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The Existence of a Case or Controversy in a Patent Suit Must Be Evaluated on a Claim-by-Claim Basis

January 10, 2012

Decision icon Decision

Last Month at the Federal Circuit - February 2012

Judges: Newman, O'Malley, Reyna

[Appealed from: D. Neb., Chief Judge Bataillon]

In Streck, Inc. v. Research & Diagnostic Systems, Inc., No. 11-1044 (Fed. Cir. Jan. 10, 2012), the Federal Circuit found that the district court did not err in limiting the invalidity counterclaims of Research & Diagnostic Systems, Inc. and Techne Corporation (collectively “R&D”) to claims that had been asserted by plaintiff Streck, Inc. (“Streck”). In addition, the Court affirmed the district court’s determination that the patents-in-suit satisfy the written description and enablement requirements. The Court also determined that a priority challenge raised by R&D was without merit and that a permanent injunction issued by the district court was not overly broad.

Streck asserted U.S. Patent Nos. 6,200,500; 6,221,668 (“the ’668 patent”); and 6,399,388 against R&D. The asserted patents relate to controls for use with hematology analyzers, which are used by clinical laboratories to measure various components of blood. In particular, the asserted patents relate to hematology control products, which can be used to measure reticulocytes and white blood cells simultaneously in the same blood sample.

The parties agreed that claim 1 of the ’668 patent was representative for appeal. Claim 1 recites “[a] hematology control composition comprising: a) a stabilized reticulocyte component; and b) a fixed and stabilized white blood cell component capable of exhibiting a five-part differential.” The district court construed the patents-in-suit to encompass an integrated reticulocyte control using either reticulocytes or reticulocyte analogs.

At the district court, the parties agreed to be bound by the Patent Local Rules of the United States District Court for the Northern District of California. Those Rules provide that the parties shall serve “Disclosure[s] of Asserted Claims and Preliminary Infringement Contentions” as well as “Invalidity Contentions” within specified times. Accordingly, Streck submitted its “Disclosure of Asserted Claims and Preliminary Infringement Contentions,” which identified a limited number of asserted claims, and R&D submitted its “Preliminary Invalidity Disclosures” related to each of the asserted claims. Subsequently, and over a year after the date specified by the agreed-upon Patent Local Rules, R&D amended its invalidity contentions to assert that all but one claim of the patents-in-suit were invalid for failure to satisfy the enablement and written description requirements.

Approximately two months after Streck filed its first patent application relevant to this case, R&D filed its own application related to reticulocyte controls. In 2003, after some of Streck’s patents had issued, R&D copied claims of Streck’s patents and asked the PTO to declare an interference to determine priority of invention. The PTO decided the priority question in favor of R&D. The PTO’s decision was reversed by the same district court under 35 U.S.C. § 146, and the § 146 decision was affirmed by the Federal Circuit.

After the district court issued a claim construction order, the parties filed cross-motions for SJ related to the validity of the claims based on written description, and the court granted Streck’s motion, finding that the asserted patents adequately described the invention as claimed. Further, at trial, both parties moved for JMOL on the issue of enablement, and before submitting the enablement question to the jury, the district court granted JMOL to Streck, finding that the asserted patents were enabled.

On appeal, the Federal Circuit agreed that the district court did not err in limiting R&D’s invalidity counterclaims to the claims that had been asserted by Streck. The Court noted that it is well established in patent cases that the existence of a “case or controversy must be evaluated on a claim-by-claim basis.” Slip op. at 18 (quoting Jevis B. Webb Co. v. S. Sys., Inc., 742 F.2d 1388, 1399 (Fed. Cir. 1984)). The Court explained that before the Supreme Court’s decision in MedImmune, Inc. v. Genentech, Inc., 549 U.S. 118 (2007), a two-part test was applied to determine whether an actual controversy existed in a DJ action. Under that test, a plaintiff had to show an explicit action that creates a reasonable apprehension of suit and present activity by the DJ plaintiff that could constitute infringement. However, after MedImmune, courts must look at all the circumstances to determine whether a DJ plaintiff has shown a case or controversy.

The Federal Circuit then explained that, after MedImmune, at least one district court has found that it lacked DJ jurisdiction over patent claims that were initially asserted in a broad complaint and subsequently not included in the narrower scope of claims alleged to be infringed. Although that case was not binding on the Federal Circuit, the Court agreed with the analysis, stating that a counterclaimant must show a continuing case or controversy with respect to withdrawn or otherwise unasserted counterclaims.

Citing Scanner Technologies Corp. v. ICOS Visions Systems Corp., 528 F.3d 1365 (Fed. Cir. 2008), R&D argued that a patentee could not limit the scope of a counterclaim by withdrawing some of the asserted claims of the patents-in-suit. Distinguishing this case from Scanner Technologies, the Court disagreed. Specifically, the Court noted that in Scanner Technologies, the parties stipulated that the district court need only analyze a representative claim to decide infringement, but the patentee never affirmatively disclaimed its allegations of infringement as to other claims. By contrast, in this case, both parties were on notice from the start of the litigation that the scope of claims at issue was only a subset of the full patents-in-suit.

The Federal Circuit also agreed with the district court’s determination that the patents-in-suit satisfied the written description requirement as a matter of law. The Court explained that the pivotal issue in this case was whether the asserted patents provided adequate written description for controls using either true reticulocytes or reticulocyte analogs. According to R&D, the asserted patents failed to demonstrate that the inventor possessed and invented controls using true reticulocytes.

In so holding, the Court pointed to testimony by the inventor, Dr. Wayne Ryan, which, contrary to R&D’s assertion, identified language in the asserted patents related to true reticulocytes. Furthermore, the Court noted that the fact that the inventor chose to reduce his invention to practice using a reticulocyte analog rather than true reticulocytes is not relevant to the written description inquiry. In addition, the Court referred to the specifications, which refer to several types of true reticulocytes. Finally, the Court disagreed with R&D’s assertion that the inventor had testified that true reticulocytes were not part of his invention. Rather, the Court noted that Dr. Ryan’s testimony, to the extent he had testified about the difficulty of using true reticulocytes, related to the commercial practicalities of using true reticulocytes, not the feasibility of true reticulocytes in a control.

As to enablement, R&D argued that, although the patents-in-suit enabled reticulocyte analogs in an integrated control, they did not enable true reticulocytes. Specifically, R&D argued that the district court failed to consider whether the asserted patents enabled novel aspects of the invention and relied on prior art to fill in missing disclosures as to the novel aspects of using true reticulocyte controls.

R&D relied on Automotive Technologies International, Inc. v. BMW of North America, Inc., 501 F.3d 1274 (Fed. Cir. 2007), for the proposition that when a patentee broadly claims two distinct species, it must enable both. The Federal Circuit explained that Automotive Technologies involved a side-impact crash sensor for automobile airbags, and the claims were construed to include both mechanical and electronic side-impact sensors. The specification at issue in Automotive Technologies, however, failed to teach a person of skill in the art to make an electronic sensor without undue experimentation. The Court also explained that knowledge of one skilled in the art could not supply the missing information because the specification, not the knowledge of those skilled in the art, must supply novel aspects of the invention.

In contrast to Automotive Technologies, where the electronic sensors differed in structure and operation from mechanical sensors, the Federal Circuit in this case found unrebutted evidence that true reticulocytes and reticulocyte analogs work the same way in a hematology control. Further, R&D failed to produce evidence to demonstrate that undue experimentation would be required to create a true reticulocyte control.

The Court further agreed that the district court had correctly awarded priority to Streck and had not issued an injunction that was overly broad. As to the priority challenge, the Court explained that its prior decision in a related appeal was controlling and rendered R&D’s priority challenges moot. And, as to the injunction, R&D argued that the injunction prohibited it from infringing the asserted claims until the expiration of the last to expire patents-in-suit, but should be specifically limited to products-in-suit and products that are not colorably different. The Court disagreed, noting that the injunction referred to specific products at issue in this case. The Court therefore upheld the district court’s injunction.

Summary authored by Matthew R. Van Eman, M.D., Esq.