Source: http://www.pharmapatentsblog.com/2011/07/28/federal-circuit-clarifies-burden-of-proof-for-priority-of-invention/
Timestamp: 2013-12-10 18:02:13
Document Index: 292780435

Matched Legal Cases: ['§ 291', '§ 291', '§ 291', '§ 102', '§102', '§ 102', '§102', '§ 291']

Federal Circuit Won't Let Creative Compounds Muscle Its Way Into Priority Of Invention | PharmaPatents
Home > 102 > Federal Circuit Won’t Let Creative Compounds Muscle Its Way Into Priority Of Invention
Federal Circuit Won’t Let Creative Compounds Muscle Its Way Into Priority Of Invention
Posted By Courtenay Brinckerhoff on 28 July 2011 Posted in 102; Federal Circuit Decisions
In Creative Compounds, LLC v. Starmark Laboratories, the Federal Circuit clarified that the “clear and convincing” burden of proof applies to an allegation of prior invention unless an action is brought under 35 USC § 291 or the parties identify and agree on common claimed subject matter and seek an adjudication of priority. While Patent Reform may do away with the specific provisions at issue in this case, at least some of the principles may carry over to the proposed “derivation” proceedings.
The patents at issue are directed to specific creatine compounds, used as dietary supplements to provide “energy for work and exercise performance.”
Starmark’s patent, U.S. 7,109,373, was filed December 18, 2003 and claims priority to a provisional application filed December 18, 2002. Claim 1 is directed to a creatine salt comprised of two creatine cations and a dicarboxylic acid anion, while claim 3 recites an anion of malic acid in particular. Starmark’s patent was granted on September 26, 2006.
Creative’s patent, U.S.7,129,273, was filed April 30, 2003. Claim 1 is directed to a “dicreatine malate compound comprising approximately two creatine cations per one malic acid dianion.” Creative’s patent was granted on October 31, 2006.
The Notice of Allowance Letters When the Starmark patent received a Notice of Allowance, the patentee sent letters to dicreatine malate customers advising them that the patent was going to issue. This prompted Creative to send letters about the allowance of it’s patent. Creative also alleged that the Starmark patent was invalid:
Several of Starmark’s customers received this letter and advised Starmark that they would not license its patent because it was not valid.
Creative sought a declaratory judgment that Starmark’s patent was invalid and not infringed. Starmark counterclaimed for infringement and moved for summary judgment on all counts. The district court granted Starmark’s motion and Creative appealed to the Federal Circuit.
(There are other interesting issues in this case that I am not addressing here, including the lack of declaratory judgment jurisdiction over Creative’s patent.)
The Burden of Proof Creative argued that the district court applied the incorrect burden of proof (clear and convincing evidence) to its invalidity claim. In particular, Creative argued that the court should have applied the preponderance of the evidence standard that applies in interference proceedings between co-pending patents: Because the ’373 Patent and ’273 Patent were co-pending and Creative alleges that there is no patentable distinction between claim 1 of the ’273 Patent and claim 3 of the ’373 Patent, Creative claims it was entitled to a preponderance of the evidence standard for proving invalidity of the ’373 Patent.
The Federal Circuit acknowledged a previous decision where it stated that “the formality of invoking § 291 ["Interfering Patents"] should not affect the standard of proof for establishing priority of invention.” Thus, the court determined that the fact that Creative did not bring a suit under 35 USC § 291 was not dispositive.
However, the Federal Circuit noted that in its previous non-interference case where the preponderance of the evidence standard was applied, the parties had “agreed that the same invention was common to the patents and application,” and had sought adjudication of priority of invention. Because Creative and Starmark “did not identify or agree on common claimed subject matter,” the special circumstances justifying the preponderance of the evidence standard did not apply.
[W]e now hold that an accused infringer cannot obtain the benefit of the lower burden of proof that prevails in an interference proceeding simply by alleging, as a defense to infringement, that the asserted patent is invalid based upon a co-pending patent unless common claimed subject matter is first identified and an adjudication of priority is sought.
Having decided that the district court applied the correct burden of proof, the Federal Circuit turned to the merits of Creative’s invalidity claims.
Creative’s § 102(g) Claim
Creative alleged that Starmark’s patent was invalid under 35 USC §102(g)(2) based on Creative’s prior invention:
A person shall be entitled to a patent unless …. before such person’s invention thereof, the invention was made in this country by another inventor who had not abandoned, suppressed, or concealed it. In determining priority of invention under this subsection, there shall be considered not only the respective dates of conception and reduction to practice of the invention, but also the reasonable diligence of one who was first to conceive and last to reduce to practice, from a time prior to conception by the other. The Federal Circuit found that Creative’s evidence of prior conception did not raise a genuine issue of material fact. For example, Creative relied on an email order for “dicreatine malate,” but did not present evidence that the inventor “actually possessed an operative method of making dicreatine malate.”
Creative’s bald assertion that Cornelius was “diligent” during the intervening eighteen months . . . fails to raise a genuine issue of material fact as to diligence . . . . Merely asserting diligence is not enough; a party must “account for the entire period during which diligence is required.”
Creative’s § 102(f) Claim
Creative alleged that Starmark’s patent was invalid under 35 USC §102(f) based on derivation:
As summarized by the Federal Circuit, Creative’s derivation claim required proof of both (i) prior conception and (ii) “communication of that conception to [Starmark].” In addition to failing to raise a genuine issue of material fact as to prior conception, Creative failed to present adequate evidence on a qualifying communication. Although Creative presented testimony from the inventor, the Federal Circuit noted that inventor testimony alone is never sufficient:
The case law is unequivocal that an inventor’s testimony respecting the facts surrounding a claim of derivation or priority of invention cannot, standing alone, rise to the level of clear and convincing proof.
Thus, the Federal Circuit affirmed the district court’s ruling upholding the validity of Starmark’s patent.
The current version of the Leahy-Smith America Invents Act (H.R. 1249) would revise 35 USC § 291 to relate only to “Derived Patents:”
It is not clear how much of the existing case law “baby” Congress intends to throw out with the interference “bathwater,” but it is likely that this provision will inherit at least some of the jurisprudence developed under the current statute, such as the basic elements of a “derivation” claim (e.g., (i) prior invention and (ii) communication) and the requirement to corroborate inventor testimony. A more interesting question will be the burden of proof that applies to such proceedings, since the proposed legislation does not appear to address that issue. Perhaps by keeping the same statute number (291) Congress intends to carry over the preponderance standard.
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