AIPLA IP Practice in Japan Committee Pre-Meeting

Ranga SourirajanJanuary 27, 2009

2008 Federal Circuit

The opinions expressed herein are not to be attributed to the Firm’s clients

In re Bilski Egyptian Goddess v. Swisa

En Banc Opinions

Declaratory Judgment• Personal jurisdiction (Avocent Huntsville)• Subject matter jurisdiction (Caraco; Cat Tech; Janssen; Micron;

Prasco)Jurisdiction• In Personam Jurisdiction (Campbell Pet; Medical Solutions)• Subject Matter Jurisdiction (Excelstor Tech.)Standing (Lucent; Mars)Writ of Mandamus (In re TS Tech)Multidistrict Litigation (In re Omeprazole Pat. Litig.)Settlement Agreement and Antitrust (In re Ciprofloxacin Hydrochloride)Open Source License (Jacobsen)Standards Setting (Qualcomm)ITC’s Exclusion Order (Kyocera Wireless)

Panel Opinions and Order

Claim Construction (800 Adept)Means-Plus-Function (Welker Bearing; Net Moneyin)Reverse Doctrine of Equivalents (Roche)Invalidity• Indefiniteness (Star Scientific)• Obviousness (In re DBC; Asyst Tech.)• Lack of Written Description (In re Alonso; Carnegie Mellon Univ.)• Anticipation (Net Moneyin; Cohesive Techs.)• Obviousness-Type Double Patenting (In re Basell Poliolefine)Inequitable Conduct (Star Scientific)Joint Infringement (Muniauction)Damages• Subsidiary (Mars)• Exceptional Case (Takeda Chemical; Nilssen)

Panel Opinions and Order

Preliminary Injunction

• Procedural (Procter & Gamble)

• Substantive (Abbott Labs.)

Reexamination (In re Swanson; Cooper Techs.)

Maintenance Fee (Burandt)

Panel Opinions and Order

Declaratory Judgment Act

The judicial Power shall extend to The judicial Power shall extend to all Cases . . . to all Cases . . . to Controversies . . . U.S. Const., Controversies . . . U.S. Const., art. III, art. III, § 2§ 2

Facts• MedImmune manufactures Synagis, a drug to treat respiratory tract disease• Genentech granted MedImmune a license to make, use and sell subject matter

covered by a patent and a pending application• After pending application issued as patent, Genentech sent a letter to

MedImmune alleging that Synagis infringed its patent and demanded royalty• MedImmune believed patent to be invalid and unenforceable, and the letter a

clear threat to enforce patent; MedImmune filed DJ actionProcedure• C.D. Cal. dismissed the DJ action for lack of subject matter jurisdiction under

the “reasonable apprehension of suit” test• Fed. Cir. affirmed the DCT decision; MedImmune filed certHolding• A justiciable declaratory judgment action exists when “the facts alleged, under

all the circumstances, show that there is a substantial controversy, between parties having adverse legal interests, of sufficient immediacy and reality to warrant the issuance of a declaratory judgment”

MedImmune v. Genentech

Facts• Avocent Huntsville and Avocent Redmond (Avocent), and Aten, a Taiwanese

Co., compete in keyboard-video-mouse switches market• Aten owns U.S. Pat. Nos. 6,957,287 and 7,035,112 re: KVM switches• Aten sent a letter to Avocent Corp. (parent), a letter to Amazon.com; a letter to

Avocent Redmond during ongoing litigation in W.D. Wash.• Avocent filed DJ in N.D. Ala. Procedure• DCT grants Aten’s FRCP 12(b)(2) MTD for lack of personal jurisdiction • No “systematic and continuous contact” by Aten with AlabamaArguments• Avocent: general jurisdiction under “stream of commerce” theory• Aten: no specific jurisdiction based on letters asserting infringement

Holding • (1) Mere acts of making, using, offering to sell, selling, or importing products

to a forum do not satisfy the “other activities” requirement for specific personal jurisdiction over patentee; (2) no specific jurisdiction over patentee based only on letters asserting infringement

Avocent Huntsville v. Aten Int’l

Reasoning• “General” jurisdiction: Def. have “continuous and systematic” contacts with

forum• “Specific” jurisdiction: (1) Def. purposefully directed activities at forum (2)

claim arises out of or relates to the activities (3) jurisdiction assertion is reasonable and fair

• Letters threatening suit by themselves are insufficient to create personal jurisdiction because it would not comport with “fair play and substantial justice”

• “other activities” in addition to cease and desist letters to meet “relate to” requirement: judicial or extra-judicial patent enforcement within forum; entering into exclusive license agreement imposing obligations on forum resident

Dissent (Newman, J.)• Personal jurisdiction exists because (1) infringement letter sent to Avocent

Corp.’s President in Ala.; (2) sale of Aten’s products through distributors and retail stores in Ala.; (3) Aten’s contacts with Avocent’s customers; (4) Avocent’s manufacture of accused infringing products; (5) no clear alternative forum; (6) due process and fairness

Avocent Huntsville v. Aten Int’l

Facts• Janssen holds NDA for Risperdal® Oral Solution, drug to treat schizophrenia

• Janssen owns U.S. Pat. Nos. 4,804,663, 5,453,425, and 5,616,587

• Apotex stipulated to infringement, validity and enforceability of ‘663 patent

• Teva first ANDA applicant on ‘425 and ‘587 patents; Apotex second filed ANDA on ‘425 and ‘587 patents and later amended to add ‘663 patent

• Janssen sued Apotex for infringement of ‘663 patent

• Apotex counterclaimed DJ of noninfringement of ‘425 and ‘587 patents

• Janssen gave Apotex a covenant-not-to-sue with respect to ‘425 and ‘587 patents

Procedure• D. N.J. dismisses Apotex’s DJ action for noninfringement against Janssen

Janssen Pharmaceutica v. Apotex

Holding• (1) second ANDA applicant’s exclusion from the market because of first

ANDA applicant’s entitlement to statutory exclusionary period; (2) possible delay in the future of a first ANDA applicant’s launch of generic product; or (3) covenant-not-to-sue which protects ANDA applicant’s affiliates, suppliers and downstream customers do not give rise to “actual controversy”

Reasoning• If Apotex had not stipulated to validity of ‘663 patent, Caraco would be

controlling

• At the time when DCT entered final judgment, Apotex’s harm was speculative

• “having manufactured” language of covenant-not-to-sue expressly covers suppliers and affiliates

Janssen Pharmaceutica v. Apotex

Facts• Prasco makes generic benzoyl peroxide cleansing product• Prasco brought DJ of noninfringement; at the time, Prasco had not marketed its

product and defendants did not know of its existence• Defendants filed MTD; later, Prasco sent a sample and requested covenant-not-

to-sue, which defs. declined; Prasco filed amended complaintProcedure• DCT granted MTD finding no case or controversy under the “reasonable

apprehension” test• DCT noted that result would be the same since there was “no definite and

concrete dispute that touches legal relations of parties”Holding• Patentee’s marking of its products, prior suit involving other patents, and

patentee’s refusal to sign covenant-not-to-sue do not create immediate and real controversy

Reasoning• No jurisdiction without patentee’s affirmative act; mere knowledge of patent or

perceived risk of infringement insufficient• Laundry list: creates reasonable apprehension of suit, demands royalty, creates

barrier to regulatory approval

Prasco v. Medicis Pharm.

Facts• Cat Tech owns U.S. Pat. No. 6,905,660 directed to method for using loading

devices to place catalyst particles into multi-tube chemical reactors

• TubeMaster designs 4 different configurations of loading devices used to put catalyst into reactor tubes

• Cat Tech sued TubeMaster for infringement; TubeMaster counterclaimed for declaration of noninfringement; Cat Tech amended complaint seeking DJ of infringement

Procedure• DCT grants TubeMaster’s motion for declaration of noninfringement because a

“live controversy” existed as to certain design configurations

Cat Tech v. TubeMaster

Holding• DCT may issue a declaratory judgment when the declaratory judgment plaintiff

has taken significant, concrete steps to conduct infringing activity and the dispute meets the “immediacy” and “reality” requirements

Reasoning• Meaningful preparation to conduct infringing activity an important element in

totality of circumstances

• “immediacy” and “reality” requirements must be met for justiciability

• “immediacy” requirement is satisfied because TubeMaster can “expeditiously solicit and fill orders for loading devices”

• “reality” requirement is satisfied because TubeMaster’s technology is “substantially fixed”

Cat Tech v. TubeMaster

Facts• Forest holds NDA for Lexapro®, used to treat depression; U.S. Pat. No. Re. 34,

712 covers pure forms of escitalopram, U.S. Pat. No. 6,916,941 covers crystalline particles of escitalopram oxate

• Ivax Pharm. filed ANDA application for ‘712 and ‘941 patents; Forest sued Ivax for infringement of ‘712 patent and won

• Caraco later filed ANDA for both patents; Forest sued for infringement of ‘712 patent; Caraco filed DJ of noninfringement of ‘941 patent; Forest unilaterally granted an irrevocable covenant-not-to-sue for ‘941 patent infringement

Procedure• E.D. Mich. dismissed Caraco’s DJ action because covenant-not-to-sue

eliminates controversy between parties

Holding• In the context of Hatch-Waxman framework, Art. III controversy exists even

when the patentee grants a covenant-not-to-sue because patentee’s actions effectively prevent FDA from approving ANDA

Caraco Pharm. Labs. v. Forest Labs.

Reasoning• Action is justiciable only if (1) plaintiff has standing; (2) issues are ripe; and

(3) case is not moot

• Caraco satisfies standing requirements because (1) “restraint on free exploitation of non-infringing goods” is injury-in-fact; (2) injury is traceable to patentee due to listing of patents in the Orange-book; and (3) injury-in-fact is redressible by a favorable judgment

• Issue is ripe because (1) Caraco submitted its generic drug product for FDA approval; and (2) withholding court consideration would have “immediate and substantial impact” on Caraco

• Covenant-not-to-sue does not render action moot because Caraco can trigger exclusivity period only by court judgment

Dissent (Friedman, J.)• First ANDA filers may delay other generic drug manufacturers is speculative

• Congress may amend the statute so as not to defeat the purpose of legislation

Caraco Pharm. Labs. v. Forest Labs.

Facts• Mosaid owns several DRAM patents; Mosaid sent warning letter and follow-up

letters to DRAM manufacturers (Samsung, Hynix, Infineon, Micron)• Mosaid sued Samsung, Hynix, and Infineon; later settled• Micron filed DJ in N.D. Cal. of noninfringement of 14 Mosaid patents; next

day, Mosaid filed infringement action in E.D. Tex.

Procedure• N.D. Cal. grants Mosaid’s MTD finding lack of subject matter jurisdiction

under reasonable apprehension of suit test• Alternatively, N.D. Cal. held that it would exercise discretion and decline to

hear the case because Micron’s DJ action is “tenuous at best” and E.D. Tex. action is broader

Micron Tech. v. Mosaid Techs.

Holding• Issuance of declaratory judgment is warranted when all the circumstances

(threatening letters, behavioral observations, public statements and annual reports) show a substantial controversy between parties of adverse legal interests of sufficient immediacy and reality. In cases with competing forum interests, “convenience factors” must be considered

Reasoning• Four-year elapse period between last letter and suit unavailing due to

negotiations with other DRAM manufacturers• Recent public statements and annual reports confirm intent to pursue

aggressive litigation strategy• Objectives of Declaratory Judgment Act would be met if case is heard by N.D.

Cal. than by forum of later-filed suit

Micron Tech. v. Mosaid Techs.

Adenta GmbH v. OrthoArm, Inc., 501 F.3d 1364 (Fed. Cir. 2007) (Fed. Cir. affirms grant of DJ)

Avocent Huntsville Corp. v. Aten Int’l Co., Ltd., 2008 U.S. App. LEXIS 25477 (Fed. Cir. Dec. 16, 2008) (Fed. Cir. affirms dismissal for lack of personal jurisdiction)

Benitec Austl., Ltd. v. Nucleonics, Inc., 495 F.3d 1340 (Fed. Cir. 2007) (Fed. Cir. affirms dismissal of DJ action)

Cat Tech LLC v. TubeMaster, Inc., 528 F.3d 871 (Fed. Cir. 2008) (Fed. Cir. affirms grant of DJ)

Caraco Pharm. Labs., Ltd. v. Forest Labs., Ltd., 527 F.3d 1278 (Fed. Cir. 2008) (Fed. Cir. reverses dismissal of DJ action)

Janssen Pharmaceutica, N.V. v. Apotex, Inc., 540 F.3d 1353 (Fed. Cir. 2008) (Fed. Cir. affirms dismissal of DJ action)

Micron Tech., Inc. v. Mosaid Techs. Inc., 518 F.3d 897 (Fed. Cir. 2008) (Fed. Cir. reverses dismissal of DJ action)

Prasco, LLC v. Medicis Pharm. Corp., 537 F.3d 1329 (Fed. Cir. 2008) (Fed. Cir. affirms dismissal of DJ action)

SanDisk Corp. v. STMicroelectonics, Inc., 480 F.3d 1372, 1380 (Fed. Cir. 2007) (Fed. Cir. vacates dismissal of DJ action)

Sony Elecs., Inc. v. Guardian Media Techs., Ltd., 497 F.3d 1271 (Fed. Cir. 2007) (Fed. Cir. reverses dismissal of action for lack of subject matter jurisdiction)

Teva Pharms. USA, Inc. v. Novartis Pharms. Corp., 482 F.3d 1330 (Fed. Cir. 2007) (Fed. Cir. reverses dismissal of DJ action)

Post-MedImmune DJ Actions - Summary

• Promise not to sue (SanDisk)• Covenant-not-to-sue

− Stipulation of validity (Janssen)− Unilateral grant (Caraco)− Appeal brief (Benitec)

• Infringement analysis (SanDisk)• Royalty demands• Barriers to regulatory approval• Effect of public statements and annual reports (Micron)• Elapse period

− Parties to litigation (Micron)− Different parties (Sony)

• Letter− Breach of K, no mention of infringement (Adenta)

Final Thoughts on DJ Actions

MedImmune Inc. v. Genentech Inc., 127 S. Ct. 764 (2007)800 Adept, Inc. v. Murex Sec., Ltd., 539 F.3d 1354 (Fed. Cir. 2008)Abbott Labs. v. Sandoz, Inc., 544 F.3d 1341 (Fed. Cir. 2008)Asyst Techs., Inc. v. Emtrak, Inc., 544 F.3d 1310 (Fed. Cir. 2008)Avocent Huntsville Corp. v. Aten Int’l Co., Ltd., 2008 U.S. App. LEXIS 25477

(Fed. Cir. Dec. 16, 2008)Burandt v. Dudas, 528 F.3d 1329 (Fed. Cir. 2008)Campbell Pet Co. v. Miale, 542 F.3d 879 (Fed. Cir. 2008)Carnegie Mellon Univ. v. Hoffmann La Roche Inc., 541 F.3d 1115 (Fed. Cir. 2008)Caraco Pharm. Labs., Ltd. v. Forest Labs., Ltd., 527 F.3d 1278 (Fed. Cir. 2008)Cat Tech LLC v. TubeMaster, Inc., 528 F.3d 871 (Fed. Cir. 2008)Cohesive Techs., Inc. v. Waters Corp., 543 F.3d 1351 (Fed. Cir. 2008)Cooper Techs. Co. v. Dudas, 536 F.3d 1330 (Fed. Cir. 2008)Egyptian Goddess v. Swisa Inc., 543 F.3d 665 (Fed. Cir. 2008) (en banc)Excelstor Tech., Inc. v. Papst Licensing GmbH & Co. KG, 541 F.3d 1373 (Fed.

Cir. 2008) In re Alonso, 2008 U.S. App. LEXIS 24320 (Fed. Cir. Oct. 30, 2008)In re Basell Poliolefine Italia S.P.A., 547 F.3d 1371 (Fed. Cir. 2008)In re Bilski, 545 F.3d 943 (Fed. Cir. 2008) (en banc)

List of Cases

In re Ciprofloxacin Hydrochloride Antitrust Litig., 544 F.3d 1323 (Fed. Cir. 2008)In re DBC, 545 F.3d 1373 (Fed. Cir. 2008)In re Omeprazole Pat. Litig. v. Apotex Corp., 536 F.3d 1361 (Fed. Cir. 2008)In re Swanson, 540 F.3d 1368 (Fed. Cir. 2008)In re TS Tech USA, 2008 U.S. App. LEXIS 26409 (Fed. Cir. Dec. 29, 2008)Jacobsen v. Katzer, 535 F.3d 1373 (Fed. Cir. 2008)Janssen Pharmaceutica, N.V. v. Apotex, Inc., 540 F.3d 1353 (Fed. Cir. 2008)Kyocera Wireless Corp. v. ITC, 545 F.3d 1340 (Fed. Cir. 2008)Lucent Techs., Inc. v. Gateway, Inc., 543 F.3d 710 (Fed. Cir. 2008)Mars, Inc. v. Coin Acceptors, Inc., 527 F.3d 1359 (Fed. Cir. 2008)Med. Solutions, Inc. v. C Change Surgical LLC, 541 F.3d 1136 (Fed. Cir. 2008)Micron Tech., Inc. v. Mosaid Techs. Inc., 518 F.3d 897 (Fed. Cir. 2008)Muniauction, Inc. v. Thomson Corp., 532 F.3d 1318 (Fed. Cir. 2008)Net Moneyin, Inc. v. Verisign, Inc., 545 F.3d 1359 (Fed. Cir. 2008)Nilssen v. Osram Sylvania, Inc., 528 F.3d 1352 (Fed. Cir. 2008) Prasco, LLC v. Medicis Pharm. Corp., 537 F.3d 1329 (Fed. Cir. 2008)Procter & Gamble Co. v. Kraft Foods Global, Inc., 549 F.3d 842 (Fed. Cir. 2008)Qualcomm Inc. v. Broadcom Corp., 548 F.3d 1004 (Fed. Cir. 2008)

List of Cases

Roche Palo Alto LLC v. Apotex, Inc., 531 F.3d 1372 (Fed. Cir. 2008)Star Scientific, Inc. v. R.J. Reynolds Tobacco Co., 537 F.3d 1357 (Fed. Cir. 2008)Takeda Chem. Indus. v. Mylan Labs., 2008 U.S. App. LEXIS 24743 (Fed.

Cir. Dec. 8, 2008)Welker Bearing Co. v. PHD, Inc., 2008 U.S. App. LEXIS 25069 (Fed. Cir. Dec.

15, 2008)

List of Cases

Dallas Office300 Crescent Court, Suite 1500

Dallas, TX 75201214.978.4000

Austin Office300 West 6th Street, Suite 1700

Austin, TX 78701512.692.8700

Marshall Office104 E. Houston, Suite 300

Marshall, TX 75670903.923.9000

www.mckoolsmith.com

Washington Office1700 K Street, N.W. Suite 740

Washington, DC 20006202.370.8300

New York Office399 Park Avenue, Suite 3200

New York, NY 10022212.402.9400

THANK YOU!