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Certificate of Correction Held Invalid Where the Proposed Correction from “Osmolarity” to “Osmolality” Was Not Clearly Evident to One Skilled in the Art

06-1307
April 03, 2007

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Last Month at the Federal Circuit - May 2007

Judges: Schall, Gajarsa (author), Prost

[Appealed from: N.D. Ala., Judge Hopkins]

In Central Admixture Pharmacy Services, Inc. v. Advanced Cardiac Solutions, P.C., No. 06-1307 (Fed. Cir. Apr. 3, 2007), the Federal Circuit vacated the district court’s finding of infringement under an invalid certificate of correction, and remanded the case for a determination of infringement under the patent’s original, uncorrected terms. The Federal Circuit, however, affirmed the district court’s holdings that the plaintiff had standing to bring the suit, that the patent is not invalid, that the plaintiff did not commit false marking or advertisement, and that the accused infringers could not amend their pleadings to allege patent misuse or to adequately plead inequitable conduct.

The patent at issue in this case, U.S. Patent No. 4,988,515 (“the ’515 patent”), involves a chemical solution used during heart surgery that nourishes heart tissue even without a continuous blood supply. The claims of the ’515 patent recite a solution having an “osmolarity . . . of between about 400-500 mOsmol.” Because the research leading to the ’515 patent was conducted using a grant awarded by the National Institute of Health (“NIH”), the government has certain rights in the ’515 patent under the Bayh-Dole Act, including the right to a royalty-free, nonexclusive license. When the designated assignee, the University of California, waived its rights in the ’515 patent application, the inventor requested that NIH also waive its rights in the application and allow the inventor to pursue the application in his individual capacity. NIH agreed upon the condition that the inventor execute a nonexclusive license to allow the U.S. government to use the invention. The inventor never executed this license. When the ’515 patent was granted, the inventor exclusively licensed the ’515 patent to Central Admixture Pharmacy Services, Inc. (“CAPS”).

On December 15, 1999, CAPS applied for a certificate of correction to change the term “osmolarity” to “osmolality.” Osmolarity refers to the amount of solute per liter of total solution and has units of mOsmol/L, while osmolality refers to the amount of solute per kilogram of solvent with units of mOsmol/kg. Because the term in the ’515 patent claims lacks a denominator, both osmolarity and osmolality would technically be a correct unit of measurement in the claims. On January 30, 2001, after CAPS initiated the current suit, the PTO granted a certificate of correction to change “osmolarity” to “osmolality” in the claims of the ’515 patent. This correction resulted in the claimed concentration range shifting slightly downward by about 1-2%. All of the allegedly infringing products have concentrations near the low end of the range.

On August 31, 2000, CAPS filed suit against Advanced Cardiac Solutions, P.C. and Charles Wall (collectively “ACS”) for patent infringement. The inventor later joined as a plaintiff. The district court granted SJ that disposed of most of the issues in the case. As part of its holding, the district court found that CAPS had standing to bring this suit, notwithstanding the inventor’s failure to execute a license to NIH. The district court also upheld the validity of the certificate of correction, and based on the claims as corrected, it granted SJ of infringement and willfulness. The district court also held that the ’515 patent was not invalid and that CAPS had not committed false marking or false advertising. Finally, the district court dismissed an inequitable conduct defense for failing to provide the requisite specificity and refused to allow ACS to amend its pleadings.

On appeal, the Federal Circuit first held that CAPS had standing to assert the ’515 patent, despite the inventor’s failure to execute a nonexclusive license to the U.S. government as required by NIH. According to the Federal Circuit, while the Bayh-Dole Act gives the government the discretion to take title in the patent for the inventor’s failure to comply with the Act’s provisions, it did not operate to automatically void title in the patent to the patentee. In this case, the government had exercised its discretion not to void title in the ’515 patent, and the alleged infringer had no basis to challenge this discretion.

The Federal Circuit then reversed the holding by the district court that the patentee had validly obtained the certificate of correction to change the term “osmolarity” to “osmolality” within the claims. To invalidate a certificate of correction requires showing the corrected claims are broader than the original claims, and the presence of a clerical error or how to correct that error is not clearly evident to one of skill in the art. According to the Federal Circuit, the claims were broadened by the certificate of correction as the corrected claims covered less-concentrated solutions. The Federal Circuit also found that this correction would not have been clearly evident to one having skill in the art. The term “osmolarity” is spelled correctly and reads logically in the context of the ’515 patent claims. Further, the claimed range is generally effective for the stated purpose; in fact, the difference in this case between “osmolarity” and “osmolality” is slight. Accordingly, because the claims mean precisely what they say, correcting “osmolarity” to “osmolality” would not have been clearly evident to one skilled in the art, resulting in an invalid certificate of correction.

After finding the certificate of correction invalid, the Federal Circuit construed the ’515 patent claims using the original term “osmolarity.” Because the asserted claim recited an “osmolarity . . . of between about 400-500 mOsmol,” the Federal Circuit looked in the specification of the ’515 patent to determine the effective range of the solution. In the specification, the inventor disclosed that the solution becomes effective at a concentration of 385 mOsmol. Accordingly, the Federal Circuit held that this disclosure operated to extend the claimed range of osmolality down to 385 mOsmol/L.

The Federal Circuit then affirmed the district court’s decision to dismiss ACS’s claim of inequitable conduct for failing to plead this conduct with particularity. The Federal Circuit held that inequitable conduct, while broader than fraud, must be pled with particularity. In this case, ACS failed to plead with the requisite particularity because it did not identify the relevant and undisclosed prior art known by the patentee, and it similarly failed to identify the measurements and tests that the patentee had allegedly manipulated and how those manipulations would have misled the PTO.

Applying the law of the Eleventh Circuit, the Federal Circuit also found that the district court did not abuse its discretion in refusing to allow ACS to amend this element of its pleadings. According to the district court’s findings, ACS sought to amend its pleadings over three years after the close of discovery. Further, this amendment would require the parties to conduct new discovery, including new expert discovery, essentially reopening a case that had been pending for over four years. Because of the district court’s broad powers to conduct and shape discovery, the Federal Circuit found that the district court did not abuse its discretion in refusing to grant ACS leave to amend. The Federal Circuit also affirmed the district court’s finding of no invalidity of the ’515 patent based on certain clinical trials allegedly performed by the inventor before the critical date of August 21, 1984. ACS based these allegations on an article coauthored by the inventor describing a study of the patented solution conducted between May 1984 and April 1985. Although part of this period occurred before the critical date, the study does not actually describe the type of activity that occurred before the critical date. Without this information, the Federal Circuit held that ACS could not prove by clear and convincing evidence that the clinical trial qualified as prior art. Finally, the Federal Circuit summarily affirmed the district court’s findings of no false marking and no false advertisement without discussion.