We will be discussing two recent Federal Circuit cases during our weekly SoCal IP Institute meeting on Monday, January 16, 2012. Brief synopses are presented below.
MarcTec, LLC v. Johnson & Johnson and Cordis Corp, Case No. 2010-1285 (Fed. Cir. Jan. 3, 2012) (attached). MarTec sued Johnson & Johnson and Cordis Corp. alleging infringement of two patents. After claim construction, the Southern District of Illinois granted summary judgment of noninfringement. J&J and Cordis then moved for the court to declare the case exceptional and to award reasonable attorney’s fees and expert witness fees. The motion was granted. On appeal of the decision that the case was exceptional, the Federal Circuit affirmed.
The independent claims of both patents provide for a “heat bondable material” that is “bonded” to a surgical device or implant. During prosecution, the MarcTec patents were distinguished from a prior art reference on the basis that it bonds with the application of heat and because it, unlike the cited reference, did not include “intraluminal grafts” (stents). The district court found that J&J and Cordis manufacture and sell stents that are of the type that bond at room temperature, as described in the disclaimed prior art reference. On that basis, summary judgment of noninfringement was granted.
After this motion was granted, J&J and Cordis moved for the court to declare the case exceptional and to grant attorney’s fees. J&J asserted that MarcTec 1) misrepresented claim construction law, 2) mischaracterized the district court’s claim construction order and 3) offered unreliable scientific evidence. This district court agreed. On appeal, MarcTec argued that the wrong standard was applied by the district court. The Federal Circuit found that the correct standard was applied, namely, “subjective bad faith and objectively baseless” claims and that MarcTec’s claims were pursued in bad faith while being objectively baseless. This alone was sufficient to affirm the award of attorney’s fees. In addition, the Federal Circuit found that there was litigation misconduct in the form of misstating the law of claim construction to the district court and reliance up on scientific evidence that was lacking in any reliability. As a result, the Federal Circuit affirmed the grant of expert witness fees and attorney’s fees. The reasonableness of those fees was not challenged on appeal.
Celsis In Vitro, Inc. v. CellzDirect, Inc. et al., Case No. 2010-1547 (Fed. Cir. Jan. 9, 2012 (attached). The Northern District of Illinois granted Celsis’ motion for a preliminary injunction against CellzDirect. CellzDirect appealed the grant and requested a stay of the preliminary injunction pending the appeal. This request was denied and the Federal Circuit affirmed the grant of the preliminary injunction.
Celsis’ patent covers a method for preserving liver cells through cryopreservation (freezing). In general, liver cells are fragile and are typically irreparably damaged when frozen. The Celsis patent describes freezing the cells multiple times as increasing viability of the cells.
In determining whether to grant a preliminary injunction, the court (and the Federal Circuit in reviewing) considered four factors: (1) likelihood of success on the merits, (2) irreparable harm, (3) balance of hardships, and (4) public interest. As to likelihood of success on the merits, the Federal Circuit affirmed that the patent was not obvious in view of art previously identified by CellzDirect. Some discussion was made of a de Sousa reference that, arguably, showed viability after a single round of freezing of the cells. However, the court accepted the testimony of Celsis’ expert, Dr. Strom, which suggested that multiple rounds of freezing would not be expected to generate better results than a single round. He argued that one would expect a runner of multiple marathons in rapid sequence to perform increasingly poorly in each marathon. Therefore, it would stand to reason that multiple rounds of freezing in succession would decrease viability, not increase it.
As to irreparable harm, the district court and Federal Circuit affirmed that the possibility to calculate a damages award, if pressed, id not preclude a finding of irreparable harm. As to balance of the hardships, the district court and Federal Circuit found that it clearly tipped in favor of Celsis, as holder of the patent, and that any harm to CellzDirect could be protected by a bond. Finally, public interest is generally presumed in patent cases, because the public would favor enforcement of valid patent rights. Accordingly, the preliminary injunction was affirmed.
In dissent, Judge Gajarsa argued that repetition of a known-to-be effective step shown in de Sousa is no invention at all. As a result, he argues that de Sousa renders the Celsis patent obvious. He argued that the flexible approach of KSR requires such an obviousness finding. In addition, he argued that the burden was not adequately shifted in view of the prior art presented by CellzDirect. In particular, he stated that CellzDirect need only present proof that the patent was vulnerable, not meet the clear and convincing burden of invalidity. In view of these issues, he would have found that the preliminary injunction was improper because there was no likelihood of success on the merits.
All are invited to join us in our discussion during the SoCal IP Institute meeting on Monday, January 16, 2012 at Noon in our Westlake Village office. This activity is approved for 1 hour of MCLE credit. If you will be joining us, please RSVP to Amanda Jones by 9 am Monday morning.
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