Articles Posted in US Supreme Court

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WesternGeco owns patents for a system used to survey the ocean floor. ION sold a competing system, built from components manufactured in the U.S., then shipped abroad for assembly into a system indistinguishable from WesternGeco’s. WesternGeco sued for patent infringement, 35 U.S.C. 271(f)(1) and (f)(2). The jury awarded WesternGeco royalties and lost profits under section 284. The Supreme Court reversed the Federal Circuit, holding that WesternGeco’s award for lost profits was a permissible domestic application of section 284 of the Patent Act, not an impermissible extraterritorial application of section 271. To determine whether the case involves a domestic application of the statute, courts must identify the statute’s "focus” and ask whether the conduct relevant to that focus occurred in U.S. territory. If so, the case involves a permissible domestic application of the statute. When determining the statute’s focus, the provision at issue must be assessed in concert with other provisions. Section 284, the general damages provision, focuses on “the infringement.” The “overriding purpose” is “complete compensation” for infringements. Section 271 identifies several ways that a patent can be infringed; to determine section 284’s focus in a given case, the type of infringement must be identified. Section 271(f)(2) was the basis for WesternGeco’s claim and damages. That provision regulates the domestic act of “suppl[ying] in or from the United States,” and vindicates domestic interests, The focus of section 284 in a case involving infringement under section 271(f)(2) is the act of exporting components from the U.S., so the relevant conduct occurred in the U.S. Damages are not the statutory focus but are merely the means by which the statute remedies infringements. The overseas events giving rise to the lost-profit damages here were merely incidental to the infringement. View "WesternGeco LLC v. ION Geophysical Corp." on Justia Law

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SAS sought inter partes review (35 U.S.C. 311(a)) of ComplementSoft’s software patent, alleging that all 16 of the patent’s claims were unpatentable. The Patent Office instituted review on some of the claims and denied review on the rest. The Federal Circuit rejected SAS’s argument that section 318(a) required the Board to decide the patentability of every claim challenged in the petition. The Supreme Court reversed. When the Patent Office institutes an inter partes review, it must decide the patentability of all of the claims the petitioner has challenged. Section 318(a), which states that the Board “shall issue a final written decision with respect to the patentability of any patent claim challenged by the petitioner” is mandatory and comprehensive. The Director’s claimed “partial institution” power (37 CFR 42.108(a)) appears nowhere in the statutory text. The statute envisions an inter partes review guided by the initial petition. While section 314(a) invests the Director with discretion on whether to institute review, it does not invest him with discretion regarding what claims that review will encompass. 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. View "SAS Institute Inc. v. Iancu" on Justia Law

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SAS sought inter partes review (35 U.S.C. 311(a)) of ComplementSoft’s software patent, alleging that all 16 of the patent’s claims were unpatentable. The Patent Office instituted review on some of the claims and denied review on the rest. The Federal Circuit rejected SAS’s argument that section 318(a) required the Board to decide the patentability of every claim challenged in the petition. The Supreme Court reversed. When the Patent Office institutes an inter partes review, it must decide the patentability of all of the claims the petitioner has challenged. Section 318(a), which states that the Board “shall issue a final written decision with respect to the patentability of any patent claim challenged by the petitioner” is mandatory and comprehensive. The Director’s claimed “partial institution” power (37 CFR 42.108(a)) appears nowhere in the statutory text. The statute envisions an inter partes review guided by the initial petition. While section 314(a) invests the Director with discretion on whether to institute review, it does not invest him with discretion regarding what claims that review will encompass. 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. View "SAS Institute Inc. v. Iancu" on Justia Law

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Oil States sued Greene's Energy for infringement of a patent relating to technology for protecting wellhead equipment used in hydraulic fracturing. Greene’s challenged the patent’s validity in court and petitioned the Patent Office for inter partes review, 35 U.S.C. 311-319. The district court issued a claim-construction order favoring Oil States; the Board concluded that Oil States’ claims were unpatentable. The Federal Circuit rejected a challenge to the constitutionality of inter partes review. The Supreme Court affirmed. Inter partes review does not violate Article III. Congress may assign adjudication of public rights to entities other than Article III courts. Inter partes review falls within the public-rights doctrine. Patents are “public franchises” and granting patents is a constitutional function that can be carried out by the executive or legislative departments without “judicial determination.’ Inter partes review involves the same basic matter as granting a patent. Patents remain “subject to [the Board’s] authority” to cancel outside of an Article III court. The similarities between the procedures used in inter partes review and judicial procedures does not suggest that inter partes review violates Article III. The Court noted that its decision “should not be misconstrued as suggesting that patents are not property for purposes of the Due Process Clause or the Takings Clause.” When Congress properly assigns a matter to adjudication in a non-Article III tribunal, “the Seventh Amendment poses no independent bar to the adjudication of that action by a nonjury factfinder.” View "Oil States Energy Services, LLC v. Greene's Energy Group, LLC" on Justia Law

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Oil States sued Greene's Energy for infringement of a patent relating to technology for protecting wellhead equipment used in hydraulic fracturing. Greene’s challenged the patent’s validity in court and petitioned the Patent Office for inter partes review, 35 U.S.C. 311-319. The district court issued a claim-construction order favoring Oil States; the Board concluded that Oil States’ claims were unpatentable. The Federal Circuit rejected a challenge to the constitutionality of inter partes review. The Supreme Court affirmed. Inter partes review does not violate Article III. Congress may assign adjudication of public rights to entities other than Article III courts. Inter partes review falls within the public-rights doctrine. Patents are “public franchises” and granting patents is a constitutional function that can be carried out by the executive or legislative departments without “judicial determination.’ Inter partes review involves the same basic matter as granting a patent. Patents remain “subject to [the Board’s] authority” to cancel outside of an Article III court. The similarities between the procedures used in inter partes review and judicial procedures does not suggest that inter partes review violates Article III. The Court noted that its decision “should not be misconstrued as suggesting that patents are not property for purposes of the Due Process Clause or the Takings Clause.” When Congress properly assigns a matter to adjudication in a non-Article III tribunal, “the Seventh Amendment poses no independent bar to the adjudication of that action by a nonjury factfinder.” View "Oil States Energy Services, LLC v. Greene's Energy Group, LLC" on Justia Law

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The Biologics Price Competition and Innovation Act, concerning FDA approval of a drug that is biosimilar to an already-licensed biological “reference product,” 42 U.S.C. 262(k), treats submission of a biosimilar application as an “artificial” patent infringement. An applicant must provide its biosimilar application and manufacturing information to the reference product’s sponsor. The parties collaborate to identify patents for immediate litigation. Second phase litigation is triggered when the applicant gives the sponsor notice at least 180 days before commercially marketing the biosimilar. Amgen claims patents on methods of manufacturing and using filgrastim. Sandoz sought FDA approval to market a biosimilar, Zarxio, and notified Amgen that it had submitted an application, that it intended to market Zarxio immediately upon receiving FDA approval, and that it did not intend to provide application and manufacturing information. Amgen sued for patent infringement and asserted that Sandoz engaged in “unlawful” conduct under California law by failure to provide its application and manufacturing information and by notification of commercial marketing before obtaining FDA licensure. The FDA licensed Zarxio. Sandoz provided Amgen another notice of commercial marketing. The Supreme Court unanimously held that section 262(l)(2)(A) is not enforceable by injunction under federal law, but the Federal Circuit should determine whether a state-law injunction is available. Submitting an application constitutes artificial infringement; failing to disclose the application and manufacturing information does not. Section 262(l)(9)(C) provides a remedy for failure to turn over the application and manufacturing information, authorizing the sponsor, but not the applicant, to bring an immediate declaratory-judgment action, thus vesting in the sponsor the control that the applicant would otherwise have exercised over the scope and timing of the patent litigation. An applicant may provide notice under section 262(l)(8)(A) before obtaining FDA licensure. View "Sandoz Inc. v. Amgen Inc." on Justia Law