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Patent Law Summaries
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Davison to Pay $26M to Settle FTC's Invention Fraud Charges in PA Court
Federal Trade Commission v. Davison & Associates, Inc. et al.
No. 97-1278,
U.S. District Court for the Western District of Pennsylvania, 07/08/2008
Holding: The Federal Trade Commission ("FTC") announced on July 18, 2008 that in a consent order approved by the U.S. District Court for the Western District of Pennsylvania, the owners of an invention promotion operation have agreed to pay $10 million in consumer redress to settle FTC charges that they deceived consumers across the country. The settlement includes a cash payment of $6.9 million, plus other property valued at $3.1 million. The defendants are Davison Design and Development, Inc., formerly known as Davison & Associates, Inc., and its principal, George M. Davison III; Manufacturer's Support Services, Inc. and its principal, Gordon M. Davison, and his wife, Barbra M. Davison; and relief defendant Barbara L. Davison, who is George M. Davison's wife. Under the settlement, in connection with providing research, patent, marketing, and/or invention promotion services, defendants cannot misrepresent that they are selective in accepting inventors, and that they have a stake in an invention because they "work for free" and/or receive significant income from royalties. They are also prohibited from misrepresenting how many consumers have contracted with them, how many of those consumers realized a net profit, or how many product licenses they obtained for consumers. Earlier, after trial, the district court entered a $26 million judgment in favor of the FTC against defendants, except that it limited Barbra M. Davison's liability to $8 million and imposed no liability on Barbara L. Davison. The settlement ends the litigation between the FTC and the defendants. More...
TX District Court Denies Boston Scientific’s Motion to Overturn $501M Jury Award in Drug-Eluting Stent Patent Case
Saffran v. Boston Scientific Corp.
No. 2-05-CV-547 (TJW),
U.S. District Court for the Eastern District of Texas, 07/09/2008
Holding: The U.S. District Court for the Eastern District of Texas denied Boston Scientific Corp.’s (“BSC”) motion for a new trial after a jury awarded $501.26 million in actual damages and prejudgment interest to a medical doctor who owned a patent relating to drug-eluting stent. BSC had asked the district court to order a new trial on damages because the jury verdict was against the great weight of evidence. Specifically, BSC argued that patent-holder Dr. Bruce Saffran’s damages theory was largely based on the assumption that the subject matter claimed in the patent was a significant invention that was necessary to make a drug-eluting stent. BSC claimed that it provided evidence and testimony that more than one hundred companies chose not to license the patent at issue and that Saffran made no significant contributions to the industry. But the district court rejected BSC’s arguments, ruling that the jury found Saffran’s evidence more credible, and the court may not supplant its judgment for the jury’s finding where the evidence in the record supported the jury’s verdict. Consequently, the district court held that the damages award should stand. More...
Jury Awards Elan $55M in Breast Cancer Drug Patent Suit, But Abraxis Bioscience Vows to Fight On
Elan Pharmaceutical International Ltd. v. Abraxis BioScience Inc.
06CV438,
U.S. District Court, District of Delaware (Wilmington), 06/13/2008
Holding: A jury sitting in the Delaware district court found that Abraxis Bioscience’s drug Abraxane literally infringed Elan Pharmaceutical’s patent relating to metastatic breast cancer treatment, awarding the patentee damages in the amount of $55.23 million and fixing the applicable royalty rate used to calculate damages at 6 percent. The jury also ruled that this patent, as well as another related one, was valid and enforceable. The jury came out with the verdict after deliberating for about 12 hours at the end of an eight-day trial. Abraxis Pharmaceutical later issued a public statement, stating that it would pursue post-trial motions and appeal the adverse decision.
More...
Pfizer and Ranbaxy Settle Lipitor Patent Litigation Worldwide
Pfizer Inc., et al. v. Ranbaxy Laboratories Ltd., et al.
No. 08cv164,
U.S. District Court District of Delaware (Wilmington), 06/18/2008
Holding: U.S. drug maker Pfizer, Inc. and generics manufacturer Ranbaxy Laboratories Ltd. of India and certain of its affiliates agreed to settle substantially all their patent litigation worldwide involving Lipitor, the world’s most-prescribed cholesterol-lowering medicine. Under the terms of the agreement, Ranbaxy will have a license to sell generic versions of Lipitor and Caduet in the United States effective November 30, 2011. Caduet is a medicine that combines the active ingredients of Lipitor and Norvasc and treats both high blood pressure and high cholesterol. The lawsuits between Pfizer and Ranbaxy regarding Lipitor and Caduet will be dismissed in specified countries, and Ranbaxy will no longer contest the validity of Pfizer’s patents in these countries, including the United States, according to the agreement. The settlement also resolved all patent litigation with Ranbaxy relating to Accupril in the United States and Viagra in Ecuador. More...
Federal Jury Awards Smith & Nephew $14.7M for Infringement in Patent Suit against Rival Arthrex
Smith & Nephew, Inc., et al. v. Arthrex, Inc.
Case No. CV 04-029 MO,
U.S. District Court for the District of Oregon, 06/11/2008
Holding: A jury sitting in a district court in Oregon awarded a total of $14.7 million to Smith & Nephew, Inc. after finding that its rival medical device maker Arthrex, Inc. had infringed its ‘557 patent on a line of suture anchors. Specifically, the jury found that Arthrex indirectly infringed the patent by selling and marketing its own products named PEEK Suture Talk, PEEK PushLock anchors, and Bio PushLock anchors, and that such infringement was willful. The total award consisted of $4.79 million as lost profit damages, and $9.91 million as reasonable royalty damages. More...
Patent Law Commentaries
Following are Patent Law Commentaries elaborating on the significance of the most important of the Patent Law Summaries.
Quanta Computer v. LG Electronics: Reviving Exhaustion, Applying It to Method Patents
Quanta Computer v. LG Electronics
Posted: 08/15/2008
Commentary: In the case Quanta Computer v. LG Electronics, ___ U.S. ____, 128 S.Ct. 2109 (2008), the United States Supreme Court clarifies and expands upon its holding in United States v. Univis Lens Co. In Univis, the court held that a patent is exhausted upon the sale of unfinished components that substantially embody the patent and which have no use except to practice the patent. In Quanta, the court clarified that the same analysis applies to process or method patents, not just product patents: When a component substantially embodies the process and cannot be used for any purpose other than to practice the patent, the process patent is exhausted upon sale of that component. The decision makes it more difficult for patentees to extract royalties from multiple parties for the same device. However, it revitalizes the integrity of the exhaustion doctrine and provides more certainty for downstream purchasers. More...
Related summary: Supreme Court Reverses Federal Circuit’s Ruling, Finds in Favor of Quanta in LG’s Computer Technology Patent Suit
Acumed II Addresses the Issue of Claim Preclusion and When a Patent Claim Could Have Been Brought
Acumed, LLC v. Stryker Corp., et al.
Posted: 05/20/2008
Commentary: In the recent case of Acumed, LLC v. Stryker Corp.,et al., (No. 2007-1115) (Fed. Cir., May 13, 2008) (“Acumed II”), the Federal Circuit addressed the meaning and application of language barring re-litigation of claims that “could have been brought” in a prior patent infringement case. More...
Related summary: Federal Circuit Reverses District Court’s Ruling in Acumed v. Stryker, Remands Case
Agrizap and Ortho-McNeil: Two Sides of Post-KSR Obviousness
Ortho-McNeil Pharmaceutical, Inc. v. Mylan Laboratories, Inc., et al.
Posted: 05/16/2008
Commentary: In KSR v. Teleflex, 550 U.S. ____, 127 S. Ct. 1727 (2007), the U.S. Supreme Court broadened the applicable test in determining whether an invention is “obvious.” As predicted by patent law pundits, the KSR decision was followed by a number of cases in which infringers defended their actions – and won – by having the patent in question declared invalid for obviousness under this new standard. The Court of Appeals for the Federal Circuit (the CAFC) recently heard and decided two separate cases that addressed the issue of obviousness post-KSR. These cases shed further light on the new standard for determining obviousness. While the results are quite different, the lessons for practitioners are, ultimately, the same. More...
Related summary: Federal Circuit Affirms Validity of Ortho-McNeil’s Patent On Epilepsy Drug Topomax
Judkins v. HT Window Fashion: Can’t Stop a Patent Holder from Contacting Your Clients About Possible Infringement
Judkins v. HT Window Fashion Corp.
Posted: 05/13/2008
Commentary: When a patent-holder discovers infringement, it’s not unreasonable for him to want to notify the alleged infringer’s clients of the infringement. Of course the alleged infringer would prefer that this communication with its clients not take place. But, as the Judkins case instructs, it will be nearly impossible for an alleged infringer to stop a patent holder from contacting its clients. More...
Related summary: Patent Owners Allowed to Warn Buyers about Competitor's Infringing Products: Judkins v. HT Window Fashion Corp.
Tafas v. Dudas: USPTO’s Efforts to Limit Patent Applicant Rights Are Void
Tafas v. Dudas, et al.
Posted: 05/12/2008
Commentary: In an effort to attack its notorious backlog, the USPTO enacted a group of rule changes that placed limits on, among other things, the number of claims a patent applicant could include and the number of times an applicant could amend and continue his application. Traditionally, patent applicants could take unlimited bites at the apple in their pursuit of their patent. In Tafas, the court struck down the rule changes as null and void, and exceeding the scope of the USPTO’s authority. While the Office has the power to enact procedural rules regarding the process, it cannot enact substantive rules – these rules are substantive since they dramatically alter existing policy and the rights and obligations of patent applicants. More...
Related summary: USPTO Rules Are Void For Being Contrary to Law, VA District Court Declares
