Source: https://www.schwabe.com/newsroom-publications-13308
Timestamp: 2019-04-18 19:11:47+00:00

Document:
Apotex – The Circuit affirms unenforceability based upon the intentional withholding of material prior art, keeping true facts from an expert, and making affirmative misrepresentations of material facts. The panel notes that the actions come close to the ‎misconduct that Therasense held could justify ‎a finding of inequitable conduct without showing but-for ‎materiality.
I/P Engine – In a concurring opinion Judge Mayer discusses Alice v. CLS Bank, and determines that the claims fall outside the ambit of §101.
Kilopass – In view of the Supreme Court's Octane Fitness decision, the Northern District of California reverses its prior denial of an attorney fee award, finding the case to be "exceptional."
The '556 patent is directed to a process for ‎manufacturing an inhibitor used to treat ‎hypertension.
The two accused products in this case, Univasc and ‎Uniretic, constitute prior art to the '556 patent, both products having been sold in the U.‎S. more than one year before the filing date.
The panel determines that the district court did not clearly err in ‎finding that Dr. Sherman knew, or at least had a strong ‎suspicion, that he was seeking to patent the very same ‎process used to obtain an already existing and widely ‎available drug. Dr. Sherman's statements were ‎not mere advocacy for a preferred interpretation; his ‎statements were factual in nature and contrary to the ‎true information he had in his possession. It is immaterial that, at that time, Dr. Sherman had no direct ‎knowledge of UCB's actual manufacturing process or had ‎determined the exact amount of moexipril magnesium ‎present in Univasc. He knew enough to recognize that he ‎was crossing the line from legitimate advocacy to genuine ‎misrepresentation of material facts. In the aggregate, Dr. ‎Sherman's conduct evidences a pattern of lack of candor. ‎The panel agrees with the district court that deceptive intent is the ‎single most reasonable inference that can be drawn from ‎the evidence, and therefore rules that the district court did not abuse its discretion in holding the '556 patent unenforceable due to inequitable ‎conduct.
Comments: In Therasense the en banc Federal Circuit was careful not to limit the exception for affirmative egregious acts to the filing of an unmistakably false affidavit. Therasense, Inc. v. Becton, Dickinson & Co., 649 F. 3d 1276, 1293 (Fed. Cir 2011). At the time, the majority noted that it needed to be "sensitive to varied facts and equitable considerations," but has yet to clarify what if anything other than the filing of a false affidavit could justify a "non-but-for" ruling of unenforceability.
According to the panel, the Supreme Court has held that this provision applies only to remands based on the grounds specified in ‎§ 1447(c)—namely, a defect in removal procedure or lack ‎of subject matter jurisdiction.‎ Here the district court remanded on a ground provided in § 1447(c); that is, in the district court's view the ‎complaint did not raise a claim or question of federal law ‎to give rise to federal jurisdiction. Section 1447(d) precludes the Circuit from second-guessing the district court's ‎jurisdiction determination regarding subject matter.
In a non-precedential split decision the Circuit found claims to be obvious that were directed to a method for filtering Internet search results that utilizes both content-based and collaborative filtering. The interesting part of the case is Judge Mayer's analysis of patentable subject matter under Alice Corp. v. CLS Bank, 134 S. Ct. 2347, 2359 (2014). Judge Mayer opines that the asserted claims disclose no new technology, but instead simply recite the use of a generic computer to implement a well-known and widely-practiced technique for organizing information, they fall outside of the ambit of §101. And, according to Judge Mayer, if this determination had been made in the first instance as directed by the Supreme Court, unnecessary litigation, and early two weeks of trial and imposition on citizen jurors, could have been avoided.
His concurring opinion noted that Alice made clear that abstract ideas untethered to any significant advance in science and technology are ineligible for patent protection, concluding that a computer-implemented system for mitigating settlement risk fell outside section 101 because it did not "improve the functioning of the computer itself" or "effect an improvement in any other technology or technical field." 134 S. Ct. at 2359.
According to Judge Mayer, I/P Engine's claimed invention, which describes a system which filters information for relevance to a user's query using combined content and collaborative data, does not pass muster under section 101. The asserted claims do not meet subject matter eligibility requirements because they do not "improve the functioning of the computer itself" or "effect an improvement in any other technology or technical field." Alice, 134 S. Ct. at 2359. To the contrary, the use of search engines was well-established and the clear advantages of combining content-based and collaborative filtering were widely recognized at the time of the claimed invention.
Judge Susan Illston of the Northern District of California reverses her prior ruling denying defendant Sidense's motion for attorney fees in view of the more lenient standard set forth in Octane Fitness for finding cases "exceptional" under 35 USC § 285. It will be recalled that in Octane Fitness LLC v. Icon Health & Fitness Inc., 134 S. Ct. 1749, 188 L. Ed. 2d 816 (2014), the Supreme Court held that an exceptional case is one that merely stands out from others, rejecting the prior Federal Circuit standard that required a showing of bad faith.
The patent in suit is directed to various memory devices and arrays of those devices. The district court previously determined that Sidense's systems did not infringe, but denied a motion for attorney fees based on the strict standards the Federal Circuit had dictated had to be met to grant such an award. The Federal Circuit vacated the district ‎court's judgment denying fees and remanded - for consideration of whether Kilopass acted in bad ‎faith in light of the totality of the circumstances.
Before the district court considered the remand, the Supreme Court issued its decision in Octane, ruling that a showing of bad faith on the part of one of the parties was not necessary in order to be entitled to attorney fees but instead a case may be exceptional simply if it stands out from others with respect to the ‎substantive strength of a party's litigating position or ‎the unreasonable manner in which the case was ‎litigated. District courts may determine whether a case ‎is "exceptional" in the case-by-case exercise of their ‎discretion, considering the totality of the ‎circumstances.
Applying the Octane test, Judge Illston finds that Kilopass failed to conduct an adequate pre-filing investigation. The theories of infringement that Kilopass asserted during the present action were objectively baseless, and its claims for literal infringement were meritless. Moreover, Kilopass litigated the present action in an unreasonable manner by shifting its theories of infringement late in the litigation without following the proper procedures for amendment of contentions, and engaging in conduct that at times amounted to gamesmanship. This is a case that stands out from others with respect to the substantive strength of plaintiff's litigating position and the unreasonable manner in which the case was litigated. Accordingly, based on the totality of the circumstances in the present action, the Court, exercising its sound discretion, concludes that the present action is an exceptional case under 35 U.S.C. § 285.
In determining whether to award attorney's fees, the trial judge may consider the closeness of the case, the tactics of counsel, the conduct of the parties, and any other factors that may contribute to a fair allocation of the burdens of litigation as between winner and loser. Based on these factors, the Court concludes that an award of attorney's fees in the present action is appropriate.

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