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Landmark Screens, LLC v. Morgan, Lewis, & Bockius, LLP

Landmark Screens, LLC (“Landmark”) appeals from the final decision of the United States District Court for the Northern District of California dismissing its state law fraud claim against Morgan, Lewis & Bockius (“MLB”) and Thomas D. Kohler (“Kohler”). Landmark Screens, LLC v. Morgan Lewis & Bockius, LLP, No. 5:08- cv-2581, 2011 WL 482771 (N.D. Cal. Feb. 7, 2011) (hereafter “Dismissal Order”). Granting summary judgment to the defendants, the district court dismissed Landmark’s complaint on the grounds that it was filed out of time under the relevant California statute of limitations and that Landmark’s timeliness error was not correctible in equity. In addition, the court issued a partial summary judgment order, the effect of which would have been to limit damages available to Landmark had its complaint been both timely and successful. Landmark Screens, LLC v. Morgan, Lewis & Bockius, LLP, No. 5:08-cv-2581, 2010 WL 3629816 (N.D. Cal. Sept. 14, 2010) (hereafter “Damages Order”). For the reasons set forth below, we reverse the judgment dismissing the complaint because under California equitable tolling law, the state law fraud claim was timely filed in the United States district court. Further, because the record does not support the district court’s manner of summarily limiting damages, we vacate the Damages Order and remand the case for trial on the fraud claim.

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USPPS, Ltd. v. Avery Dennison Corp.

USPPS, Ltd. (“USPPS”) appeals the order of the United States District Court for the Western District of Texas dismissing its claim for breach of fiduciary duty and fraud. See USPPS, Ltd. v. Avery Dennison Corp., No. SA-07-CA-963-FB, 2010 U.S. Dist. LEXIS 81707 (W.D. Tex. June 4, 2010). We affirm.

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Bayer Schering Pharma AG v. Lupin, Ltd.

Bayer Schering Pharma AG and Bayer HealthCare Pharmaceuticals, Inc., (collectively, “Bayer”) appeal from two judgments of the United States District Court for the Southern District of New York. In the first case, the court dismissed Bayer’s patent infringement claims against Watson Pharmaceuticals, Inc., and Watson Laboratories, Inc., (collectively, “Watson”) and Sandoz, Inc. In the second case, the court dismissed similar patent infringe-ment claims against Lupin Ltd. and Lupin Pharmaceuti-cals, Inc., (collectively, “Lupin”). We affirm.

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In re Cyclobenzaprine Hydrochloride Extended-Release Capsule Patent Litigation

After a bench trial, the U.S. District Court for the Dis-trict of Delaware found U.S. Patent Nos. 7,387,793 and 7,544,372 invalid as obvious. Case No. 2011-1409 is an appeal from that judgment. We reverse and vacate the district court’s judgment of invalidity because the district court erred when it declared the patents in suit invalid as obvious. Specifically, by failing to consider the lack of a known pharmacokinetic/pharmacodynamic relationship for the claimed drug formulation, the trial court erred when it assessed the importance of the teachings of the prior art to the obviousness analysis.

As an alternative ground in support of the district court’s judgment invalidating the ’793 and ’372 patents, the defendants argue that the district court erred when it found that the patents satisfy the best mode disclosure requirement. We affirm the district court’s best mode ruling. The evidence supports a finding that the patentsin suit enable one of ordinary skill in the art to practice the inventor’s preferred dew points. After invalidating the ’793 and ’372 patents as obvi-ous, the district court enjoined the defendants—the parties who prevailed at trial—from launching their generic product pending appeal to this court. That order is challenged in Case No. 2011-1399. We dismiss that appeal as premature because several outstanding issues in the district court leave uncertain whether the defendants could recover on their appeal bond.

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Dey Pharma, LP v. Sunovion Pharmaceuticals, Inc.

Dey Pharma, LP and Dey Inc. (“Dey”) brought suit against Sunovion Pharmaceuticals, Inc. (“Sunovion”) seeking a declaratory judgment that Dey’s generic pharmaceutical product does not infringe Sunovion’s U.S. Patent No. 6,451,289 (“the ’289 patent”), and that the ’289 patent is invalid. The district court concluded that it had subject-matter jurisdiction over the action, and the parties thereafter stipulated to a final judgment of noninfringement. See Dey Pharma, L.P. v. Sunovion Pharms. Inc., No. 08-372 (D. Del. June 20, 2011) (final judgment); Dey LP v. Sepracor Inc., No. 08-372, 2009 WL 1043892 (D. Del. Apr. 16, 2009) (denying motion for certification); Dey, L.P. v. Sepracor, Inc., 595 F. Supp. 2d 355 (D. Del. 2009) (denying motion to dismiss). Sunovion appeals, challenging the district court’s subject-matter jurisdiction. We affirm.

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US v. Lam

A jury convicted appellants Chong Lam and Siu Yung Chan (collectively "Appellants") of conspiracy to traffic in counterfeit goods, trafficking in counterfeit goods, and smuggling goods into the United States. The counterfeiting convictions were based on the jury’s determination that a mark displayed on goods Appellants imported into the United States was a counterfeit of a trademark registered to fashion designer Burberry Ltd. ("Burberry"), depicting its signature plaid pattern (the "Burberry Check mark"). On appeal, Appellants advance various challenges to their convictions for trafficking in counterfeit goods under 18 U.S.C. § 2320(a). They also assert that certain comments made by prosecutors at trial necessitate a retrial. Because we find these arguments lacking in merit, we affirm.

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Kappos v. Hyatt

Held: There are no limitations on a patent applicant’s ability to introduce new evidence in a §145 proceeding beyond those already present in the Federal Rules of Evidence and the Federal Rules of Civil Procedure. If new evidence is presented on a disputed question of fact, the district court must make de novo factual findings that take account of both the new evidence and the administrative record before the PTO. Pp. 5−14.

(a) Section 145, by its express terms, neither imposes unique evidentiary limits in district court proceedings nor establishes a heightened standard of review for PTO factual findings. Nonetheless, the Director contends that background principles of administrative law govern the admissibility of new evidence and impose a deferential standard of review in §145 proceedings. As the Director concedes, however, judicial review in §145 proceedings is not limited to the administrative record because the district court may consider new evidence. If it does so, the district court must act as a factfinder and cannot apply the APA’s deferential standard to PTO factual findings when those findings are contradicted by new evidence. Moreover, the doctrine of administrative exhaustion―the primary purpose of which is “the avoidance of premature interruption of the administrative process,” McKart v. United States, 395 U. S. 185, 193―does not apply because the PTO process is complete by the time a §145 proceeding occurs. Pp. 5−7.

(b) The core language of the 1870 Patent Act, codified as Revised Statute §4915 (R. S. 4915), remains largely unchanged in §145. Decisions interpreting R. S. 4915 thus inform this Court’s understanding of §145. Both Butterworth v. United States ex rel. Hoe, 112 U. S. 50, and Morgan v. Daniels, 153 U. S. 120, describe the nature of R. S. 4915 proceedings, but the two opinions can be perceived as being in some tension. Butterworth described the proceeding as an original civil action seeking de novo adjudication of the merits of a patent application, while Morgan described it as a suit for judicial review of agency action under a deferential standard. The cases are distinguishable, however, because they addressed different circumstances. Butterworth discussed a patent applicant’s challenge to the denial of his application, whereas Morgan involved an interference proceeding that would now be governed by §146, not §145, and in which no new evidence was presented. Here, this Court is concerned only with a §145 proceeding in which new evidence was presented to the District Court, so Butterworth guides this Court’s decision. Thus, a district court conducting a §145 proceeding may consider all competent evidence adduced and is not limited to considering only new evidence that could not have been presented to the PTO. The introduction of new evidence in §145 proceedings is subject only to the Federal Rules of Evidence and the Federal Rules of Civil Procedure, and if new evidence is presented to the district court on a disputed factual question, de novo findings by the district court will be necessary for that new evidence to be taken into account along with the evidence before theBoard. Pp. 7−13.

(c) The district court may, however, consider whether the applicant had an opportunity to present the newly proffered evidence before the PTO in deciding what weight to afford that evidence. Pp. 13−14.

625 F. 3d 1320, affirmed and remanded.

THOMAS, J., delivered the opinion for a unanimous Court. SOTO-MAYOR, J., filed a concurring opinion, in which BREYER, J., joined.

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Workers did not exceed authorization when data stolen, says appeals court

Ninth Circuit offers unique take on Computer Fraud and Abuse Act

By Jaikumar Vijayan

Computerworld - In a somewhat startling decision, the U.S. Court of Appeals for the Ninth Circuit last week ruled that several employees at an executive recruitment firm did not exceed their authorized access to their company's database when they logged into the system and stole confidential data from it.

In a 22-page ruling, the appellate court held that an employee with valid access to corporate data cannot be held liable under the federal Computer Fraud and Abuse Act (CFAA) if they then misuse or misappropriate the data.

"The CFAA expressly prohibits improper 'access' of computer information," chief judge Alex Kozinski wrote in the court's majority opinion. "It does not prohibit misuse or misappropriation," he wrote. The term "exceed authorized access" under the CFAA applies specifically to external hackers and violations of "restrictions on access to information, and not restrictions on its use," Kozinski held.

The appellate court's decision affirms a previous ruling made by the U.S. District Court for the Northern District of California. The government must now decide if it wants to take the case all the way to the U.S. Supreme Court.

Full story.

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Caraco Pharmaceutical Laboratories, Ltd. v. Novo Nordisk A/S

The Food and Drug Administration (FDA) regulates the manufacture, sale, and labeling of prescription drugs. A brand-name drug manufacturer seeking FDA approval for a drug submits a new drug application (NDA) containing, among other things, a statement of thedrug’s components and proposed labeling describing the uses forwhich the drug may be marketed. See 21 U. S. C. §§355(b)(1), (d). Once the FDA has approved a brand manufacturer’s drug, anothercompany may seek permission to market a generic version by filing an abbreviated new drug application (ANDA). See §§355(j)(2)(A)(ii), (iv). But the FDA cannot authorize a generic drug that would infringe a brand manufacturer’s patent. To facilitate the approval ofgeneric drugs as soon as patents allow, the Hatch-Waxman Amendments require a brand manufacturer to submit its patent numbersand expiration dates, §355(b)(1); and FDA regulations require a description of any method-of-use patent, known as a use code, see 21 CFR §§314.53(c)(2)(ii)(P)(3), (e). The FDA does not attempt to verifythe accuracy of the use codes that brand manufacturers supply. Instead, it simply publishes the codes, patent numbers, and expirationdates in a large volume known as the Orange Book. After consulting the Orange Book, an ANDA applicant enters one of several certifications to assure the FDA that its generic drug will not infringe the brand’s patent. If the patent has not expired, an applicant may fulfill this requirement in one of two ways. First, it maysubmit a so-called section viii statement asserting that it will marketthe drug for only those methods of use not covered by the brand’s patent, see 21 U. S. C. §355(j)(2)(A)(viii), and proposing a label that“carves out” the still-patented method(s) of use, see 21 CFR §314.94(a)(8)(iv). The FDA will not approve an ANDA with a sectionviii statement if the proposed label overlaps at all with the brand’suse code. Second, the ANDA applicant may file a so-called paragraphIV certification stating that the brand’s patent “is invalid or will notbe infringed by the [generic drug’s] manufacture, use, or sale.” 21 U. S. C. §355(j)(2)(A)(vii)(IV). Such filing is treated as an act of infringement, giving the brand an immediate right to sue and resultingin a delay in the generic drug’s approval. In 2002, the Federal Trade Commission (FTC) issued a study detailing evidence that brands were submitting inaccurate patent information to the FDA in order to prevent or delay the marketing ofgeneric drugs. In response, Congress created a statutory counterclaim available to generic manufacturers sued for patent infringement. The provision allows a generic manufacturer to “assert a counterclaim seeking an order requiring the [brand] to correct or deletethe patent information submitted by the [brand] under subsection (b)or (c) [of 21 U. S. C. §355] on the ground that the patent does notclaim . . . an approved method of using the drug.” 21 U. S. C. §355(j)(5)(C)(ii)(I). This case concerns the scope of the counterclaim provision. Respondents (collectively Novo) manufacture the brand-name version of the diabetes drug repaglinide. The FDA has approved threeuses of the drug, but Novo’s method-of-use patent claims only one. Petitioners (collectively Caraco) wish to market a generic version of the drug for the other two approved methods of use. Caraco initiallyfiled a paragraph IV certification and, considering this an act of infringement, Novo brought suit. Caraco then submitted a section viii statement and a proposed label carving out Novo’s patented therapy. But before the FDA could approve Caraco’s ANDA, Novo changed its use code to indicate that it held a patent on all three approved methods of using repaglinide. Because Caraco’s proposed label nowoverlapped with Novo’s use code, the FDA would not permit Caracoto employ section viii to bring its drug to market. Caraco filed a statutory counterclaim in the ongoing infringementaction, seeking an order requiring Novo to “correct” its use code because the patent did not claim two of the three approved methods ofusing repaglinide. The District Court granted Caraco summary judgment, but the Federal Circuit reversed. It read the counterclaim’s phrase “the patent does not claim . . . an approved method of using the drug” as requiring Caraco to demonstrate that Novo’s patent does not claim any approved method of use; because the patent covers one approved method, the counterclaim was unavailable. The court also ruled that the counterclaim provision does not reach use codes because they are not “patent information submitted by the court concluded, consists only of the patent number and expirationdate expressly required by the statutory provisions.

Held: A generic manufacturer may employ the counterclaim provision to force correction of a use code that inaccurately describes the brand’s patent as covering a particular method of using a drug. Pp. 10–24.

(a) The parties first dispute the meaning of “not an” in the phrase“the patent does not claim . . . an approved method of using the drug.” Novo contends that the counterclaim is available only if the patentclaims no approved method of use, but Caraco reads this language to permit a counterclaim whenever a patent does not claim the particular method that the ANDA applicant seeks to market. In isolation, either of these readings is plausible, so the meaning of the phrase “not an” turns on statutory context, see Johnson v. United States, 559 U. S. ___, ___. This context favors Caraco: Congress understood that a drug may have multiple methods of use, not all of which a patentcovers; and a section viii statement allows the FDA to approve a generic drug for unpatented uses so that it can quickly come to market.The statute thus contemplates that one patented use will not foreclose marketing a generic drug for other unpatented ones. Within this scheme, the counterclaim naturally functions to challenge thebrand’s assertion of rights over whichever discrete uses the generic company wishes to pursue; the counterclaim’s availability matchesthe availability of FDA approval under the statute. Pp. 11–15.

(b) The parties further dispute whether use codes qualify as “patent information submitted by the [brand] under subsection (b) or (c)” of §355. A use code, which is a description of the patent, surely qualifies as “patent information.” Novo nonetheless contends that use codes are not “submitted under” subsections (b) and (c) because those provisions expressly require an NDA applicant to provide only “thepatent number and the expiration date of any patent” claiming thedrug or a method of its use. But §§355(b) and (c) also govern the regulatory process by which brands provide additional patent information to the FDA. The term “under” is broad enough to include patent information, like use codes, that brands submit as required bythis scheme. This reading draws support from the Court’s prior decisions in e.g., Eli Lilly & Co. v. Medtronic, Inc., 496 U. S. 661, 665– 668, and Ardestani v. INS, 502 U. S. 129, 135; and it is bolstered by Congress’s use of the narrower phrases “described in” and “prescribed by” in neighboring provisions. See §§355(c)(2), (d)(6). Again, the conclusion that use codes are “submitted under” §§355(b) and (c) fits the broader statutory context. Use codes are pivotal to the FDA’s implementation of the Hatch-Waxman Amendments, and so it is unsurprising that the counterclaim provision’s language sweeps widely enough to embrace them. Pp. 15–18.

(c) The counterclaim provision’s description of available remedies dispatches whatever remains of Novo’s arguments. The Court’s reading gives content to both remedies: It “delete[s]” a listing from the Orange Book when the brand holds no relevant patent and “correct[s]” the listing when the brand has misdescribed the patent’s scope. By contrast, Novo’s interpretation would all but read “correct”out of the statute. If, as Novo contends, the counterclaim is available only where the patent claims no approved method of use, the remedy will always be to delete the patent information. And if the counterclaim reaches only patent numbers and expiration dates, the Orange Book will include few if any mistakes in need of correction. Pp. 18– 20. (d) Novo advances two arguments relating to the counterclaim’sdrafting history, but neither overcomes the statutory text and context. The company first points out that Congress failed to pass anearlier bill that would have required brands to file descriptions of method-of-use patents and would have allowed generic companies tobring civil actions to “delete” or “correct” the information filed. Because that bill would have allowed a generic applicant to challenge overbroad descriptions of a patent, Novo contends that this Courtcannot read the statute that was eventually enacted as doing the same. But the earlier bill contained numerous items that may have caused its failure. And the limited criticism of its mechanism for challenging brands’ descriptions of their patents focused on the creation of an independent cause of action—stronger medicine than the counterclaim at issue here. Finally, between that bill’s demise andthe counterclaim’s enactment, the FDA issued a rule requiring brands to supply use codes. The counterclaim provision’s drafters thus had no need to require this information. Novo next contends that Congress established the counterclaim onlyto address the impossibility of deleting an improperly listed patentfrom the Orange Book—a problem that had come to light when theFederal Circuit held in Mylan Pharmaceuticals, Inc. v. Thompson, 268 F. 3d 1323, that generics had no cause of action to delist a patent.Novo thus contends that the counterclaim is a mere delisting provision. But this Court thinks Mylan alerted Congress to a broaderproblem: that generic companies generally had no avenue to challenge the accuracy of brands’ patent listings, and that the FDA therefore could not approve proper applications to bring inexpensive drugs to market. Again, the proof of that lies in the statute itself—its textand context demonstrate that the counterclaim is available not only(as in Mylan) when the patent listing is baseless, but also (as here)when it is overbroad. Moreover, Congress’s equation of the two situations makes perfect sense. In either case, the brand submits misleading patent information to the FDA, delaying or blocking approval of a generic drug that infringes no patent and thus, under the statute,should go to market. Pp. 20–24. 601 F. 3d 1359, reversed and remanded.

KAGAN, J., delivered the opinion for a unanimous Court. SOTOMAYOR, J., filed a concurring opinion.

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