Limits of Inherent Anticipation in Product-by-Process Claims
In Restem, LLC v. Jadi Cell, LLC, Appeal No. 23-2054, the Federal Circuit held that inherency in product-by-process claims requires the prior art to inevitably produce the claimed product—not merely disclose similar process steps.
Jadi Cell’s patent covers isolated stem cells produced from mammalian umbilical cord tissue by a process with two key steps: (1) placing the subepithelial layer (SL) of the umbilical cord tissue in direct contact with a growth substrate, and (2) culturing the SL to produce cells with a specific marker expression profile. Restem sought inter partes review. In a final written decision, the Board found that while the prior art references cited by Restem disclosed similar process steps for culturing umbilical cord-derived stem cells, they did not necessarily result in the claimed product—that is, the prior art did not necessarily produce cells with the precise marker expression pattern recited in Jadi Cell’s claims.
Restem appealed, arguing that the prior art inherently anticipated the claims because it used comparable or identical isolation and culturing techniques, and therefore, once the process steps are met by the prior art, the product is necessarily present. In other words, Restem argued inherency is automatic for product-by-process claims and the Board erred in finding that the prior art did not inherently anticipate the challenged claims. However, the Federal Circuit rejected this argument, explaining that inherency in product-by-process claims is not satisfied merely because a prior art process is similar, or even identical—the end result must inevitably include the claimed product. The Federal Circuit affirmed the Board’s decision because substantial evidence showed that different culturing conditions and cell-to-cell interactions could influence cell marker expression, meaning the prior art did not necessarily yield the claimed cell population.
Distribution and Marketing May Satisfy the Economic Prong of the Domestic-Industry Requirement
In Lashify, Inc. v. ITC, Appeal No. 23-1245, the Federal Circuit held that warehousing, quality control, distribution, sales, and marketing expenses may constitute “significant employment of labor or capital” under 19 U.S.C. § 1337(a)(3)(B) to satisfy the economic prong of the domestic-industry requirement in ITC cases.
Lashify filed a complaint before the ITC alleging that multiple importers were importing products that infringe Lashify’s patents pertaining to eyelash extensions and related accessories. The ITC declined to consider Lashify’s expenditures for warehousing, quality control, distribution, sales, and marketing of its products. Accordingly, determining that Lashify had not established domestic industry because Lashify failed to satisfy the economic-prong requirement, the ITC denied relief. Lashify appealed.
Lashify argued that the ITC’s holdings were contrary to the statutory language and the Federal Circuit agreed. The ITC reasoned that large expenditures for domestic employment of labor or capital are insufficient when the labor or capital is used for sales or marketing alone, and when the labor or capital is used for warehousing, quality control, and distribution if the products are not domestically manufactured and no additional steps are taken in the U.S. to make them saleable. However, the Federal Circuit determined that these limitations have no basis in the statute and, in fact, “clause (B) covers significant use of ‘labor’ and ‘capital’ without any limitation on the use within an enterprise to which those items are put[.]” Thus, the Federal Circuit vacated and remanded to the ITC for reconsideration under the proper standard.
An Obvious Solution to an Unknown Problem
In Immunogen, Inc. v. Stewart, Appeal No. 23-1762, the Federal Circuit held that even if the specific problem solved by an inventor were unknown in the art, the claimed solution to the problem could still be found obvious.
ImmunoGen filed a civil action in district court under 35 U.S.C. § 145 to obtain a patent directed to a cancer treatment method using an immunoconjugate drug known as IMGN853. The applied-for claims recited a specific dosage of 6 mg/kg of the patient’s adjusted ideal body weight (AIBW), which the patent explained could avoid the negative side effect of ocular toxicity. After a bench trial, the district court found the claims were obvious over ImmunoGen’s own prior art that disclosed dosing IMGN853 based on total body weight (TBW) in view of prior art disclosing dosing based on AIBW. The district court also held the claims were indefinite because the application did not define how to calculate AIBW, when there were multiple known formulas to do so.
On appeal, ImmunoGen argued that the district court erred in analyzing motivation to combine because it was undisputed that at the time of the invention, a person of ordinary skill in the art would not have known that IMGN853 caused ocular toxicity in humans. The Federal Circuit explained, however, that even if the specific problem the inventors purported to solve via the dosing regimen was unknown, that did not necessarily mean that the dosing regimen itself was not obvious. The Federal Circuit found no error in the district court’s analysis because although IMGN853 was not known to cause ocular toxicity, ocular toxicity was a well-known side effect of administering immunoconjugates that contain a drug known as DM4. And because IMGN853 contains DM4, a person of ordinary skill would therefore have understood the potential risk of ocular toxicity and monitored for it when testing IMGN853. Moderating the dosage to avoid the problem therefore would have been obvious.
ImmunoGen also argued that it would not have been obvious to base the dosage on the patient’s AIBW, as opposed to using the patient’s TBW. But the Federal Circuit rejected that argument because the prior art disclosed a dose of 6 mg/kg TBW, and for some patients, their AIBW is the same as their TBW. Thus, the Federal Circuit affirmed the district court’s decision that the claims were obvious and did not reach ImmunoGen’s arguments regarding indefiniteness.
Pulling the Cord on Unstated Claims Limitations
In IQRIS Technologies LLC v. Point Blank Enterprises, Inc., Appeal No. 23-2062, the Federal Circuit held that the district court erred in construing the term “pull cord” as a directly pulled cord that lacks a handle.
IQRIS Technologies LLC sued Point Blank Enterprises, Inc. and National Molding, LLC alleging infringement of two of IQRIS’s patents for tactical vests. The district court construed the claim term “pull cord” to mean cords directly pulled by a user that lack a handle. Point Blank and National Molding moved for summary judgment of noninfringement. The district court granted the motion because the accused product lacked a “pull cord” under the court’s definition of the term. IQRIS appealed, arguing that the district court erred in its construction of “pull cord.”
The Federal Circuit held that the district court erred in construing “pull cord.” The Federal Circuit ruled that “pull cord” should be given its plain and ordinary meaning because the claim language did not limit who or what pulls the pull cord, and because the specification did not explicitly redefine the term or disavow the full scope of the term. The court held that the specification did not disclaim pull cords with handles by disparaging prior art devices with handles because that prior art was criticized for an unrelated reason, not because it had handles. The Federal Circuit therefore vacated the grant of summary judgment and remanded for further consideration.
The Board Must Provide Reasoned Explanation When Discarding Material, Unrebutted Evidence
In CQV Co., Ltd. v. Merck Patent GMBH, Appeal No. 23-1027, the Federal Circuit held that the Board erred by failing to explain why it discarded material and unrebutted evidence that a reference constitutes prior art.
CQV petitioned for PGR challenging claims of Merck’s patent, which is directed to transparent alumina flakes used as effect pigments in paints and coatings. The specification of Merck’s patent explains that effect pigments based on alumina flakes are common and commercially available under the name Xirallic. CQV alleged that various claims were obvious based on a particular lot of Xirallic called “Sample C” in combination with other references. The Board found CQV failed to show Sample C qualifies as prior art and thus failed to show the unpatentability of any claim.
On appeal, the Federal Circuit held that the Board erred by failing to consider the whole record. The court found that CQV presented “highly material and unrebutted evidence” that Sample C qualified as prior art, which the Board improperly “discarded without explanation.” The court rejected Merck’s attempt to explain why the Board may have discarded such evidence because Merck’s arguments, while plausible, were not findings the Board made and there was no basis in the Board’s decision to infer the Board’s reasoning. Because the Board never explained its reasoning for disregarding relevant and unrebutted evidence, the court noted “we cannot reasonably discern whether the Board followed a proper path.” Thus, the Federal Circuit vacated and remanded, instructing the Board to carefully consider and explain whether the evidence, taken together, shows Sample C constitutes prior art.
Where Method Claim Steps Are Connected by “And,” a Covered Method Must Perform Each Step
In Sierra Wireless, ULC v. Sisvel S.P.A., Appeal No. 23-1059, the Federal Circuit held that the Board erred by finding method-claim steps connected by “and” to be conditional and by never explaining its reasoning for relying on the testimony of an expert who failed to meet the Board’s definition of one of ordinary skill in the art.
Sierra Wireless and others petitioned for IPR challenging claims of Sisvel’s patent as anticipated and obvious. The claims recited a wireless communication method with the following steps: 1[a] detecting a missed data block; 1[b] starting a timer; 1[c] stopping the timer when the missed data block is received while the timer is running; and 1[d] transmitting a status report after the timer expires. The Board defined the level of ordinary skill in the relevant art as requiring an electrical engineering degree. The Board then construed the claims to require either step 1[c] or step 1[d] because the timer cannot both be stopped while running (step 1[c]) and also expire without having been stopped (step 1[d]). Based on that construction, the Board found Sierra’s prior art reference anticipated and rendered obvious some claims because it disclosed steps 1[a], 1[b], and 1[c]. The Board also found certain dependent claims unpatentable based on the testimony of Sisvel’s expert witness, who lacked an electrical engineering degree.
The Federal Circuit rejected the Board’s claim construction. The court held that because steps 1[c] and 1[d] are connected by “and,” the plain language “requires that a method, to come within the claim, must perform both limitations 1[c] and 1[d] where their preconditions apply.” The court also held that no substantial evidence supported the Board’s finding that Sierra’s prior art reference disclosed step 1[c]. For these two reasons, the court vacated the Board’s anticipation and obviousness findings and remanded. The Federal Circuit also vacated and remanded the Board’s finding that the dependent claims were unpatentable because the Board never explained its reasoning for relying on expert testimony from a witness who did not meet the Board’s definition of the level of ordinary skill in the art.
Jepson Claim Preamble Requires Written Description Support for Conventional Aspects of the Invention
In Re: Xencor, Inc., Appeal No. 24-1870, the Federal Circuit held that to provide adequate written description for a Jepson claim, the applicant must establish that what is claimed to be well known in the prior art is, in fact, well known in the prior art.
Xencor filed a U.S. patent application with a Jepson claim and a method claim. Both claims have preambles that recite “treating a patient by administering an anti-C5 antibody.” The patent examiner rejected both claims for lack of written description. After a series of appeals within the U.S. Patent Office and the Federal Circuit, the Appeals Review Panel (“ARP”) of the Patent Trial and Appeal Board affirmed the examiner’s rejection. Xencor appealed the ARP’s decision to the Federal Circuit.
The Federal Circuit affirmed. It noted a Jepson claim uses the preamble to recite elements or steps of the claimed invention that are conventional or known. Xencor had agued those conventional or known aspects do not require written description support. The Federal Circuit rejected that argument and noted adequate written description for a Jepson claim requires the applicant to establish that what is claimed to be well known in the prior art is, in fact, well known in the prior art. The Court found substantial evidence that Xencor did not do so for the “anti-C5 antibody” claimed in the preamble of its Jepson claim. For Xencor’s method claim, the Federal Circuit affirmed that the preamble term “treating a patient” limits the claim and that Xencor’s patent application lacks written description for that term.
To Support a Finding of Unpatentability, Each Claim Limitation Should Be Discussed.
In Amp Plus, Inc. v. DMF, Inc., Appeal No. 23-1997, the Federal Circuit held that substantial evidence supported the Board’s determination that the appellant failed to show the unpatentability of a claim because its supporting documents did not discuss a claim element.
ELCO petitioned for IPR challenging claims of DMF’s patent as anticipated and obvious. ELCO argued that one claim was obvious in view of two brochures directed towards light fixtures for marine applications. On remand, the Board concluded that ELCO failed to show the unpatentability of the claim because it presented “no analysis” of a portion of a limitation. ELCO appealed.
ELCO argued that the Board erred in not finding the claim anticipated because the Board had previously found that a similar claim was anticipated. The Federal Circuit rejected this argument because ELCO’s petition argued the challenged claim was obvious, not anticipated. ELCO also argued that the Board’s determination was unsupported by substantial evidence. Noting that ELCO’s petition and the supporting documents did not discuss a claim requirement, the Federal Circuit ruled that this omission constituted substantial evidence supporting the Board’s determination that ELCO had failed to show the unpatentability of the claim.
The Federal Circuit noted that “ELCO’s position boils down to an invitation for this court to comb through other sections of its petition and find support for its obviousness argument,” and that “the law of obviousness does not require the court, or the Board, to develop arguments for a limitation that the petition simply did not make.” The Federal Circuit affirmed.
Portions of a § 102(e) Prior-Art Reference That Do Not Find Support in its Provisional Application Are Not Afforded the Provisional Application’s Filing Date
In Re Riggs, Appeal No. 22-1945, the Federal Circuit held that a reference that qualifies as prior art under pre-AIA 35 U.S.C. § 102(e) is afforded the filing date of its provisional patent application only for portions of the reference that find written description support in the provisional.
Several individuals (the “named inventors”) filed a patent application. An examiner rejected the patent application over a U.S. patent application publication to Lettich (“Lettich”). The examiner found Lettich was prior art under pre-AIA § 102(e). Lettich published after the priority date of the named inventors’ patent application but claimed priority to a provisional patent application that published before that priority date (the “Lettich Provisional”). The named inventors appealed the rejection to the Patent Trial and Appeal Board (the “Board”). After a series of decisions, a request for rehearing, multiple appeals, and remand, the Board affirmed the subject rejection. In doing so, the Board found that Lettich qualified as prior art under § 102(e) because one of its claims found written description support in the Lettich Provisional. The named inventors appealed to the Federal Circuit.
The Federal Circuit vacated the Board’s decision that Lettich qualifies as prior art under § 102(e). It announced that “the provisional application must . . . provide written description support for the specific portions of the patent specification identified and relied on in the prior art rejection.” The court found the Board had not completed this analysis for the subject rejection. Therefore, the Federal Circuit remanded for the Board to determine whether the Lettich Provisional provides written description support for the specific disclosures in Lettich that the examiner identified and relied on in the subject rejection.
Patent Damages Award Reduced for Improper Inclusion of Convoyed Sales
In Wash World Inc. v. Belanger Inc., Appeal No. 23-1841, The Federal Circuit remitted convoyed-sales damages for patent infringement based on a lack of evidence that patented and unpatented components of the infringing system constitute a functional unit.
Belanger Inc. sued Wash World Inc. for patent infringement. A jury returned a general verdict finding infringement and awarding Belanger $9.8 million in lost profits and $260,000 in reasonable royalties. The district court entered judgment consistent with the verdict. Wash World filed a motion for judgment as a matter of law that included an alternative request for remittitur of the damages award. The district court denied Wash World’s motion. Wash World appealed.
The Federal Circuit reversed the denial of remittitur. It found the district court abused its discretion by entering judgment on a damages award that improperly included approximately $2.6 million in lost profits from convoyed sales. As an initial matter, the Federal Circuit found Wash World had preserved its remittitur argument despite failing to expressly ask the district court for remittitur of a specific amount for convoyed sales. The court noted that Wash World’s briefing in support of its motion for judgment as a matter of law included all specific data supporting its request for remittitur, expressly referred to remittitur as potential relief, and asked the district court to reduce damages by a specific dollar amount per unit. Moreover, the Federal Circuit found that, even if Wash World had forfeited its request for remittitur, exceptional circumstances would warrant reaching the merits of remittitur. Namely, the court found that it could discern the precise amount of damages the jury awarded based on convoyed sales, that Belanger is judicially estopped from contending otherwise, and that the requirements for obtaining lost profits for convoyed sales are plainly not satisfied. Turning to the merits, the court considered testimony from Belanger’s expert that non-patented components included as convoyed sales were sold as a “package” with the patented system. The court found the testimony did not demonstrate the components and system constitute a functional unit, which is necessary to establish entitlement to lost profits for the component sales. Finding no other evidence of the requisite functional relationship, the Federal Circuit vacated and remand the damages portion of the judgment and ordered the district court to remit the damages award by $2.6 million.
