The following telephone arguments will be available to the public live. Access information will be available by 9 AM ET each day of argument at: http://www.cafc.uscourts.gov/public-access-arguments.
Tuesday, December 8, 2020
Vivint Inc. v. Alarm.com, Inc., No. 19-2438
Alarm.com filed for inter partes review ("IPR") to challenge two of Vivint's patents. The PTAB found that some of the challenged claims, but not all, were unpatentable. Both parties appealed to the Federal Circuit. The court affirmed-in-part and vacated-in-part the PTAB's decision and remanded the case for further proceedings pertaining to a particular claim construction. On remand, the Board found the remaining claims at issue unpatentable. Vivint appealed for a second time, but just six weeks after it filed its notice of appeal, the Federal Circuit issued its decision in Arthrex, Inc. v. Smith & Nephew, Inc., 941 F.3d 1320 (Fed. Cir. 2019). In Arthrex, the court held that administrative patent judges ("APJs") are "principal officers" under the Appointments Clause, meaning that they must be appointed by the President and confirmed by the Senate. After the Arthrex decision was issued, Vivint filed a motion to vacate and remand the PTAB's Final Written Decision in light of Arthrex, alleging for the first time that the three APJs that rendered the decision were appointed unconstitutionally. The motions judge denied Vivint's motion on the basis that Vivint forfeited the challenge by not having raised it during its first appeal. Vivint failed to ask for reconsideration of the motion judge's decision within 14 days as required by Federal Circuit Rule 27(j).
In now the merit stage of the second appeal, Vivint again raises an Appointments Clause challenge to the PTAB's decision. The USPTO and Alarm.com both argue that Vivint forfeited its Appointments Clause challenge when it did not raise it during the first appeal and forfeited it again when it did not seek reconsideration of the motion judge's order within 14 days as required by Federal Circuit rules. Vivint also failed to raise the issue during the IPR proceedings, which the USPTO argues further proves forfeiture since Vivint has not pled it has an exceptional case. Alarm.com also argues that the mandate rule—that issues actually decided on appeal, minus those reserved or remanded by the court, are foreclosed from further consideration—prevents Vivint from raising its Appointments Clause challenge because the first appeal decision explicitly reserved only one narrow claim construction issue for remand. Vivint argues it did not forfeit its Appointments Clause challenge for two reasons. First, Vivint argues that Arthrex constituted a significant change in the law that excuses any forfeiture. Vivint asserts that even though the Arthrex panel indicated that an Appointments Clause challenge is waivable, the Supreme Court case on which the opinion relies (Freytag v. Commissioner, 501 U.S. 868 (1991)) does not address intervening changes in the law, and it would be unfair to expect litigants to have anticipated that the Federal Circuit was going to hold the APJ appointment scheme unconstitutional. Alarm.com disagrees and argues that Arthrex did not constitute a change in the law given the state of the law pre-Arthrex and the amount of Appointment Clause scrutiny that existed at the time. Second, Vivint argues that raising an Appointments Clause challenge during the first appeal would have put its partial victory during the first round of IPR proceedings at risk. The USPTO asserts that permitting Vivint to raise the issue it withheld earlier as a strategic matter would undermine finality and judicial economy and encourage piecemeal adjudication. If the Federal Circuit is not willing to vacate the PTAB's decision now, Vivint argues in the alternative that the case should be held in abeyance pending Supreme Court review of the constitutionality of the APJ appointment scheme.
Wednesday, December 9, 2020
Amgen Inc. v. Sanofi, No. 20-1074
Amgen developed the cholesterol drug Repatha, and later obtained patents directed to PCSK9 antibodies that lower cholesterol by binding to LDL receptors The patents claimed a genus of PCSK9 antibodies and the specification disclosed amino acid sequences for 26 representative antibodies within that genus. Amgen sued Sanofi in the District of Delaware, alleging that Sanofi's drug Praluent infringed its patents. Sanofi stipulated to infringement but asserted that the patents were invalid for lack of written description and enablement and obviousness. After a jury trial, the court held that the patents were nonobvious and not invalid for lack of written description and enablement. On appeal, the Federal Circuit affirmed the district court's decision of nonobviousness but ordered a new trial on written description and enablement. At the second trial, the jury found for Amgen on both issues. The court upheld the jury's verdict that the patents satisfied the written description requirement but overturned the jury's verdict on enablement. During trial, the parties agreed that antibody arts were well-established as of the priority date, that techniques for making antibodies were well-developed and routine, and that a POSA would have been familiar with techniques disclosed in the patents. However, the district court sided with Sanofi on the remaining In re Wands factors regarding enablement in this case and held that the claim scope here was vast, the art was unpredictable, the patent specification here did not provide significant guidance or direction to make the particular claimed antibodies, and that substantial undue experimentation was needed to practice the particular claims. The court acknowledged conflicting testimony of the experts on many of these issues.
On appeal, Amgen claims that in addition to the 26 representative antibodies that the inventors characterized, its patents provide a "detailed roadmap" that would enable a POSA to make all other claimed antibodies. Amgen also argues that the district court's decision is contrary to Wands because the disclosures in Amgen's patents are more extensive than those found enabling in Wands, which is also an antibody case. Amgen notes that Sanofi has yet to identify an antibody that could not be produced easily using the patent specification, and argues that the jury was entitled to find this lack of clear and convincing evidence dispositive in the case. Amgen further argues that the evidence showed that the claims' scope here is narrow and a reasonable jury is not required to accept Sanofi's theory that applying every possible conservative substitution described in the specification yields millions of antibody candidates that need to be tested, because such substitutions do not destroy the antibody's binding to PCSK9. In Amgen's view, the jury could find that the genus here is around 400 antibodies. Sanofi argues that the district court's enablement ruling is correct and supported by the Federal Circuit's recent precedents finding nonenablement in similar circumstances. In Sanofi's view, millions of antibodies fall within the scope of Amgen's claims here and a POSA would have had to test every generated antibody to determine whether it satisfies the claims' functional limitation by binding to PCSK9 at the specified region and blocking binding of PCSK9 to LDL. Additionally, Sanofi argues, Amgen's claims are invalid because the written description fails to show that Amgen actually possessed the amount of structurally diverse antibodies it claimed, and the specification here does not disclose representative species or common structural features that would permit a POSA to recognize members of the particular genus. Sanofi argues that even though the evidence at trial was sufficient to establish invalidity, the district court improperly excluded further evidence of invalidity and improperly admitted Amgen's evidence. Therefore, Sanofi argues in the alternative that it is entitled to a new trial if the Federal Circuit reverses the district court's decision in Amgen's favor.
Thursday, December 10, 2020
MLC Intellectual Property LLC v. Micron Technology, No. 20-1413
In 2007, MLC's predecessor BTG International entered into parallel license negotiations with Micron, Hynix, Toshiba, and Samsung. The latter three agreed to lump-sum licenses; however, Micron refused. MLC sued Micron for patent infringement and prevailed on both infringement and validity. However, MLC was unable to properly present its damages case because the district court, ruling on Micron's pre-trial evidentiary and Daubert challenges, excluded evidence regarding the Hynix and Toshiba licensing negotiations and the opinions of MLC's damages experts based on that evidence. The district court excluded MLC's expert report because: (1) the evidence of how BTG approached licensing negotiations was inadmissible parol evidence; (2) the evidence did not support the royalty rate for Hynix and Toshiba licenses; (3) the disputed extrinsic evidence was not disclosed by MLC in its interrogatory responses or during the deposition of its 30(b)(6) witness; and (4) MLC failed to properly apportion Micron's revenue. The district court certified its pretrial evidentiary orders for interlocutory review.
MLC argues on interlocutory appeal that invoking the parol evidence rule was improper because its expert did not rely on extrinsic evidence to interpret the terms of the Hynix license agreement, but rather used express language in combination with evidence of BTG's routine negotiation conduct. Evidence of licensing conduct, MLC contends, is appropriate under the Georgia-Pacific test and should not be considered extrinsic. Micron counters that MLC's focus on the parol evidence rule mischaracterizes the district court's holding and the court properly performed its gatekeeping function in excluding MLC's misleading royalty rate opinions. MLC also argues on appeal that the district court abused its discretion in excluding the proposed royalty rate because any disagreements on the rate were factual disputes for the jury. Finally, MLC contends that it apportioned its damages correctly, using Federal Circuit guidance, down to a single component of the smallest saleable unit. Micron argues that MLC actually presented two damages theories, one with apportionment and one without, and that the exclusion of both should be affirmed because in any case, MLC did not apportion for noninfringing features of the accused product and MLC did not provide any evidence that its products are indeed single-component.
By requiring MLC to identify in interrogatory responses and corporate witness testimony the facts and documents MLC would rely on for damages, the district court, in MLC's view, imposed evidentiary disclosure requirements that go beyond those in the Federal Rules of Civil Procedure. MLC believes that it correctly produced all relevant documents during fact discovery and fully disclosed its damages theory during expert discovery, as is appropriate. On the other hand, Micron asserts that not only are MLC's expert's methodologies problematic, but the expert opinion exceeds MLC's discovery responses. Micron claims it repeatedly asked MLC to disclose its damages theories and associated evidence during fact discovery. According to Micron, MLC specifically denied any knowledge of relevant facts surrounding the Hynix and Toshiba licenses or whether a royalty rate could be derived from them, and instead purports to ambush Micron with its damages theories during expert discovery.
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