Federal Circuit Clarifies Scope Of On Sale Bar In Helsinn Healthcare, S.A. v. Teva Pharmaceuticals, USA, Inc.Written by David Roncayolo
In May of 2017, the U.S. Court of Appeals of the Federal Circuit in Helsinn Healthcare, S.A. v. Teva Pharmaceuticals USA, Inc., 855 F.3d 1356, clarified, to some extent, the scope of the on sale bar under the America Invents Act (AIA). The on sale bar invalidates a patent and is triggered if the invention is sold or otherwise offered for sale more than one year prior to the date of the filing of a patent application.
Helsinn owned four related patents (three pre-AIA and one post-AIA) covering a formulation of palonosetron, a drug for cancer patients that treats nausea. Approximately two years before filing a patent application at the USPTO, Helsinn entered into two different agreements for the purchase of the drug with MGI Parma, Inc. The agreements did not specify whether the drug's dosage would be 25 mg or 75 mg. Further, the agreements were contingent upon obtaining FDA approval for the drug.
Subsequently, Teva filed an Abbreviated New Drug Application (ANDA) for a generic equivalent of palonosetron. Helsinn sued Teva for patent infringement under the Hatch-Waxman Act. The trial court found that under the AIA, a secret sale does not invalidate patent, and that the disclosure of the patent needs to be made public to trigger the on sale bar.
On appeal, the Federal Circuit found that all four patents were invalid both under the pre-AIA and post-AIA versions of the one sale bar. The Federal Circuit held that a sale of the patented goods had occurred and that the fact the agreements were contingent upon obtaining FDA approval did not alter this result. Under Pfaff v. Wells Electronics, Inc., 525 US 55 (1988), the on sale bar is triggered if an invention is the subject of a “commercial sale” and is also “ready for patenting.” Traditionally, courts have looked to the UCC to determine if there has been a commercial sale. With regard to the second prong of Pfaff, an invention is ready for patenting when there is actual reduction to practice or when there are appropriate disclosure for an ordinary person skilled in the art to practice the invention.
Following the Pfaff analysis, the Federal Circuit held that post-AIA, the details of an invention need not be revealed to the public to trigger the on sale bar. It is sufficient that there be a public sale. Here, the Federal Circuit also found that the present invention was ready for patenting notwithstanding the fact that further testing was being conducted. The Federal Circuit did not, however, address whether a private sale implicates the on sale bar under the AIA. This decision has significant repercussions because public transactions for the commercialization of an invention can trigger the on sale bar, even if the transaction itself does not disclose the details of the product or invention.
On June 19, 2017, the Supreme Court issued a landmark opinion, holding that the First Amendment’s right to free speech extends to trademark protection of words and phrases that are purportedly offensive.
For over half a century, trademark law prohibited registration of marks that were prejudicial to or could otherwise be deemed disparaging to certain groups or people. Significantly, however, in Matal v. Tam, 137 S. Ct. 1744 (2017), an Asian-American band specifically chose the name “Slants,” believing “that by taking that slur as the name of their group, they [would] help to ‘reclaim’ the term and drain its denigrating force.” Id. at 1751. After the en banc Federal Circuit found that the disparagement clause under the Lanham Act was facially unconstitutional, the United States Patent and Trademark Office filed a petition for certiorari, which the Supreme Court granted in order to weigh in on the disparagement clause at issue, and whether the proposed trademark was official words endorsed by the government, or conversely, words of a private person.
In its unanimous decision, the high court answered this question by declaring that “[t]rademarks are private, not government speech…[and] [t]he public expression of ideas may not be prohibited merely because the ideas are themselves offensive to some of their hearers.” Id. at 1760 (internal citation omitted). The Court also expressed concern with broadening the government speech doctrine, and in affirming the Federal Circuit’s judgment, held that that “if private speech could be passed off as government speech by simply affixing a government seal of approval, government could silence or muffle the expression of disfavored viewpoints.” Id. at 1748.
Tam may very well have wide reaching effects. While the Supreme Court made clear that a word or phrase in a trademark registration will not constitute government speech, the aftermath of this decision could give rise to various potentially “offensive” or “disparaging” trademark applications, which may ultimately rest with the consumer in determining whether to accept or reject the mark in its use in commerce.
Because many issues can arise in applying for a trademark, Malloy and Malloy, P.L’s knowledgeable and experienced intellectual property attorneys are ready to advise and guide you along the way from an application through registration, and subsequent enforcement measures.
On May 22, 2017, the United States Supreme Court in TC Heartland LLC v. Kraft Foods Group Brands LLC, 581 U.S. ___ (2017) narrowed the scope of where a corporate defendant “resides” for venue purposes under the patent venue statute (28 U.S.C. § 1400(b)). Previously, patent plaintiffs could sue corporate defendants in any district court where the corporation was subject to personal jurisdiction, essentially where a defendant sold products. However, and as a result of TC Heartland’s unanimous (8-0) decision reversing the Federal Circuit, 28 U.S.C. § 1400(b) remains the only applicable patent venue statute, and as applied to domestic corporations in patent cases, a “defendant resides only in the state of its incorporation.”
A number of results are likely in the wake of this dramatic shift in venue law. First, TC Heartland presents a significant roadblock to patentees filing lawsuits in a particular forum – which critics label “forum shopping” -- simply because a corporate defendant placed a product into the stream of commerce. The inevitable outcome will steer the filing of patent cases to Delaware, the state where many U.S. companies are incorporated. Second, and where litigation is already pending, corporate defendants are likely to file motions to change venue (assuming the waivable defense of venue has been properly preserved).
Third, and as alternative to filing suit in the defendant’s state of incorporation, plaintiffs’ attorneys may file suit in a forum that instead satisfies the second prong of 28 U.S.C. § 1400(b), “where the defendant has committed acts of infringement and has a regular and established place of business.” While the Federal Circuit has interpreted this phrase to mean doing business “through a permanent and continuous presence,” parties will surely battle over the confines of the pertinent statutory language, and litigate factors such as physical stores of the business, where key personnel are located, and the business’ online presence. Fourth, situations may arise where there is no district court in which venue would be proper for all named defendants. To avoid risking inconsistent rulings from litigating cases in separate districts, expect to see an increase in multi-jurisdiction litigation (“MDL”), which can serve as a useful vehicle in litigating overlapping issues in pretrial proceedings, with the individual cases referring back to the original court for trial.
Many issues in the field of patent law will arise in the aftermath of TC Heartland. Malloy and Malloy, P.L’s knowledgeable and experienced intellectual property lawyers are ready to advise you and guide your case as these issues come to the forefront.
In the case of TC Heartland LLC v. Kraft Foods Group Brands LLC, the United States Supreme Court issued an opinion that is likely to limit the universe of available venues in which a patent holder can bring an action for infringement. Under the particular patent venue statute, the appropriate venue for patent infringement is anywhere infringement has occured, as long as the accused infringer has a regular and established place of business, or where the accused infringer "resides." In the context of a corporation, the definition of residing had been open to interpretation, but the TC Heartland opinion made explicit that residence under the patent venue statute refers only to the state of incorporation.
Malloy and Malloy successfully obtains judgment against Sears, Kmart, and other defendants on behalf of client Merit Diamond in copyright and trade dress infringement caseWritten by Malloy & Malloy
Firm Attorneys Peter Matos, Meredith Mendez and Jonathan Woodard were successful in enforcing the valuable intellectual property rights of well-known jeweler Merit Diamond Corporation related to its highly successful Sirena® Collection in federal court in Miami, Florida. Merit sued Defendants, Sears, Roebuck & Co., Sears Holdings Management Corporation, Sears Brands, LLC, Kmart Operations LLC, Kmart Corporation, iStar Jewelry LLC, Yelnats, Inc., and Stanley Creations, Inc. for copyright and trade dress infringement due to their sale and manufacture of infringing jewelry. The Court entered a Judgment upon consent in favor of Merit requiring the Defendants to pay Merit Diamond the amount of $90,000 and permanently cease all manufacture, distribution, and sale of the infringing products. http://bit.ly/2qT9pwg
The 11th Circuit Reaffirms its Position that a Copyright Registration is a Precondition to Filing an Infringement ActionWritten by Meredith Frank Mendez
The 11th Circuit in Fourth Estate Public Benefit v. Wall-Street.com, LLC, No. 16-13726 (11th Cir. 2017) has reaffirmed its position that a copyright owner cannot file a copyright infringement lawsuit unless the Register of Copyrights registers the copyright in the works at issue.
Although registration is not required to own a copyright, it is required for a copyright owner to enforce its rights in court in a copyright infringement action. The Copyright Act provides that “registration” of a copyright is a precondition to filing suit for copyright infringement. 17 U.S.C. § 411(a).
In Fourth Estate, the plaintiff filed an application to register its works, although the Register of Copyrights did not register the works. The Court held that “registration” occurs when the Register of Copyrights registers the copyright and not merely when an owner files an application to register the copyright. Therefore, the Court affirmed the district court’s dismissal of the plaintiff’s complaint on the basis that it failed to plead compliance with the registration requirement of 17 U.S.C. § 411(a).
This decision represents a split in authority among the circuits as some circuits such as the Ninth and Fifth Circuits follow the “application approach”, which requires a copyright owner to file the deposit, application, and fee required for registration before filing a suit for infringement.
The U.S. Supreme Court ruled in Star Athletica v. Varsity Brands, that decorative elements of a cheerleading uniform are protectable by copyright law, a ruling the Court said was aimed at resolving "widespread disagreement" on when such designs are eligible for protection. The decision bolsters the legal protections for pictures, sculptures and graphic designs. The case examined the limits of copyright protection for clothing, furniture and other useful items that can have both functional and distinctive ornamental aspects. The Court reasoned that the cheerleader uniform design met the test of being able to "exist as its own pictorial, graphic, or sculptural work" and that it was eligible for copyright protection when it was separated from the utilitarian article. The ruling could have expansive implications for designers in the fashion industry, who seek to protect ornamental designs that are affixed on useful articles like clothing.