High Court's End of Term Actions on IP Cert Petitions: Akamai CVSG, Pay-for-Delay GVR

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In its last set of orders in the current term related to petitions for writ of certiorari on intellectual property issues, the U.S. Supreme Court called for the views of the solicitor general in one case, granted and remanded two petitions in light of its decision in FTC v. Actavis, and denied review of three other petitions, including a Hatch-Waxman issue that has divided the U.S. Court of Appeals for the Federal Circuit.

CVSG in Akamai v. Limelight

The court invited the Office of the U.S. Solicitor General to file a brief reflecting the government's views on how infringement can be found when more than one party performs steps of a patented method or supplies components of a patented system (Limelight Networks Inc. v. Akamai Technologies Inc., U.S., No. 12-786, gov't brief invited 6/24/13; Akamai Technologies Inc. v. Limelight Networks Inc., U.S., No. 12-960, gov't brief invited 6/24/13).

The Federal Circuit was divided 6-5 on this case on Aug. 31. Akamai Technologies Inc. v. Limelight Networks Inc., 692 F.3d 1301, 104 U.S.P.Q.2d 1799 (Fed. Cir. 2012) (en banc) (173 PTD, 9/7/12).

The court overturned precedent in holding that a patent owner claiming induced infringement--under 35 U.S.C. §271(b)--no longer has to show that a single induced entity is liable for direct infringement--under 35 U.S.C. §271(a). Limelight Networks Inc. asked in its petition for writ of certiorari whether that ruling was in error.

The appeals court did not modify its jurisprudence, developed over the last six years, on joint infringement--direct infringement with divided responsibility--under Section 271(a): The alleged infringer must have “direction or control” over the other party performing the additional steps of a method claim.

Akamai Technologies Inc., the exclusive licensee of three patents (6,108,703; 6,553,413; and 7,103,645) on optimizing the transfer of the contents of a web page from a server to a user's display, accused Limelight and its customers of joint infringement, with Limelight providing the software and instructing its customers on web page preparation. Akamai lost in lower court on that claim.

It therefore filed its own cert petition, asking the question: “May a party be liable for infringement under either 35 U.S.C. §271(a) or Section 271(b) where two or more entities join together to perform all of the steps of a process claim?”

The justices--with Justice Samuel A. Alito not participating--consolidated the two petitions for purposes of the CVSG.

A similar question--divided infringement of a patented system when more than one party supplies components of the alleged infringing system--is not directly presented by the facts of the case but could well be affected if the high court grants review.

The issues invoked by the petitions arise in the use of several technologies. But the most prevalent circumstances to date have been when the invention covers a distributed network computing system or an internet-based service requiring end-user interaction with a host computer application.

A second dispute was consolidated with Akamai at the Federal Circuit and cert petitions were filed in that case as well. However, the parties have since settled. Epic Systems Corp. v. McKesson Technologies Inc., Nos. 12-800, 12-970 (U.S., dismissed March 11, 2013) (49 PTD, 3/13/13).

K-Dur Pay-for-Delay GVR Was Expected

The grant-vacate-remand decision on two petitions in the same “pay-for-delay” drug settlement case was expected (Merck & Co. v. Louisiana Wholesale Drug Co. , U.S., No. 12-245, review granted, case remanded 6/24/13; Upsher-Smith Laboratories Inc. v. Louisiana Wholesale Drug Co., No. 12-265, review granted, case remanded 6/24/13).

In the June 17 Actavis opinion, the high court held that these reverse payment deals, in which a patent-owning brand name drug manufacturer pays a generic maker to cease its patent challenge in court, may violate antitrust laws regardless of whether the agreement falls within the scope of the patent. Federal Trade Commission v. Actavis Inc.,No. 12-416 (U.S. June 17, 2013) (117 PTD, 6/18/13).

The court had granted cert in Actavis based on a conflict with a decision in the U.S. Court of Appeals for the Third Circuit, In re K-Dur Antitrust Litigation, 686 F.3d 197, 103 U.S.P.Q.2d 1497 (3d Cir. 2012) (137 PTD, 7/18/12).

The Third Circuit held that the reverse payment deals are presumptively anticompetitive and unlawful. The settlement agreement at issue there involved the patented blood pressure drug K-Dur 20 (potassium chloride) and was between branded drug company Merck & Co. and generic drug company Upsher-Smith Laboratories Inc. Each company filed a cert petition (170 PTD, 9/4/12).

The court's June 24 orders granted each petition, vacated the appeals court's decision, and remanded the case for reconsideration in light of Actavis.

No Review of Hatch-Waxman Safe Harbor

The court denied review for the second time this year in a case questioning the extent of the Hatch-Waxman Act's safe harbor provision on patent infringement (Momenta Pharmaceuticals Inc. v. Amphastar Pharmaceuticals Inc., U.S., No. 12-1033, review denied 6/24/2013).

The safe harbor applies to non-sales activities of a generic drug maker. There is no debate that 35 U.S.C. §271(e)(1) extends the safe harbor to activities required by the Food and Drug Administration before it approves marketing of the generic drug. However, two decisions by the U.S. Court of Appeals for the Federal Circuit were arguably in conflict about extending safe harbor protection to other activities, particularly to those that might occur after FDA approval.

After receiving advice from the solicitor general, the high court denied a cert petition appealing the decision that limited safe harbor protection to the pre-approval stage. GlaxoSmithKline v. Classen Immunotherapies Inc., No. 11-1078 (U.S., review denied Jan. 14, 2013)(10 PTD, 1/15/13).

In the instant case, on the other hand, the appeals court held that the generic drug maker may, post-approval, continue to infringe a follow-on method patent so long as performing the method satisfies FDA requirements. Momenta Pharmaceuticals Inc. v. Amphastar Pharmaceuticals Inc., 686 F.3d 1348, 103 U.S.P.Q.2d 1800 (Fed. Cir. 2012)(151 PTD, 8/7/12).

The solicitor general's prior advice, though, said that “there is no longer any practical need for this Court's intervention in light of the Federal Circuit's subsequent decision in Momenta.”

The drug underlying the controversy in the instant case was the blood-thinning injectable Lovenox (enoxaparin sodium injection). Momenta Pharmaceuticals Inc.'s patent (U.S. Patent No. 7,575,886) at issue here was not on the drug itself, but rather on methods of analyzing and monitoring particular therapeutic heparin products such as Lovenox.

The Federal Circuit's ruling was a win for generic drug maker Amphastar Pharmaceuticals Inc.

Review of Two Other Patent Cases Denied

The high court also denied review in two other patent cases.

• ClearPlay Inc. v. Nissim Corp. ( U.S., No. 12-1365, review denied 6/24/13), appealing the Eleventh Circuit's affirmation of summary judgment in favor of a patent licensee. ClearPlay Inc. v. Nissim Corp., 496 F. App'x 963 (11th Cir. Nov. 14, 2012). In a related proceeding, the Federal Circuit ruled that a federal court cannot exercise jurisdiction over claims even if there is an underlying patent dispute, if resolution of the claims does not require resolution of the patent issue. ClearPlay Inc. v. Abecassis, 602 F.3d 1364, 94 U.S.P.Q.2d 1763 (Fed. Cir. 2010)(77 PTD, 4/23/10).

The petition was filed May 15 (103 PTD, 5/29/13).

• Mirror Worlds L.L.C. v. Apple Inc. ( U.S., No. 12-1158, review denied 6/24/13), appealing the Federal Circuit's rejection of a patent infringement claim under the doctrine of equivalents. Mirror Worlds L.L.C. v. Apple Inc., 692 F.3d 1351, 104 U.S.P.Q.2d 1489 (Fed. Cir. 2012). The petition asked:  

(1) Can an offer for sale or sale of a product that embodies a patented invention directly infringe a method claim under 35 U.S.C. §271(a)? (2) Has the … Federal Circuit created an improper de facto rule precluding the use of circumstantial evidence to establish that one or more steps in a patented method have been performed for the purpose of demonstrating infringement?  




The petition was filed March 21 (70 PTD, 4/11/13).