Teva Pharmaceuticals USA, Inc. v. Sandoz, Inc., 574 U.S. __ (2015)
The Supreme Court held in Teva v. Sandoz that the Federal Circuit erred by applying a de novo standard of review, considering the question for the first time and disregarding the decisions below, rather than applying the “clear error” standard to the district court’s factual findings, giving district courts more deference. Rule 52(a) of the Federal Rule of Civil Procedure requires deferential “clear error” review over any findings of fact but the Federal Circuit has consistently reviewed claim construction as conclusions of law that are allowed for de novo review.
The Supreme Court vacated and remanded the Federal Circuit’s decision by a 7-2 vote. The Court explained that in its earlier decision Markman v. Westview Instruments, Inc., 517 U.S. 370 (1996), “the ultimate question of claim construction is for the judge” however “the appellate review of actual matters” still follows an ordinary rule for clear error. Therefore, when it comes to claim constructions based only on evidence intrinsic to the patent such as the claims, specifications, and prosecution history, the Federal Circuit may review de novo. However, extrinsic evidence, such as “background science or meaning of a term in the relevant art during the relevant time period,” must be reviewed for clear error on appeal.
Litigants may now try to shape their arguments in patent cases to either add extrinsic evidence or avoid extrinsic evidence in claim construction to affect their chances on any appeal.
Kimble v. Marvel Entertainment, LLC, 576 U.S. __, 135 S. Ct. 2401 (2015)
The Supreme Court upheld a long-standing precedent set in Brulotte v. Thys Co., a 1964 decision, which restricted the ability of a patent holder from charging a royalty beyond the term of the patent, in Kimble v. Marvel. The issue was that the parties failed to set an end date for the royalties and, apparently, contemplated that the royalties would continue for as long as the product was being sold.
The Supreme Court reasoned that “…when the patent expires, the patentee’s prerogatives expire too, and the right to make or use the article, free from all restriction, passes to the public.” Further, the Court acknowledged that it was sticking with Brulotte under the principle of stare decisis, which provides that the Court should generally stand by prior decisions.
Licensees of patents will want to include other intellectual property, such as trademarks and/or trade secrets, to be licensed and have a step down in the royalty rate upon expiration of patent(s).
Commil USA, LLC v. Cisco Systems, Inc., 135 S. Ct. 1920 (2015)
The Supreme Court held in Commil USA, LLC v. Cisco Systems, Inc. that a defendant’s good-faith belief that a patent is invalid is not a defense to a claim of induced infringement under 35 U.S.C. 271(b). Accordingly, the long-held principle that a patent is presumptively valid outweighs and undermines any belief of invalidity by a defendant, even if it was in good faith.
The Court vacated the Federal Circuit decision, which held that evidence of a good-faith belief of invalidity might negate the intent requirement for induced infringement because a jury may find the defendant did not know that “the induced acts constitute patent infringement.” The Court focused on the difference between infringement and validity; “invalidity is not a defense to infringement, it is a defense to liability.”
Defendants will always want to have a written and competent opinion of counsel as to non-infringement to help defend a claim of willful patent infringement.
2014 International Patent Statistics for Patent Offices Worldwide
The World Intellectual Property Organization (WIPO) posted IP statistics for 2014. The top five technology fields for global patent applications last year were computer technology, electrical machinery, measurement, digital communication, and medical technology. 2.68 million patent applications were filed last year worldwide, a 4.5% increase from 2013, and 1.18 million patents were granted worldwide, a 0.3% increase from 2013. Further, there were 10.2 million patents enforced worldwide in 2014.
