United States: Spotlight On Upcoming Oral Arguments – September 2019

Tuesday, September 3, 2019

Chrimar Systems, Inc. v. ALE USA Inc., No. 18-2420, Courtroom 402

Chrimar sued ALE alleging that ALE’s products infringed four of Chrimar’s patents.  The district court found that the patents were valid and awarded damages and ongoing royalties to Chrimar.  ALE appealed, but did not challenge validity or ongoing royalties.  During the pendency of the district court action, third parties petitioned for inter partes review of the four patents asserted against Chrimar.  After the completion of briefing on appeal, but before the Federal Circuit issued its decision, the PTAB issued Final Written Decisions finding that all of the challenged claims were invalid.  Chrimar has appealed each of the Final Written Decisions and those appeals are currently pending before the Federal Circuit.  The Federal Circuit subsequently issued its opinion vacating the district court’s claim construction with respect to one of the four asserted patents (U.S. Patent No. 8,155,012 (“the ’012 patent”)) and remanded for further proceedings. 

Following the Federal Circuit’s remand, Chrimar issued a covenant not to sue to ALE and moved to voluntarily dismiss its claim for infringement of the ’012 patent.  Meanwhile, in light of the PTAB’s Final Written Decisions, ALE filed a motion to sever and stay ongoing royalties or to stay the entire case pending the result of Chrimar’s appeal.  The district court granted Chrimar’s motion to dismiss and denied ALE’s motion to stay as moot. 

On appeal, ALE argues that it was an abuse of discretion not to grant ALE’s motion to stay the case pending the outcome of Chrimar’s appeal.  ALE further argues that it was an abuse of discretion not to stay ongoing royalties because it should not have to pay royalties on invalid patents.  Chrimar argues that the mandate rule forecloses the relief that ALE seeks.  The mandate rule provides that all issues within the scope of the appealed judgment are foreclosed from further adjudication unless remanded by the Federal Circuit.  Chrimar argues that because ALE chose not to appeal validity or ongoing royalties, those issues are precluded from further adjudication. 

Fitbit, Inc. v. Valencell, Inc., No. 19-1048, Courtroom 203

This appeal arises from an IPR finding claims 1, 2, and 6-13 of U.S. Patent No. 8,923,941 (“the ’941 patent”) invalid.  Apple originally petitioned for inter partes review of claims 1-13 of the ’941 patent.  The PTAB instituted review of claims 1, 2, and 6-13.  Fitbit later filed a petition for inter partes review of only claims 1, 2, and 6-13 and a request for joinder.  The request was granted and Fitbit was joined as a party to the original inter partes review.  The Supreme Court then decided SAS Inst., Inc. v. Iancu, where it held that partial institution was impermissible. In response, the PTAB instituted review of claims 3-5 and allowed the parties to submit additional briefing. In the Final Written Decision, the Board ultimately found claims 3-5 were valid. Fitbit now appeals.

On appeal, Valencell argues that Fitbit waived any right to seek appellate review of claims 3-5 by failing to make any arguments with respect to those claims in its petition for inter partes review.  Fitbit argues that while its petition was limited to the claims 1, 2, and 6-13, its joinder motion expressly requested that the PTAB grant joinder with the Apple proceeding “in full.”  Thus, Fitbit argues that upon joinder it became a party to all of the challenges advanced by Apple and is entitled to challenge any aspect of the Final Written Decision that it is dissatisfied with.

Keith Manufacturing Co. v. Butterfield, No. 19-1136, Courtroom 402

Larry Butterfield appeals from a district court’s denial of his motion for attorney’s fees.  The question presented to the Court is whether a stipulated dismissal with prejudice constitutes a “judgment” under Federal Rule of Civil Procedure 54(a), allowing the defendant to move for an award of attorney’s fees.

While an employee of Keith Manufacturing, Mr. Butterfield filed for a patent. A dispute arose and Mr. Butterfield left Keith Manufacturing. Later, Mr. Butterfield’s patent application was granted, and Mr. Butterfield threatened Keith Manufacturing with an infringement action. Keith Manufacturing responded by filing an action seeking declaratory judgment of noninfringement and invalidity and a claim for correction of inventorship under federal law and a breach of contract claim under state law. Mr. Butterfield filed a motion to dismiss the complaint with a covenant not to sue Keith Manufacturing for patent infringement. The court dismissed the claims for declaratory relief of noninfringement and invalidity, but not the claims for correction of inventorship or breach of contract. Several months later, the parties agreed to a stipulated dismissal with prejudice under Federal Rule of Civil Procedure 41(a)(1)(A)(ii).  After dismissal, Mr. Butterfield moved for an award of attorney’s fees pursuant to Federal Rule of Civil Procedure 54(d).  The district court denied the motion holding that a voluntary dismissal by stipulation does not constitute a “judgment” within the meaning of Federal Rule of Civil Procedure 54(a) nor was Mr. Butterfield the prevailing party under federal law, although he would be under state law.

On Appeal, Mr. Butterfield argues that a party does not need to obtain a favorable judgment on the merits in order to be a “prevailing party.”  Mr. Butterfield contends that the stipulated dismissal with prejudice materially altered the legal relationship between the parties, and therefore, should be viewed as a judgment for the purposes of Federal Rule of Civil Procedure 54(a).  Mr. Butterfield further argues that the district court incorrectly relied on distinguishable precedent in denying his motion.  Keith Manufacturing argues that Mr. Butterfield cannot receive attorney’s fees because the stipulated dismissal destroyed the adversity in the case, thereby leaving Mr. Butterfield without an order, decree, or judgement as required by Rule 54.  Further, Keith Manufacturing asserts that Mr. Butterfield is not a prevailing party under either federal or state law.

Wednesday, September 4, 2019

GlaxoSmithKline LLC v. Teva Pharmaceuticals USA, Inc., No. 18-1976, Courtroom 402

GSK appeals a District Court’s decision granting Teva’s renewed motion for judgement as a matter of law and setting aside the jury’s finding of induced infringement and $235 million damage award.  Teva filed an Abbreviated New Drug Application seeking approval to market a generic version of GSK’s drug Coreg®.  The FDA originally approved Teva’s generic carvedilol product under a skinny label, which did not include an indication for treatment of congestive heart failure.  Teva marketed its product, for example on its website and in its product reference guide, as a generic version of Coreg® and indicated that its product could be used just like Coreg®.  Teva later replaced the skinny label with the “full” label that was essentially identical to GSK’s Coreg® label.

GSK brought suit against Teva alleging infringement of U.S. Patent No. RE40,000 (“the ’000 patent”), which is directed to a method of using carvedilol to treat congestive heart failure.  GSK argued that the labels for Teva’s generic carvedilol product and Teva’s marketing for its generic product caused physicians to prescribe Teva’s generic carvedilol for the treatment of congestive heart failure, thereby inducing infringement of the ’000 patent.  The jury found that Teva willfully induced infringement.  However, the district court set aside the jury’s infringement finding, concluding that no reasonable jury could have found that Teva caused doctors, as a class, to infringe. 

GSK argues that the district court erred in setting aside the jury’s infringement finding because substantial evidence establishes that Teva induced doctors to infringe.  Specifically, GSK argues that Teva intended to capture the treatment of all heart failure patients by encouraging doctors to prescribe its generic product just like Coreg® in its marketing materials.  GSK further argues that Teva’s skinny label contained information about the treatment of congestive heart failure, which suggested that its product should be used to treat congestive heart failure.  Teva argues that GSK did not provide substantial evidence that physicians who prescribed carvedilol for use in an infringing manner were induced to do so by Teva. Specifically, Teva contends that no evidence establishes that Teva’s marketing had any impact on physicians’ prescribing practices.  Teva further contends that its skinny label carved out the congestive heart failure indication, and therefore, could not promote infringement.

Thursday, September 5, 2019

Columbia Sportswear v. Seirus Innovative Accessories, No. 18-1329, Courtroom 201

Columbia Sportswear raises the question of whether the change in venue law as a result of the Supreme Court’s TC Heartland decision excuses “a non-rule based venue waiver through litigation conduct.”  After more than two years of litigation in the District of Oregon, TC Heartland was decided, tightening the venue requirements in patent cases. Seirus moved for a venue transfer to the Southern District of California.  The District Court found that Seirus had waived its venue objection both under Rule 12(g)(2) and based on “Defendant’s vigorous litigation of this case.”  Nevertheless, fourteen days before trial, the district court granted Seirus’s motion explaining that “TC Heartland is an intervening change in the law excusing Defendant’s waiver of its venue objection.” 

Columbia argues that the Federal Circuit has made a clear distinction between “rule-based waiver,” which is excused by an intervening change of law, and “non-rule-based waiver,” which is not.  Therefore, Columbia argues that the district court erred in transferring the case to a different district in a different state fourteen days before trial.  Seirus argues that it objected to venue properly after the TC Heartland decision and the district court correctly found that venue is improper in Oregon and that the change in law excused any rule-based or non-rule-based waiver.

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