequenom sought guidance on the proper application of the Mayo two-step test, the Federal Circuit’s decision provides important guidance for how to determine patent eligibility for biotech inventions that build on natural discoveries. It also may help stem what many, including several Federal Circuit judges, have described as a crisis in medical innovation due to how courts and the Patent Office have applied Mayo.