patent law

Issues

Alice Corporation was granted patents on several processes and systems relating to the use of computer software to facilitate securities trading and reduce risks of parties not fulfilling contractual obligations. CLS Bank developed software for its own use in similar transactions. CLS brought an action for declaratory judgment, asserting that Alice’s patents were subject-matter ineligible because they did no more than recite abstract ideas regarding fundamental economic concepts. Alice counterclaimed, asserting that CLS infringed Alice’s patents. The district court found the Alice patents invalid, but the Federal Circuit reversed, holding that Alice’s patents fell within the “abstract ideas” exception to the generally broad policy of patent eligibility. Alice argues that the abstract ideas exception is meant to be read narrowly and apply to fundamental truths such as facts of nature. CLS counters that Alice’s patents merely cover fundamental economic concepts and that these should fall within the exception. At issue is a basic question about the scope of patent-eligible subject matter, and the breadth of the abstract ideas exception. The Court’s decision could fundamentally alter the scope of what is patentable.  The decision may encourage innovation in the software and other industries by rewarding those who expend resources to bring about a useful product to the public.

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This case asks the Supreme Court to clarify whether Amgen’s disclosure of common techniques – a trial-and-error procedure and amino acid substitution technique – is sufficient to satisfy the enablement requirement for Amgen’s patent claim over all antibodies that bind to PSK9 protein and block PSK9 protein’s ability to bind to LDL receptors. Amgen argues that the focus of the enablement standard should be on whether the disclosure leads people to “make and use” the claimed invention and that common techniques do not amount to undue experimentation. Sanofi counters that the disclosures should be specific for broad patent claims and that Amgen’s trial-and-error techniques amount to undue experimentation. This case has significant implications on future innovation in the pharmaceutical industry and the patent law system.

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The Sherman Antitrust Act forbids product-tying arrangements by companies that possess substantial market power in the tying-product's market. While the party alleging the violation must generally prove such market power exists, market power is assumed when a company holds a valid patent on the tying product. Illinois Tool Works ("Illinois") makes the availability of licensing agreements for its patented products contingent on the exclusive use of other, unpatented products. It urges the Court to overturn the patent-based market-power presumption. Independent Ink, an Illinois licensee, claims that the tying arrangement improperly forces it to buy Illinois' ink, despite the availability of cheaper, effective substitutes, thereby stifling beneficial competition. The direct impact of the Court's decision, whether it preserves the status quo or changes its rule, making antitrust violations harder to prove, will be felt by sellers who tie patented products to unpatented ones, firms who buy products from such companies, and the consumers who ultimately purchase products from either company. Indirectly, the case may mark the Roberts Court's first foray into the doctrine of stare decisis, which provides insight into the current Court's view on when and how to defer to its past decisions. As a result, the effects of the decision may be felt in many areas of the Court's jurisprudence which don't deal with the antitrust law.

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Teleflex, Inc. sued KSR International Co. in the United States District Court for the Eastern District of Michigan for allegedly infringing upon KSR’s adjustable automotive pedal assembly patent. KSR argued that Teleflex’s patent was invalid for being obvious because it combined preexisting pedal technology and preexisting electronic control technology. The District Court agreed with KSR that Teleflex’s patent was invalid for being obvious and granted KSR’s motion for summary judgment. On appeal, the United States Court of Appeals for the Federal Circuit reversed, holding that the patent was not obvious because KSR failed to establish that some “‘suggestion, teaching, or motivation’ would have led a person of ordinary skill” in the field of automotive pedal technology “to combine the relevant prior art teachings” to create Teleflex’s device. The Supreme Court will either uphold or change the definition of non-obviousness used in the United States for the last twenty years. Broadening the definition of non-obviousness could invalidate patents for any number of devices that combine pre-existing elements and open everything from the pharmaceutical industry to the computer software industry to greater competition.

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Akamai Technologies, Inc. (“Akamai”) sued Limelight Networks, Inc. (“Limelight”) for allegedly infringing a patent for a method of delivering web content. Limelight had performed all but one step of the patented method, leaving its customers to perform the remaining step. The Federal Circuit held that Limelight’s conduct constituted infringement by inducement under 35 U.S.C. § 271(b). The Federal Circuit ruled that the combined conduct of multiple entities may constitute patent infringement where a party performs all but one step of a patented method and knowingly induces another party to perform the remaining step of the method. Akamai argues that the Federal Circuit’s new standard more comprehensively protects the rights of patent owners. However, Limelight counters that the standard too broadly expands the scope of patent infringement liability and could lead to more abusive patent litigation. Limelight argues that to be a violation of § 271(b), a single entity must directly infringe on a patent under § 271(a), and that no such violation is present here. On the other hand, Akamai argues that the Supreme Court should re-instate the jury’s verdict, which found that Limelight controlled a third party’s conduct sufficient to satisfy § 271(a). Additionally, Akamai argues that the Federal Circuit’s new rule is consistent with common law tort principles and with Supreme Court precedent.

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In the latest Supreme Court case on patent law, LG Electronics, Inc. (LGE) sued Quanta Computers, Inc. (Quanta) for patent infringement. A patent license agreement between LGE and Intel allowed Intel to use LGE's patents but required Intel to notify its customers, including Quanta, that its license did not extend to third-party purchasers' combinations of Intel and non-Intel components. LGE alleges that Quanta infringed LGE's patents by combining Intel and non-Intel components. LGE argued that Intel's sale to Quanta did not exhaust LGE's rights as a patent holder, allowing LGE to sue Quanta. Quanta, however, argued that Intel's authorized sale to Quanta exhausted LGE's patent rights. The Federal Circuit agreed with LGE, holding that the exhaustion doctrine did not apply because the notice provided by Intel to Quanta created a conditional sale, and that sales of patented devices do not exhaust a patent holder's methods claims. In deciding this case, the Supreme Court will determine whether a patent holder can sue customers who use patented components purchased from licensees. The outcome of this case will clarify the exhaustion doctrine generally and will help define the scope of patent holders' rights, including their ability to collect royalties from and sue downstream users of their patents.

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The Supreme Court will determine whether the government is a “person” for the purposes of post-issuance review proceedings under the Leahy-Smith America Invents Act (“AIA”). Return Mail, Inc. (“Return Mail”), the owner of a patent for processing undeliverable mail items, argues that Congress intended the AIA to incorporate a specific meaning of the term “person,” supported by statute and judicial precedent, that excluded the government, and would thus prohibit government agencies from initiating AIA review proceedings. The United States Postal Service (“Postal Service”) counters that the statutory context, as supported by historical evidence and statements made by the Supreme Court, reveals Congress’s intent to include government agencies in the term “person” for the purposes of the AIA. The United States Court of Appeals for the Federal Circuit ruled that the term “person” in the AIA did not exclude the government, and that the government could petition for patent review under the AIA. Return Mail is now appealing that decision in a case that will have implications for patent litigation, the estoppel doctrine, and executive agencies.

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This case presents the Supreme Court the opportunity to determine how to construe the Biologics Price Competition and Innovation Act (“BPCIA”). Specifically, this case focuses on the notice requirements of the BPCIA and asks whether notice of marketing a biosimilar must be provided 180 days after the approval of the biosimilar but before the marketing of the product. In addition, if the Court determines that notice is required after approval, but before marketing, the Court must decide what remedies are proper to correct the improper notice. Pointing to the BPCIA’s purpose, Sandoz Inc. argues that notice is only required 180 days before marketing; and, that injunctions are improper remedies to correct any potential notice-fault. In contrast, Amgen Inc. also points to the BPCIA’s purpose to argue that notice can only be effective if made after FDA approval; and, that the only way to provide a meaningful remedy would be to allow an injunction. Depending on the Court’s holding, this case could impact the balance between innovation and affordability in the biologics market.        

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