In a non-precedential decision on Jan. 6, 2009, the Court of Appeals for the Federal Circuit affirmed a district court’s dismissal of a request by a manufacturer to have another’s patent declared invalid or not infringed, when the patent owner had not threatened the plaintiff.  The case is styled “Panavise Products, Inc. v. National Products, Inc., Case No. 2008-1444, 2009 U.S. App. LEXIS 52 (Fed. Cir. 2009).

Plaintiff Panavise argued that the district court erred by finding the lack of any communication or conduct by the patent owner toward Panavise as “dispositive.” 

The Federal Circuit, in affirming, noted that there was a lack of evidence  of an actual "controversy … based on a real and immediate injury or threat of future injury that is caused by the defendants--an objective standard that cannot be met by a purely subjective or speculative fear of future harm." 2009 U.S. App. LEXIS 52, p. 8, quoting Prasco, LLC v. Medicis Pharm. Corp., 537 F.3d 1329, 1338 (Fed. Cir. 2008).  It noted that lack of direct pre-complaint communications is not sufficient to defeat subject matter jurisdiction, but that is only one factor to consider.  The court appeared to rely on the fact that Panavise did not provide any evidence that its product was similar to any product the patent owner had accused in other litigation.  Id.  There was also a declaration by the patent owner disclaiming knowledge of the Panavise product.

Category: Patent Validity - Anticipation

On Oct. 14, 2008, the Court of Appeals for the Federal Circuit addressed the International Trade Commission's issuance of an exclusion order against the importation of all downstream products containing imports of Qualcomm that it had determined infringed Broadcom’s U.S. Patent No. 6, 714,983.  The Federal Circuit agreed with the ITC that the patent had not been proven to be invalid, and that there was no direct infringement by Qualcomm.  The Court sent the case back to the ITC on the question of infringement, holding that the ITC had misapplied the standard for induced infringement, and it vacated the exclusion order against the downstream products, holding that it was granted without authority.  However, in determining that the patent had not been proven invalid, the court addressed whether the GSM standard (alleged to anticipate the patent) was a single reference or multiple documents, which would make the standard as a = whole unavailable in an anticipation analysis.  The Federal Circuit affirmed the ITC's determination that the standard was not a single reference:

The different specifications that comprise the GSM standard were authored by different subsets of authors at different times. Indeed, the GSM standard includes hundreds of individual specifications drafted by approximately ten different subgroups, each with its own title and separate page numbering. Each specification, though part of the greater GSM standard, stands as a separate document in its own right.  Even Qualcomm's witness--admittedly one of the most knowledgeable people in the world about the operation of GSM--testified that she had not read the entire standard and did not know of any person who had read the entire standard. Open Session Tr. 1712, Mar. 15, 2006. Under these circumstances, the GSM standard is actually several prior art references with separate dates of creation, rather than a single prior art reference.

Qualcomm also asserted that the various portions of the standard referenced each other, making the standard a single document, due to the concept of incorporation by reference.  The Federal Circuit disagreed because each of the various documents "at most...identifies itself as a part of the greater GSM standard; specifications at time cross-reference other specifications."  In a summary statement, the court also noted that the standard, as a whole could not be assigned "a single prior art date of creation."

An obviousness argument was not made regarding the effect of the various portions of the standard, taken together.

The case can be found at: 2008 U.S. App. LEXIS 21505. 

Category: International Trade Commission - Exclusion Order

On Oct. 14, 2008, In the Kyocera case, the Court of Appeals for the Federal Circuit addressed the International Trade Commission's issuance of a limited (as compared to a “general”) exclusion order against the  importation of all downstream products containing imports of Qualcomm that it had determined infringed Broadcom’s U.S. Patent No. 6, 714,983.  The Federal Circuit vacated the exclusion order against the downstream products, holding that it was granted without authority. 

The ITC has issued a "limited" exclusionorder against products that infringed, including products of downstream manufacturers who, importantly, were not named as respondents.  The Federal Circuit held that a limited exclusion order was inappropriate and that to have an exclusion order against unnamed parties, the higher requirements of a "general" exclusion order had to be met.  Those are: when it is "necessary to prevent circumvention of an exclusion order limited to products of named persons" or when "there is a pattern of violation...and it is difficult to identify the source of infringing products."  Because a general exclusion order had not been issued, the limited exclusion order was vacated and the Commission was directed on remand to "reconsider its enforcement options."

Category: Patent Settlement Agreements

On Oct. 15, 2008, the Federal Circuit affirmed summary judgment that a settlement agreement in a patent case does not violate the Sherman Act.

Generic defendants in a drug case agreed not to market until after the patent expired and not to challenge validity.  The patent owner agreed to make payments and optionally = supply the drug for resale. “Thus, the essence of the Agreements was to exclude the defendants from profiting from the patented invention.”  Regarding the reverse payment, in footnote 11, the Federal Circuit said, “Indeed, a sizable exclusion payment from the patent holder to the generic manufacturer is not unexpected under the Hatch-Waxman Act, where the relative risks of litigation are redistributed.”

The Federal Circuit distinguished the 6^th Circuit’s case of In re Cardizem, where a per se violation was held:

In particular, the settlement in that case included, in addition to a reverse payment, an agreement by the generic = manufacturer to not relinquish its 180-day exclusivity period, thereby delaying the entry of other generic manufacturers. In re Cardizem, 332 F.3d at 907.  Furthermore, the agreement provided that the generic manufacturer would not market non-infringing versions of the generic drug. Id. at 908 n.13. Thus, the agreement clearly had anticompetitive effects outside the exclusion zone of the patent.

Specifically, the Federal Circuit stated that a district court need not consider the validity of the patent in the antitrust analysis of a settlement agreement involving a reverse payment, in the absence of evidence of fraud before the PTO or sham litigation:

We disagree that analysis of patent validity is appropriate in the absence of fraud or sham litigation. Pursuant to statute, a patent is presumed to be valid, 35 U.S.C. [Section] 282, and patent law bestows the patent holder with "the right to exclude others from profiting by the patented invention." Dawson Chem. Co. v. Rohm & Haas Co., 448 U.S. 176, 215 (1980). A settlement is not unlawful if it serves to protect that to which the patent holder is legally entitled--a monopoly over the manufacture and distribution of the patented invention. In re Tamoxifen, 466 F.3d at 208-09.

The case is available at: 2008 U.S. App. LEXIS 21505