Justia Patents Opinion Summaries

Articles Posted in Antitrust & Trade Regulation
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3M and TransWeb manufacture respirator filters, consisting of “nonwoven fibrous webs.” 3M sued Transweb for infringement of several patents. TransWeb sought a declaratory judgment of invalidity and non-infringement. A jury found the patents to be invalid based on TransWeb’s prior public use of the patented method. In accordance with an advisory verdict from the jury, the district court found the patents unenforceable due to inequitable conduct. An inventor for the patents and a 3M in-house attorney acted with specific intent to deceive the patent office as to the TransWeb materials. The district court awarded approximately $26 million to TransWeb, including trebled attorney fees as antitrust damages. The Federal Circuit affirmed, finding sufficient corroborating evidence to support the finding of prior public use by TransWeb, and that attorney fees are an appropriate basis for damages under the antitrust laws in this context. TransWeb’s attorney fees appropriately flow from the unlawful aspect of 3M’s antitrust violation and are an antitrust injury that can properly serve as the basis for antitrust damages. View "Transweb, LLC v. 3M Innovative Props. Co." on Justia Law

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Magnetar filed suit alleging that Intamin maliciously prosecuted a patent infringement action against it and claiming that Intamin prosecuted the action even though the ‘350 Patent was invalid pursuant to the on-sale bar of 35 U.S.C. 102 (on-sale bar). The district court granted summary judgment to Intamin. The court concluded that a reasonable attorney could have determined that the on-sale bar did not apply due to the genuine dispute concerning whether the magnetic braking system had been (1) offered for sale before the critical date; and (2) was ready for patenting before the critical date. Therefore, the court affirmed as to this issue. The court also affirmed the district court's conclusion that Magnetar has not alleged sufficient facts to show a causal antitrust injury stemming from Intamin’s actions. Finally, the court concluded that the district court properly refused to sanction Magnetar for filing a frivolous action where Magnetar proceeded in good faith in not admitting facts related to the antitrust injury. Accordingly, the court affirmed the district court's judgment in its entirety. View "Magnetar Techs. v. Intamin, Ltd." on Justia Law

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In earlier litigation, Teva challenged the validity and enforceability of GSK’s patents on lamotrigine, Lamictal’s active ingredient. Teva was first to file an FDA application, alleging invalidity or nonenforceability, and seeking approval to produce generic lamotrigine tablets and chewable tablets for markets alleged to be annually worth $2 billion and $50 million,. If the patent suit resulted in a determination of invalidity or nonenforceability—or a settlement incorporating such terms—Teva would be statutorily entitled to a 180- day period of market exclusivity, during which time only it and GSK could produce generic lamotrigine tablets. After the judge ruled the patent’s main claim invalid, the companies settled; Teva would end its patent challenge in exchange for early entry into the chewables market and GSK’s commitment not to produce its own, “authorized generic” Lamictal tablets. Plaintiffs, direct purchasers of Lamictal, sued under the Sherman Act, 15 U.S.C. 1 & 2, claiming that the agreement was a “reverse payment” intended to induce Teva to abandon the patent fight and eliminate the risk of competition in the lamotrigine tablet market for longer than the patent would otherwise permit. The district court dismissed. The Third Circuit vacated, citing Supreme Court precedent, holding that unexplained large payments from the holder of a drug patent to an alleged infringer to settle litigation of the patent’s validity or infringement (reverse payment) can violate antitrust laws. View "King Drug Co of Florence Inc, v. Smithkline Beecham Corp." on Justia Law

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Rapid-prototyping “additive technology” creates parts by building layer upon layer of plastics, metals, or ceramics. Subtractive technology starts with a block and cuts away layers. Additive technology include SL, fused deposition modeling, laser sintering, 3D printing, direct metal laser sintering, and digital light processing. 3DS is the sole U.S. supplier of SL machines, which use an ultraviolet laser to trace a cross section of an object on a vat of liquid polymer resin. The laser solidifies the resin it touches, while untouched, areas remain liquid. After one cross-section has solidified, the newly formed layer is lowered below the surface of the resin. The process is repeated until the object is completed. Users of SL machines often own many machines with varying sizes, speeds, and accuracy levels. 3DS began equipping some of its SL machines with wireless technology that allows a receiver to communicate with a transmitter on the cap of a resin bottle. A software-based lockout feature shuts the machine off upon detection of a resin not approved by 3DD. 3DS has approved two of Desotech’s resins and entered into negotiations for approval of additional resins. After negotiations broke down, Desotech sued, alleging tying, unreasonable restraint of trade, and attempted monopolization under the Sherman Act; tying under the Clayton Act; patent infringement; and violations of the Illinois Antitrust and Uniform Deceptive Trade Practices Acts. The district court granted 3DS summary judgment on the antitrust claims and certain state-law claims. The parties stipulated to dismissal of the remaining claims. The Federal Circuit affirmed.View "DSM Desotech Inc. v. 3D Sys. Corp." on Justia Law

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The Drug Price Competition and Patent Term Restoration Act of 1984 (Hatch-Waxman Act), 21 U.S.C. 355(j)(2)(A)(vii)(IV) established procedures for identifying and resolving patent disputes between brand-name and generic drug manufacturers. One procedure requires a prospective generic manufacturer to certify to the FDA that any listed, relevant patent is invalid or will not be infringed by the manufacture, use, or sale of the generic drug (paragraph IV). Generic manufacturers filed paragraph IV applications for generic drugs modeled after Solvay’s FDA-approved, patented drug AndroGel. Solvay claimed patent infringement, 35 U.S.C. 271(e)(2)(A). The FDA approved the generic product, but the generic companies entered into “reverse payment” settlements, agreeing not to bring the generic to market for a number of years and to promote AndroGel to doctors in exchange for millions of dollars. The FTC sued, alleging violation of section 5 of the Federal Trade Commission Act by agreeing to abandon patent challenges, to refrain from launching low-cost generic drugs, and to share in Solvay’s monopoly profits. The district court dismissed. The Eleventh Circuit affirmed. The Supreme Court reversed and remanded, calling for application of a “rule of reason” approach rather than a “quick look.” Although the anti-competitive effects of the reverse settlement might fall within the exclusionary potential of Solvay’s patent, the agreement is not immune from antitrust attack. It would be incongruous to determine antitrust legality by looking only at patent law policy, and not at antitrust policies. The Court noted the Hatch-Waxman Act’s general pro-competitive thrust, facilitating challenges to a patent’s validity and requiring parties to a paragraph IV dispute to report settlement terms to antitrust regulators. Payment for staying out of the market keeps prices at patentee-set levels and divides the benefit between the patentee and the challenger, while the consumer loses. That a large, unjustified reverse payment risks antitrust liability does not prevent parties from settling their lawsuits; they may settle in other ways, e.g., by allowing the generic to enter the market before the patent expires without payment to stay out prior to that point. View "Fed. Trade Comm'n v. Actavis, Inc." on Justia Law

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The Drug Price Competition and Patent Term Restoration Act of 1984 (Hatch-Waxman Act), 21 U.S.C. 355(j)(2)(A)(vii)(IV) established procedures for identifying and resolving patent disputes between brand-name and generic drug manufacturers. One procedure requires a prospective generic manufacturer to certify to the FDA that any listed, relevant patent is invalid or will not be infringed by the manufacture, use, or sale of the generic drug (paragraph IV). Generic manufacturers filed paragraph IV applications for generic drugs modeled after Solvay’s FDA-approved, patented drug AndroGel. Solvay claimed patent infringement, 35 U.S.C. 271(e)(2)(A). The FDA approved the generic product, but the generic companies entered into “reverse payment” settlements, agreeing not to bring the generic to market for a number of years and to promote AndroGel to doctors in exchange for millions of dollars. The FTC sued, alleging violation of section 5 of the Federal Trade Commission Act by agreeing to abandon patent challenges, to refrain from launching low-cost generic drugs, and to share in Solvay’s monopoly profits. The district court dismissed. The Eleventh Circuit affirmed. The Supreme Court reversed and remanded, calling for application of a “rule of reason” approach rather than a “quick look.” Although the anti-competitive effects of the reverse settlement might fall within the exclusionary potential of Solvay’s patent, the agreement is not immune from antitrust attack. It would be incongruous to determine antitrust legality by looking only at patent law policy, and not at antitrust policies. The Court noted the Hatch-Waxman Act’s general pro-competitive thrust, facilitating challenges to a patent’s validity and requiring parties to a paragraph IV dispute to report settlement terms to antitrust regulators. Payment for staying out of the market keeps prices at patentee-set levels and divides the benefit between the patentee and the challenger, while the consumer loses. That a large, unjustified reverse payment risks antitrust liability does not prevent parties from settling their lawsuits; they may settle in other ways, e.g., by allowing the generic to enter the market before the patent expires without payment to stay out prior to that point. View "Fed. Trade Comm'n v. Actavis, Inc." on Justia Law

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Ethypharm, a French corporation, contracted with Reliant, an American company. Ethypharm would manufacture and provide its drug (Antara®); Reliant would obtain approval and market the drug. Reliant sought FDA approval under 21 U.S.C. 505(b)(2), using data from an approved, fenofibrate drug, TriCor®, developed by Fournier and distributed in the U.S. by Abbott. Antara received approval. Reliant began marketing and sought a declaration of non-infringement or unenforceability of Abbott’s patents. Abbott counterclaimed. In 2006, the companies settled: Abbott and Fournier would license the patents to Reliant and Reliant would pay royaltys. The agreement prohibited Reliant from assigning its rights to or partnering with specific companies. Reliant sold its rights to Oscient, which was not a prohibited purchaser. Losing market share to generic fenofibrate, Oscient discontinued promotion of Antara and filed for bankruptcy. Ethypharm sued Abbott, alleging antitrust and sham litigation under 15 U.S.C. 1, asserting that the settlement agreement was designed to ensure that Antara would be marketed by a company with “limited resources and a relatively small sales force,” so that it could not effectively compete with TriCor and that the royalty payment weakened Antara’s profitability. The district court granted Abbott summary judgment. The Third Circuit vacated, holding that Ethypharm lacked standing under the Sherman Act. View "Ethypharm SA France v. Abbott Labs" on Justia Law

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IGT owns patents related to “wheel games,” casino gaming machines containing a secondary bonus game incorporating a spinning wheel. IGT sued Bally for infringement and Bally counterclaimed under state and federal antitrust laws. The district court denied motions for summary judgment on the antitrust issues, granted the motions that the patents were invalid and not infringed, and certified the patent issues for interlocutory appeal. The Federal Circuit affirmed. On remand, the district court granted summary judgment against Bally on its antitrust counterclaims. The Federal Circuit affirmed, stating that the undisputed facts were insufficient to establish the existence of a relevant antitrust market in wheel games. View "IGT v. Alliance Gaming Corp." on Justia Law

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Under 35 U.S.C. 292(a) it is unlawful to engage in specified acts of false patent marking, such as affixing a mark that falsely asserts that the item is patented, with intent to deceive the public. Prior to 2011, the statute authorized private parties (relators) to bring a qui tam or informer’s suit for violations, but did not specify procedures or authorize the government to file its own suit to collect the penalty. The 2011 AIA eliminated the qui tam provision, but authorized actions for damages by any person “who has suffered a competitive injury as a result of a violation.” The AIA provides that marking products with expired patents is not a violation and that it applies to all pending cases. In 2010, Brooks sued, alleging that Dunlop marked a guitar string winder with the number of a patent that was both expired and invalidated. The AIA was enacted while the case was stayed, pending the outcome in another case. The district court held that the application of the AIA to pending actions did not violate the Due Process Clause and that the legislation rationally furthered a legitimate legislative purpose. The Federal Circuit affirmed. View "Brooks v. Dunlop Mfg., Inc." on Justia Law

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SanDisk allegedly controls the market for NAND flash memory, a computer chip that can be erased and reprogrammed that is widely used in consumer products such as digital cameras, mobile phones, and USB drives. Retailers purchase from SanDisk, the patentee, and its licensees. Ritz filed a class action, alleging that SanDisk violated the Sherman Act, 15 U.S.C. 2 by fraudulently procuring patents by failing to disclose prior art and making misrepresentations to the Patent and Trademark Office and established its monopoly by enforcing patents against competitors and by threatening competitors’ customers. SanDisk asserted that Ritz lacked standing to bring a Walker Process antitrust because Ritz faced no threat of an infringement action and had no other basis to bring a declaratory judgment action challenging the patents. The district court rejected the argument, acknowledging that such claims normally are brought by competitors of the patentee as counterclaims in infringement actions, but noting that the Walker Process decision places no limitation on eligible plaintiffs. On interlocutory appeal, the Federal Circuit affirmed that a direct purchaser is not categorically precluded from bringing a Walker Process antitrust claim, even if it would not be entitled to seek declaratory relief against the patentee under the patent laws. View "Ritz Camera & Image, LLC v. Sandisk Corp." on Justia Law