Baxter Loses $23.5 Million Judgment to Later Reexamination: Judgment not “Sufficiently Final”

| July 3, 2013

The power of reexamination was demonstrated once again in the CAFC’s decision yesterday in Fresenius v. Baxter Int’l.  There, the Court vacated an infringement judgment and an award of damages, because of a later finding of invalidity by the Patent Office in a reexamination proceeding.  For practitioners, the panel’s decision is consistent with the Court’s precedent since In re Swanson.  Also, the decision might clarify the period of time in which judgments are vulnerable to later reexaminations.  In the words of the panel majority, the answer is when the final judgment is “sufficiently final.”

The procedural history of the case is important:

  • In 2003 Fresenius filed a declaratory judgment action against Baxter International, alleging that certain claims 26–31 of U.S. Patent No. 5,247,434 were invalid and not infringed.
  • Baxter counterclaimed for infringement.
  • In 2005 Fresenius requested reexamination of the claims.
  • In 2007 the trial court entered judgment against Fresenius, finding that the ’434 claims were infringed and not invalid.
  • On appeal, the CAFC affirmed the determination that the claims were not invalid, but remanded to the trial court to reconsider its injunction and post-verdict damages.
  • In 2010, while the litigation was pending on remand, the PTO completed a reexamination of the ’434 patent, determining that all asserted claims were invalid.
  • In 2012 the CAFC affirmed the PTO’s invalidity determination from the reexamination proceeding, and issued its mandate.
  • In 2012 the trial court entered judgment against Fresenius in the pending infringement action, awarding Baxter $23.5 million.  Both sides appealed.


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Inter Partes Review Requests against Four VirnetX Patents, Week of June 24, 2013

| July 1, 2013

Last week saw four more inter partes review requests against VirnetX patent, this time filed by New Bay Capital (see inter partes review Request Nos. (1) through (4)).  As we have previously reported, VirnetX has been quite successful in litigating and licensing these patents.

A number of universities – Stanford University, Boston University, University of Illinois – saw inter partes review requests filed against their patents (see inter partes review Request Nos. (8), (10) & (13)).

Sony filed its second inter partes review requests against U.S. Patent No. 6,218,903 owned by Network-1 Security Solutions, Inc. (see inter partes review Request No. (6)).   Sony’s previous request for inter partes review of the ‘930 patent was denied (see IPR2013-00092). A request for rehearing of a portion of the Board’s decision not to institute review is currently pending.


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APJs Take Literal Approach in IPR Institutions

| June 28, 2013

Patent examiners, either considering original applications or reexamining issued patents, tend to operate with a certain amount of flexibility.  For instance, where a reexamination request asserts that a claim is anticipated by a particular prior art reference, an examiner might conclude that the claim is not anticipated, but is obvious over the reference and reject the claim accordingly.  The APJs in their inter partes review institution decisions, in contrast, rule on only the validity issues expressly presented to them.

Last week’s institution decision in Medline Industries v. Paul Hatrmann AG, IPR2013-00173, is exemplary.  The petition asked for inter partes review, asserting that independent claim 1 and dependent claims 4-7, 10, 14 & 16 were anticipated by the Goates Patent.; it also asserted that several other dependent claims were obvious over Goates in combination with certain secondary references.

The APJs found that Goates met each limitation of claim 1 and the challenged dependent claims, except for the so-called “retaining forces” limitation in claim 1.  The APJs therefore denied inter partes review of those claims based on Goates as an anticipatory reference.  On the other hand, the APJs concluded that the secondary reference “Karami”  did satisfy the “retaining forces” limitation and that there was a “reasonable likelihood” that the secondary reference would have motivated one skilled in the art to modify Goates to meet the requirements of claims 2-3 and 8-9.  They therefore ordered inter partes review of dependent claims 2-3 and 8-9 on the issue of whether those claims would be obvious over Goates in combination with the secondary Karami reference.


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Twenty Inter Partes Review Petitions Filed, Week of June 17, 2013

| June 24, 2013

Inter Partes review is becoming more and more popular.  Last week, review requests were filed against 20 patents.  Apple challenged another VirnetX patent (see inter partes review Request Nos. (1)), Aisin Seiki requested review of three American Vehicular Sciences patents related car seat weight sensors (see inter partes review Request Nos. (16), (18) & (19)), and Samsung filed against a U.S. Ethernet Innovations patent (see inter partes review Request No. (20)).

Notably, several requests involved pharmaceutical patents.  Accord Healthcare requested inter partes review of an antifoliate patent owned by Ely Lilly (see inter partes review Request No. (3)), and Amneal Pharmaceuticals sought inter partes review of three Supernus patents for tetracycline formulations (see inter partes review Request Nos. (11), (13) & (14)).  Pharma patents were relatively rare in earlier inter partes reexamination practice.


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