No Injury, No Appeal: Patent Owners Must Show Actual Injury for Article III Standing
In Dolby Laboratories Licensing Corporation V. Unified Patents, LLC, Appeal No. 23-2110, the Federal Circuit held that a patent owner lacks Article III standing to appeal an inter partes review decision on patentability when it cannot demonstrate concrete and actual injury as a result of the Patent Trial and Appeal Board’s ruling.
Unified Patents initiated an IPR challenging claims in Dolby’s patent and identified itself as the sole real party in interest (RPI). Dolby identified other entities it believed should have been named as RPIs. While the Board determined that the challenged claims were not anticipated and obvious, it refused to adjudicate whether there were other RPIs. The Board explained that there was no evidence that any of the alleged RPIs was estopped from bringing an IPR or that Unified purposely omitted potential RPIs to gain an advantage. Dolby appealed the Board’s refusal to adjudicate the RPI issue, and Unified and the PTAB challenged Dolby’s standing on appeal.
On appeal, the Federal Circuit held that Dolby lacked Article III standing. The court explained that, to establish Article III standing, an appellant must show an injury in fact, that is, a concrete and actual invasion of a legally protected interest. Dolby argued it had standing because (1) it was a “dissatisfied” party under 35 U.S.C. § 310; (2) its statutory right to information had been violated; and (3) it was injured because RPIs may been breaching license agreements, there may have been conflicts of interest with alleged RPIs, alleged RPIs might not be properly estopped in future proceedings, and Unified might be disincentivized from filing IPRs if it must identify its members as RPIs.
The court rejected Dolby’s arguments. First, the AIA’s “dissatisfied” party provision does not supersede the requirement for Article III standing. Second, even if patent owners have a right to have RPI disputes adjudicated in the context of IPR proceedings, they have no freestanding right to information. Finally, Dolby’s allegations of harm were too hypothetical and speculative to establish an injury in fact. The court therefore dismissed Dolby’s appeal.
No Takebacks: The High Bar for Departing from Patent Lexicography
In Alnylam Pharmaceuticals, Inc. v. Moderna, Inc., Appeal No. 23-2357 the Federal Circuit held that once the high threshold for lexicography is met, there must be a clear and unmistakable reason to depart from that controlling definition.
Alnylam sued Moderna, alleging that Moderna’s COVID-19 vaccine contained a lipid compound that infringed Alnylam’s patents. The asserted claims were directed toward a lipid compound with a hydrophobic tail which includes “a branched alkyl.” Moderna argued that Alnylam had acted as a lexicographer regarding “branched alkyl” based on the following sentence in the specification:
Unless otherwise specified, the term[] “branched alkyl” … refer[s] to an alkyl … group in which one carbon atom in the group (1) is bound to at least three other carbon atoms and (2) is not a ring atom of a cyclic group.
In contrast, Alnylam proposed a different construction that it asserted to be the ordinary meaning. The district court agreed with Moderna and construed “branched alkyl” according to the definition in the specification and further reasoned that any departure from that lexicography needed to be clear and unmistakable. The parties stipulated to noninfringement under the court’s construction and Alnylam appealed.
On appeal, the Federal Circuit agreed that Alnylam had acted as a lexicographer in defining “branched alkyl.” Further, the Federal Circuit agreed with the district court that once the high threshold for lexicography has been met, a high threshold must also be met before finding a departure from that controlling definition. Alnylam’s definition of “branched alkyl” included the phrase “unless otherwise specified,” which Alnylam argued left room for a broader interpretation elsewhere in the patent. However, the Federal Circuit found no clear reason in the claims, specification, or prosecution history to depart from the definition. Thus, the Federal Circuit affirmed.
Equitable Estoppel: Misleading Silence Not Enough Unless It Was Relied on And Caused Prejudice
In Fraunhofer-Gesellschaft v. Sirius Xm Radio Inc., Appeal No. 23-2267, The Federal Circuit held that the defense of equitable estoppel requires showing that the patentee engaged in misleading conduct that the accused infringer relied on, resulting in prejudice.
Fraunhofer sued Sirius XM (Sirius), alleging patent infringement. Fraunhofer had previously collaborated with Sirius’s predecessor, XM, to develop satellite radio technology. To do so, XM obtained a sublicense to the patents at issue from Fraunhofer’s exclusive third-party licensee, who later went bankrupt. Years later, Fraunhofer sued Sirius for patent infringement, arguing that all patent rights had reverted to Fraunhofer during the bankruptcy. Before the district court, Sirius moved for summary judgment that Fraunhofer’s claims were barred by equitable estoppel because Fraunhofer collaborated with Sirius’s predecessor to create the accused features of Sirius’s satellite radio system and Fraunhofer had waited more than five years to raise Sirius’s alleged infringement. The district court agreed, granting summary judgment on the basis of equitable estoppel.
On appeal, the Federal Circuit reversed. While the Federal Circuit agreed with the district court’s finding that Fraunhofer’s conduct was misleading by staying silent for more than five years before filing suit against Sirius, the Federal Circuit did not agree that Sirius presented sufficient evidence to show it relied on Fraunhofer’s silence when deciding to incorporate the accused features into its radio system. Because Sirius failed to prove reliance, the Federal Circuit held that Sirius could not show it was prejudiced by relying on Fraunhofer’s silence. However, the Federal Circuit also explained that, if Sirius could establish at trial that it relied on Fraunhofer’s misleading silence, then it could adequately show it was prejudiced by that reliance because Sirius clearly decided to migrate to the accused system rather than pursue a viable, non-infringing alternative.
Keeping PACE with CRISPR Technology
In Agilent Technologies, Inc. v. Synthego Corp., Appeal No. 23-2186, the Federal Circuit held that obviousness does not necessarily require all claimed limitations to be expressly disclosed in a primary prior art reference.
Synthego petitioned for inter partes review of two Agilent patents. Those patents are directed to chemically modified guide RNAs (“gRNA”) and their use in the CRISPR-Cas system, which permits selectively cleaving DNA at particular target sites. Dependent claims recite PACE and thioPACE nucleotide modifications and modifications comprising a 2′-O-methyl nucleotide with a 3′-phosphonoacetate.
The Board found some challenged claims were anticipated by a published PCT application. It reasoned the PCT application both discloses a functional gRNA and is enabling. The Board found the remaining claims obvious over the PCT application in view of either of two scientific articles. It relied on the scientific articles for their disclosure of PACE and thioPACE modifications and of 2′-O-methyl-3′-phosphonoacetate and 2′-O-methyl-3′-phosphonothioacetate nucleotides. Agilent appealed.
The Federal Circuit affirmed. Regarding anticipation, the Court found substantial evidence that the PCT application expressly discloses the claimed functional gRNA and found no error in the Board’s conclusion that the PCT application is enabling. Regarding obviousness, Agilent argued that the asserted ground fails because the PCT application does not mention PACE or thioPACE modifications with the claimed functionality. The Federal Circuit rejected this argument by distinguishing the concept of anticipation from obviousness, noting that the Board’s obviousness determination does not necessarily require all the claimed limitations to be expressly disclosed in the PCT application. Additionally regarding obviousness, the Court found substantial evidence supports the Board’s finding that a person of ordinary skill in the art would reasonably expect success in combining the PCT application with either scientific article.
An Eye Toward Prosecution History
In Eye Therapies, LLC v. Slayback Pharma LLC, Appeal No. 23-2173, the Federal Circuit held that the prosecution history required a more restrictive interpretation of the term “consisting essentially of” than the Board’s construction.
On petition by Slayback Pharma, LLC, the Patent Trial and Appeals Board considered the meaning of the transitional phrase “consisting essentially of” in Eye Therapies, LLC’s patent. The patent is directed to a method for reducing eye redness “consisting essentially of administering brimonidine to a patient.” In its opinion, the Board rejected Eye Therapies’ arguments that the claims are limited to a method for administering brimonidine as the sole active agent and concluded that additional active agents that reduce eye redness may be present. Applying this construction, the Board found the challenged claims unpatentable for obviousness. Eye Therapies appealed.
The Federal Circuit concluded that the Board erred in its construction of the phrase “consisting essentially of” by not correctly considering the prosecution history. Specifically, the Federal Circuit found that, during prosecution, the applicant replaced “comprising” with “consisting essentially of” to overcome a rejection. Because the applicant equated the “consisting essentially of” language to “methods which do not include administering other active agents” in their remarks, and because the examiner issued the patent on that change alone, the Federal Circuit reasoned the “consisting essentially of” limitation should be interpreted more restrictively than usual to disallow any additional active agents. The Federal Circuit remanded for further consideration under the correct claim construction.
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