RPD Holdings, LLC v. Tech Pharmacy Services

RPD Holdings, L.L.C. claims that it purchased a patent license from multiple debtors in bankruptcy sales of their estates. Tech Pharmacy Services argues that RPD does not have rights under the license to Tech Pharm’s patented invention. Concluding that the patent license was a rejected executory contract and could not have been transferred by the bankruptcy sales in question, we agree with Tech Pharm and affirm the decision of the district court.

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Soarus L.L.C. v. Bolson Materials International Corp.

This appeal turns on the construction under Illinois law of provisions in a nondisclosure agreement. The dispute arises out of Bolson Materials International Corporation’s inclusion in a patent application of particular information Soarus, L.L.C. believed was protected from disclosure by the parties’ agreement. The district court, exercising diversity jurisdiction, determined that the agreement’s plain language controlled and revealed no breach of contract by Bolson. We agree and affirm.

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United Food & Commercial Workers Unions & Employers Midwest Health Benefits Fund v. Novartis Pharmaceuticals Corp.

In these consolidated appeals from orders dismissing two putative antitrust class actions, purchasers of a brand-name, prescription drug allege that the drug maker unlawfully delayed the entry of generic versions of the drug into the United States market. Specifically, the plaintiffs allege that the drug maker committed antitrust violations by obtaining through a fraud on the United States Patent and Trademark Office ("Patent Office") a patent for a particular form of a component necessary to manufacture a drug to treat leukemia and by then seeking to enforce that patent through "sham" infringement litigation against manufacturers trying to enter the market with generic versions of that drug.

The drug maker moved to dismiss the antitrust actions on the ground that there was no fraud and that it was immune from antitrust liability for merely enforcing its patent through litigation. The drug maker claimed this immunity based on the Noerr-Pennington doctrine. See United Mine Workers of Am. v. Pennington, 381 U.S. 657, 669 (1965); E. R.R. Presidents Conference v. Noerr Motor Freight, Inc., 365 U.S. 127, 136 (1961). That doctrine provides a party immunity from antitrust liability for petitioning the government for redress, in light of the First Amendment right to petition the government. And it is clear that the petitioning activity within this doctrine's protection includes enforcing one's intellectual property rights in court. See Prof'l Real Estate Inv'rs, Inc. v. Columbia Pictures Indus., Inc. ("PREI"), 508 U.S. 49, 63-65 (1993) (applying NoerrPennington immunity to copyright infringement litigation); Amphastar Pharm. Inc. v. Momenta Pharm., Inc., 850 F.3d 52, 56-58 (1st Cir. 2017) (applying Noerr-Pennington immunity to patent infringement litigation).

The District Court agreed with the drug maker that NoerrPennington immunity applied to its alleged conduct and, on that basis, dismissed the putative class actions under Rule 12(b)(6) of the Federal Rules of Civil Procedure for failure to state a claim. The District Court acknowledged that Noerr-Pennington immunity has two exceptions. An antitrust defendant may not enjoy the immunity in enforcing its patent if it obtained that patent through a fraud on the Patent Office, Walker Process Equip., Inc. v. Food Mach. & Chem. Corp., 382 U.S. 172, 177-78 (1965), or if its suit to enforce the patent is a "sham" for impermissible anti-competitive conduct, PREI, 508 U.S. at 51. The District Court held, however, that the purchasers had not plausibly alleged that either exception applies here. We now affirm.

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American Society for Testing v. Public.Resource.Org, Inc.

Across a diverse array of commercial and industrial endeavors, from paving roads to building the Internet of Things, private organizations have developed written standards to resolve technical problems, ensure compatibility across products, and promote public safety. These technical works, which authoring organizations copyright upon publication, are typically distributed as voluntary guidelines for self-regulation. Federal, state, and local governments, however, have incorporated by reference thousands of these standards into law. The question in this case is whether private organizations whose standards have been incorporated by reference can invoke copyright and trademark law to prevent the unauthorized copying and distribution of their works. Answering yes, the district court granted partial summary judgment in favor of the private organizations that brought this suit and issued injunctions prohibiting all unauthorized reproduction of their works. In doing so, the court held that, notwithstanding serious constitutional concerns, copyright persists in incorporated standards and that the Copyright Act’s “fair use” defense does not permit wholesale copying in such situations. The court also concluded that the use of the private organizations’ trademarks ran afoul of the Lanham Act and did not satisfy the judicial “nominative fair use” exception. Because the district court erred in its application of both fair use doctrines, we reverse and remand, leaving for another day the far thornier question of whether standards retain their copyright after they are incorporated by reference into law.

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Puritan Medical Products Co. v. Copan Italia S.p.A.

Maine Supreme Court decision under Maine’s Actions for Bad Faith Assertion of Patent Infringement statute, Me. Rev. Stat. 14, 8701-8702.

Puritan Medical Products Company LLC appeals from a summary judgment entered in the Business and Consumer Docket (Mulhern, J.) in favor of Copan Italia S.p.A. on Puritan’s claim that Copan violated Maine’s Actions for Bad Faith Assertion of Patent Infringement statute, 14 M.R.S. §§ 8701-8702 (2017). Although the court granted Copan’s motion for summary judgment after finding no genuine issues of material fact and determining that Copan was entitled to judgment as a matter of law, Copan filed a cross-appeal to preserve its separate argument that Puritan’s claim was preempted by federal patent law. Because we conclude that Puritan’s claim is preempted, we affirm the grant of summary judgment in favor of Copan on other grounds.

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WesternGeco LLC v. ION Geophysical Corp., 585 U.S. __ (2018)

WesternGeco’s award for lost profits was a permissible domestic application of §284 of the Patent Act. Pp. 4–10.

(a) The presumption against extraterritoriality assumes that federal statutes “apply only within the territorial jurisdiction of the United States.” Foley Bros., Inc. v. Filardo, 336 U. S. 281, 285. The two-step framework for deciding extraterritoriality questions asks, first, “whether the presumption . . . has been rebutted.” RJR Nabisco, Inc. v. European Community, 579 U. S. ___, ___. If not, the second step asks “whether the case involves a domestic application of the statute.” Id., at ___. Courts make the second determination by identifying “the statute’s ‘focus’ ” and then asking whether the conduct relevant to that focus occurred in United States territory. Ibid. If so, the case involves a permissible domestic application of the statute. It is “usually . . . preferable” to begin with step one, but courts have the discretion to begin with step two “in appropriate cases.” Id., at ___, n. 5. The Court exercises that discretion here. Pp. 4–5.

(b) When determining “the statute’s ‘focus’ ”—i.e., “the objec[t] of [its] solicitude,” Morrison v. National Australia Bank Ltd., 561 U. S. 247, 267—the provision at issue is not analyzed in a vacuum. If it works in tandem with other provisions, it must be assessed in concert with those provisions. Section 284, the Patent Act’s general damages provision, states that “the court shall award the claimant damages adequate to compensate for the infringement.” The focus of that provision is “the infringement.” The “overriding purpose” of §284 is to “affor[d] patent owners complete compensation” for infringements. General Motors Corp. v. Devex Corp., 461 U. S. 648, 655. Section 271 identifies several ways that a patent can be infringed. Thus, to determine §284’s focus in a given case, the type of infringement that occurred must be identified. Here, §271(f)(2) was the basis for WesternGeco’s infringement claim and the lost-profits damages that it received. That provision regulates the domestic act of “suppl[ying] in or from the United States,” and this Court has acknowledged that it vindicates domestic interests, see, e.g., Microsoft Corp. v. AT&T Corp., 550 U. S. 437, 457. In sum, the focus of §284 in a case involving infringement under §271(f)(2) is on the act of exporting components from the United States. So the conduct in this case that is relevant to the statutory focus clearly occurred in the United States. Pp. 5–8.

(c) ION’s contrary arguments are unpersuasive. The award of damages is not the statutory focus here. The damages themselves are merely the means by which the statute achieves its end of remedying infringements, and the overseas events giving rise to the lost profit damages here were merely incidental to the infringement. In asserting that damages awards for foreign injuries are always an extraterritorial application of a damages provision, ION misreads a portion of RJR Nabisco that interpreted a substantive element of a cause of action, not a remedial damages provision. See 579 U. S., at ___. Pp. 8–9.

837 F. 3d 1358, reversed and remanded.

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Altaire Pharmaceuticals, Inc. v. Paragon Bioteck, Inc.

Appellant Altaire Pharmaceuticals, Inc. (“Altaire”) sought post-grant review of claims 1–13 (“the Asserted Claims”) of Appellee Paragon Bioteck, Inc.’s (“Paragon”) U.S. Patent No. 8,859,623 (“the ’623 patent”). The U.S. Patent and Trademark Office’s Patent Trial and Appeal Board (“PTAB”) issued a final written decision determining that Altaire failed to prove that the Asserted Claims were unpatentable for obviousness over two production lots of Altaire’s phenylephrine hydrochloride ophthalmic solution products, Lots #11578 and #11581,1 which are used to dilate patients’ pupils. See Altaire Pharm., Inc. v. Paragon Bioteck, Inc., No. PGR2015-00011 (P.T.A.B. Nov. 14, 2016) (J.A. 1–21).

Altaire appeals. We have jurisdiction pursuant to 28 U.S.C. § 1295(a)(4)(A) (2012). We reverse-in-part, vacate-in-part, and remand.

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SAS Institute Inc. v. Iancu

Inter partes review allows private parties to challenge previously issued patent claims in an adversarial process before the Patent Office. At the outset, a party must file a petition to institute review, 35 U. S. C. §311(a), that identifies the challenged claims and the grounds for challenge with particularity, §312(a)(3). The patent owner, in turn, may file a response. §313. If the Director of the Patent Office determines “there is a reasonable likelihood that the petitioner would prevail with respect to at least 1 of the claims challenged in the petition,” §314(a), he decides “whether to institute . . . review . . . pursuant to [the] petition,” §314(b). “If . . . review is instituted and not dismissed,” at the end of the litigation the Patent Trial and Appeal Board “shall issue a final written decision with respect to the patentability of any patent claim challenged by the petitioner.” §318(a).

Petitioner SAS sought review of respondent ComplementSoft’s software patent, alleging that all 16 of the patent’s claims were unpatentable. Relying on a Patent Office regulation recognizing a power of “partial institution,” 37 CFR §42.108(a), the Director instituted review on some of the claims and denied review on the rest. The Board’s final decision addressed only the claims on which the Director had instituted review. On appeal, the Federal Circuit rejected SAS’s argument that §318(a) required the Board to decide the patentability of every claim challenged in the petition.

Held:

When the Patent Office institutes an inter partes review, it must decide the patentability of all of the claims the petitioner has challenged. The plain text of §318(a) resolves this case. Its directive is both mandatory and comprehensive. The word “shall” generally imposes a nondiscretionary duty, and the word “any” ordinarily implies every member of a group. Thus, §318(a) means that the Board must address every claim the petitioner has challenged. The Director’s “partial institution” power appears nowhere in the statutory text. And both text and context strongly counsel against inferring such a power.

The statute envisions an inter partes review guided by the initial petition. See §312(a)(3). Congress structured the process such that the petitioner, not the Director, defines the proceeding’s contours. The ex parte reexamination statute shows that Congress knew exactly how to authorize the Director to investigate patentability questions “[o]n his own initiative, and at any time,” §303(a). The inter partes review statute indicates that the Director’s decision “whether” to institute review “pursuant to [the] petition” is a yes-or-no choice. §314(b).

Section 314(a)’s requirement that the Director find “a reasonable likelihood” that the petitioner will prevail on “at least 1 of the claims challenged in the petition” suggests, if anything, a regime where a reasonable prospect of success on a single claim justifies review of them all. Again, if Congress had wanted to adopt the Director’s claim-by-claim approach, it knew how to do so. See §304. Nor does it follow that, because §314(a) invests the Director with discretion on the question whether to institute review, it also invests him with discretion regarding what claims that review will encompass. The rest of the statute confirms, too, that the petitioner’s petition, not the Director’s discretion, should guide the life of the litigation. See, e.g., §316(a)(8).

The Director suggests that a textual discrepancy between §314(a)— which addresses whether to institute review based on claims found “in the petition”—and §318(a)—which addresses the Board’s final resolution of the claims challenged “by the petitioner”—means that the Director enjoys the power to institute a review covering fewer than all of the claims challenged in the petition. However, the statute’s winnowing mechanism—which allows a patent owner to concede one part of a petitioner’s challenge and “[c]ancel any challenged patent claim,” §316(d)(1)(A)—fully explains why Congress adopted the slightly different language.

The Director’s policy argument—that partial institution is efficient because it permits the Board to focus on the most promising challenges and avoid spending time and resources on others—is properly addressed to Congress, not this Court. And the Director’s asserted “partial institution” power, which is wholly unmentioned in the statute, is not entitled to deference under Chevron U. S. A. Inc. v. Natural Resources Defense Council, Inc., 467 U. S. 837. Finally, notwithstanding §314(d)—which makes the Director’s determination whether to institute an inter partes review “final and nonappealable”—judicial review remains available consistent with the Administrative Procedure Act to ensure that the Patent Office does not exceed its statutory bounds. Cuozzo Speed Technologies, LLC v. Lee, 579 U. S. ___, distinguished. Pp. 4–14.

825 F. 3d 1341, reversed and remanded.

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Oil States Energy Services, LLC v. Greene’s Energy Group, LLC

Inter partes review authorizes the United States Patent and Trademark Office (PTO) to reconsider and cancel an already-issued patent claim in limited circumstances. See 35 U. S. C. §§311–319. Any person who is not the owner of the patent may petition for review. §311(a). If review is instituted, the process entitles the petitioner and the patent owner to conduct certain discovery, §316(a)(5); to file affidavits, declarations, and written memoranda, §316(a)(8); and to receive an oral hearing before the Patent Trial and Appeal Board, §316(a)(10). A final decision by the Board is subject to Federal Circuit review. §§318, 319.

Petitioner Oil States Energy Services, LLC, obtained a patent relating to technology for protecting wellhead equipment used in hydraulic fracturing. It sued respondent Greene’s Energy Group, LLC, in Federal District Court for infringement. Greene’s Energy challenged the patent’s validity in the District Court and also petitioned the PTO for inter partes review. Both proceedings progressed in parallel. The District Court issued a claim-construction order favoring Oil States, while the Board issued a decision concluding that Oil States’ claims were unpatentable. Oil States appealed to the Federal Circuit. In addition to its patentability arguments, it challenged the constitutionality of inter partes review, arguing that actions to revoke a patent must be tried in an Article III court before a jury. While the case was pending, the Federal Circuit issued a decision in a separate case, rejecting the same constitutional arguments raised by Oil States. The court then summarily affirmed the Board’s decision in this case.

Held: 

  1. Inter partes review does not violate Article III. Pp. 5–17.

(a) Under this Court’s precedents, Congress has significant latitude to assign adjudication of public rights to entities other than Article III courts. Executive Benefits Ins. Agency v. Arkison, 573 U. S. ___, ___. Inter partes review falls squarely within the public-rights doctrine. The decision to grant a patent is a matter involving public rights. Inter partes review is simply a reconsideration of that grant, and Congress has permissibly reserved the PTO’s authority to conduct that reconsideration. Pp. 5–10.

(i) The grant of a patent falls within the public-rights doctrine. United States v. Duell, 172 U. S. 576, 582–583. Granting a patent involves a matter “arising between the government and others.” Ex parte Bakelite Corp., 279 U. S. 438, 451. Specifically, patents are “public franchises.” Seymour v. Osborne, 11 Wall. 516, 533. Additionally, granting patents is one of “the constitutional functions” that can be carried out by “the executive or legislative departments” without “‘judicial determination.’” Crowell v. Benson, 285 U. S. 22, 50– 51. Pp. 7–8.

(ii) Inter partes review involves the same basic matter as the grant of a patent. It is “a second look at an earlier . . . grant,” Cuozzo Speed Technologies, LLC v. Lee, 579 U. S. ___, ___, and it involves the same interests as the original grant, see Duell, supra, at 586. That inter partes review occurs after the patent has issued does not make a difference here. Patents remain “subject to [the Board’s] authority” to cancel outside of an Article III court, Crowell, supra, at 50, and this Court has recognized that franchises can be qualified in this manner, see, e.g., Louisville Bridge Co. v. United States, 242 U. S. 409, 421. Pp. 8–10.

(b) Three decisions that recognize patent rights as the “private property of the patentee,” United States v. American Bell Telephone Co., 128 U. S. 315, 370, do not contradict this conclusion. See also McCormick Harvesting Machine Co. v. Aultman, 169 U. S. 606, 609; Brown v. Duchesne, 19 How. 183, 197. Nor do they foreclose the kind of post-issuance administrative review that Congress has authorized here. Those cases were decided under the Patent Act of 1870 and are best read as describing the statutory scheme that existed at that time. Pp. 10–11.

(c) Although patent validity was often decided in 18th-century English courts of law, that history does not establish that inter partes review violates the “general” principle that “Congress may not ‘withdraw from judicial cognizance any matter which, from its nature, is the subject of a suit at the common law,” Stern v. Marshall, 564 U. S. 462, 484. Another means of canceling a patent at that time—a petition to the Privy Council to vacate a patent—closely resembles inter partes review. The parties have cited nothing to suggest that the Framers were not aware of this common practice when writing the Patent Clause, or that they excluded the practice from the scope of the Clause. Relatedly, the fact that American courts have traditionally adjudicated patent validity in this country does not mean that they must forever do so. See post, at 8–10. Historical practice is not decisive here because matters governed by the publicrights doctrine may be assigned to the Legislature, the Executive, or the Judiciary. Ex parte Bakelite Corp., supra, at 451. That Congress chose the courts in the past does not foreclose its choice of the PTO today. Pp. 12–15.

(d) Finally, the similarities between the various procedures used in inter partes review and procedures typically used in courts does not lead to the conclusion that inter partes review violates Article III. This Court has never adopted a “looks like” test to determine if an adjudication has improperly occurred outside an Article III court. See, e.g., Williams v. United States, 289 U. S. 553, 563. Pp. 15–16. (e) This holding is narrow. The Court addresses only the constitutionality of inter partes review and the precise constitutional challenges that Oil States raised here. The decision should not be misconstrued as suggesting that patents are not property for purposes of the Due Process Clause or the Takings Clause. Pp. 16–17.

2. Inter partes review does not violate the Seventh Amendment. When Congress properly assigns a matter to adjudication in a nonArticle III tribunal, “the Seventh Amendment poses no independent bar to the adjudication of that action by a nonjury factfinder.” Granfinanciera, S. A. v. Nordberg, 492 U. S. 33, 52–53. Thus, the rejection of Oil States’ Article III challenge also resolves its Seventh Amendment challenge. P. 17.

639 Fed. Appx. 639, affirmed.

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Elenza, Inc. v. Alcon Laboratories Holding Corporation

Replacement lenses used to treat eye cataracts have a limitation—the new lenses focus only at one distance. In most cases, reading glasses are still required after surgery. Elenza, Inc. thought it had a solution to the problem—an electroactive intraocular lens (“EAIOL”) that used electric power and changes in eye pupil size to “trigger” the focus of an artificial lens. If it worked, patients could see clearly at multiple distances without glasses.

Alcon Laboratories Holding Corporation, a developer of artificial lenses, was also exploring EAIOL lenses. Elenza and Alcon decided to jointly pursue the technology, first by signing a Non-Disclosure Agreement (“NDA”), followed by a Stock Purchase Agreement (“SPA”). Unfortunately, the project fizzled after Elenza failed to meet development milestones in the SPA. Much to Elenza’s surprise, two years later, Alcon filed a patent application for an EAIOL and announced that it was working with Google, Inc. to develop an EAIOL.

Elenza filed suit in Superior Court and claimed that Alcon breached its agreements with Elenza and misappropriated Elenza’s EAIOL trade secrets. Before trial, the Superior Court granted in part Alcon’s motion for summary judgment, finding that Elenza failed to support its trade secret claims. The court also limited Elenza’s damage claims. Elenza’s contract claims went to trial. A jury found against Elenza on all claims.

On appeal, Elenza argues that the Superior Court erred when it granted summary judgment on its trade secret claims. According to Elenza, at the summary judgment stage, its trade secret disclosures were sufficient to prove that trade secrets existed and that Alcon used or disclosed those secrets in its later development efforts. We need not, however, reach Elenza’s claim on appeal that it raised disputed factual issues about the existence of trade secrets because we agree with the Superior Court that, at summary judgment, Elenza failed to support its claim that Alcon improperly used or disclosed any of Elenza’s alleged trade secrets. Thus, we affirm the Superior Court’s judgment.

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