BASF Plant Sci., LP v. Commonw. Scientific and Indus. Research Org., Appeal Nos. 2020-1415, -1416, -1919, -1920 (Fed. Cir. Mar. 15, 2022)
Our Case of the Week, an appeal from the U.S. District Court for the Eastern District of Virginia, has something for everyone: questions of venue and statutory interpretation, invalidity and written descriptions, contracts and co-ownership of patents, and willfulness, injunctions, and royalty rates.
The appeals and cross-appeals have a long backstory. Commonwealth Scientific and Industrial Research Organisation (CSIRO) is a research arm of the Australian government, and owns six U.S. patents concerning engineering oils from plants. In 2017, BASF Plant Science sought a declaratory judgment of non-infringement against CSIRO, and CSIRO’s commercialization partners, regarding patents other than the patents-in-suit. CSIRO answered and counterclaimed for infringement of the patents-in-suit, adding Cargill, Inc., BASF’s commercialization partner as a counterclaim defendant. BASF asserted, as an infringement defense, that it co-owned the patents-in-suit by virtue of a 2008 contract between BASF and CSIRO. Cargill sought, and was denied by the district court, dismissal of the counterclaims against it for lack of personal jurisdiction and improper venue.
On the merits, the parties stipulated to infringement of the asserted claims of five of the six patents-in-suit, with the jury finding infringement of the sixth. The jury denied BASF’s invalidity challenges, including a challenge that the six asserted claims of the patents-in-suit lacked adequate written description. The jury found that BASF co-owned only one patent-in-suit, the ’792 patent, precluding infringement of the ’792 patent, but found no co-ownership and infringement of the other five patents. The district court would not find willfulness against the defendants and, instead of an infringement-stopping injunction, granted an ongoing royalty on all five infringed patents.
On the question of whether venue in the district was proper for Cargill, the Federal Circuit dove deep into statutory interpretation and Supreme Court precedent. The Federal Circuit ultimately made two holdings on venue. First, the Federal Circuit held that 28 U.S.C. § 1400(b) does not provide venue protection to third-party counterclaim defendants, which was Cargill’s role. The court, drawing a corollary to the Supreme Court’s reading of 28 U.S.C. § 1441(a) in Home Depot U.S.A., Inc. v. Jackson, 139 S. Ct. 1743 (2019), held that “defendant” in § 1400(b) did not include third-party counterclaim defendants, and therefore Cargill could not benefit from the protections of § 1400(b). Second, the Federal Circuit held that, even if Cargill could in theory benefit from § 1400(b), Cargill both had an established place of business and committed infringement in the district, thus venue even under § 1400(b) was proper.
Turning to the jury’s verdict that the asserted patent claims were supported by adequate written description, the Federal Circuit affirmed the jury on three of the challenged claims, based on sufficient evidence to support the jury’s finding, and reversed on three, based on insufficient support.
Regarding BASF’s co-ownership defense, BASF argued that CSIRO obtained the patents-in-suit by drawing on lessons CSIRO learned from experiments using both BASF and CSIRO materials. The Federal Circuit rejected this argument, finding insufficient support for BASF’s reading of the contract, and noting that “[t]he law has long recognized separate patentability and inventorship for advances that, as is routine, draw on lessons learned from earlier work of others.”
The Federal Circuit next turned to the remedies. Beginning with willfulness, the Federal Circuit held that, by showing only two facts creating a triable issue of willfulness, CSIRO failed to show a reversible error in the district court’s willfulness ruling. On the district court’s decision to preclude the jury determination of a royalty for past infringement, the Federal Circuit explained that the district court’s decision was based on CSIRO’s failure to lay the proper foundation for the royalty rate, and that CSIRO failed to establish any abuse of discretion by the district court. And finally, the Federal Circuit quickly affirmed the denial of the injunction, finding no fault in the district court’s analysis, including regarding the public harm caused by granting the injunction, but remanded the royalty calculation back to the district court to consider additional settlement agreements, agreements that had been entered into evidence but excluded from the district court calculation. The district court had excluded these settlement agreements from its calculation on the grounds they were not agreements between competitors. The Federal Circuit pointed out that the settlement agreements that were used in the calculation were also not agreements between competitors, and therefore there was inadequate reasoning from the district court as to why it only used certain settlement agreements in its calculation.
In a highly fact-specific, nine-page dissent, Judge Newman argued that substantial evidence did underpin the jury’s finding that the ’792 patent was co-owned by BASF, and that the majority was wrong to reverse the jury on this point.
The opinion can be found here.
By Tyler Hall
ALSO THIS WEEK
Biogen International GMBH v. Mylan Pharmaceuticals Inc., Appeal No. 2020-1933 (Fed. Cir. Mar. 16, 2022)
In a precedential order, the Court denied en banc review of the panel’s precedential decision in this case, which we wrote up late last year here. The case involves the written description requirement, and whether it was satisfied where the patent specifically mentioned the key dosage value at issue. The panel upheld the district court’s judgment of invalidity. The en banc court denied review. However, Judge Lourie, joined by Judges Moore and Newman, issued a 15-page dissent. Judge O’Malley, who issued the dissent in the panel decision, retired last week. Although she participated in the vote by the en banc panel, she did not issue an opinion in relation to the en banc order.
The opinion can be found here.
By Nika Aldrich
Almirall, LLC v. Amneal Pharmaceuticals LLC, Appeal No. 2020-2331 (Fed. Cir. Mar. 14, 2022)
In an appeal from a final written decision of the Patent Trial and Appeal Board, the Federal Circuit Court affirmed that the disputed claims were unpatentable as they “would have been obvious over the cited prior art at the time the alleged invention was made.” The patent at issue related “to methods of treating acne or rosacea.” The Court first addressed Almirall’s argument that “the Board erred in presuming obviousness based on overlapping ranges because no single reference disclose[d] all of the claimed ranges.” Specifically, Almirall argued that the presumption of obviousness only applies “when a single reference discloses all claimed ranges.” The Court rejected this argument, explaining that “[t]he point of our overlapping range cases is that, in the absence of evidence indicating that there is something special or critical about the claimed range, an overlap suffices to show that the claimed range was disclosed in—and therefore obvious in light of—the prior art.” The Court then addressed Almirall’s argument that “the Board’s obviousness determinations were unsupported by substantial evidence.” The Court also rejected this argument, explaining that the Board’s holding was supported by substantial evidence. The Court affirmed the Board’s final written decision.
The opinion can be found here.
By Annie White
