• Federal Circuit vacates PTAB decision for failure to explain reason claims were invalid

    Unlike the Board’s anticipation determinations, which contravened the only permissible findings that could be drawn from the prior art under the proper constructions of the relevant claim terms, the obviousness determinations involved “potentially lawful but insufficiently or inappropriately explained” factual findings. In re Van Os, 844 F.3d 1359, 1362 (Fed. Cir. 2017). The Board failed to explain its reasoning to allow the Court to determine whether its findings would be lawful. When faced…

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  • Volvo Car Group is Seeking an Associate IP Counsel in Gothenburg, Sweden

    The Volvo Car Group is seeking to hire an Associate IP Counsel for its Gothenburg, Sweden location.  Volvo Car Group IP is a global support function providing IP support to all companies and business units within the Volvo Car Group, including but not limited to IP aspects connected to patents, trademarks, design, copyright, R&D agreements, purchase agreements as well as other commercial agreements. IP is also in charge of developing and maintaining the Volvo Cars IP portfolio, and to…

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  • Aatrix Software, Inc. v. Green Shades Software, Inc. (Fed. Cir. 2018)

    By Michael Borella — Aatrix brought an infringement action against Green Shades in the Middle District of Florida, alleging infringement of U.S. Patent Nos. 7,171,615 and 8,984,393. Green Shades filed a 12(b)(6) motion to dismiss on the grounds that all asserted claims were not eligible for patent under 35 U.S.C. § 101. The patents in suit are directed to “designing, creating, and importing data into a viewable form on a computer so that a user can manipulate the form data and create viewable forms and reports.” In particular, a “form file is created using in-house form development tools and is…

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  • Conference & CLE Calendar

    February 20, 2018 – “Patent-Eligibility in 2018: Current Status and Best Practices” (McDonnell Boehnen Hulbert & Berghoff LLP) – 10:00 am to 11:15 am (CT) February 20, 2018 – “Managing and Defending Against Patent Infringement Lawsuits: Best Strate…

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  • DNJ analyzes "puffery" in WILLIAM T. HOEY v. INSMED INCORPORATED

    On the subject of “puffery,” note a recent decision in the District of New Jersey in the case
    WILLIAM T. HOEY v. INSMED INCORPORATED, 2018 U.S. Dist. LEXIS 24907, which included text:


    Lead Plaintiff Bucks County Employees Retirement Fund (“Plaintiff”) brings this putative class action, on behalf of itself and all other similarly situated individuals and entities, against Insmed Incorporated (“Insmed”), a biopharmaceutical company, as well as Insmed’s Chief Executive and Financial Officers, William H. Lewis (“Mr. Lewis”) and Andrew T. Drechsler (“Mr. Drechsler”), respectively, alleging violations under various provisions of the applicable federal securities laws.1 Plaintiff’s action is based on Defendants’ alleged misrepresentations and omissions in connection with Insmed’s target drug, Arikayce, and the results of its Phase 2 Trial, which, ultimately, failed to support regulatory approval. In the instant matter, Defendants moves for dismissal of the Amended Complaint, arguing, inter alia, that the challenged representations are not actionable because a duty to disclose was absent, the material statements constitute permissible opinions or corporate puffery, and Plaintiff has failed to adequately plead scienter. For the reasons set forth below, Defendant’s Motion to Dismiss is GRANTED.

    There is relevance to Bridgewater, New Jersey: Insmed, a publically traded biopharmaceutical company, principally located in Bridgewater, New Jersey, specializes in the development and commercialization of inhaled therapies for patients with serious lung diseases.

    Further, as to puffery:


    In addition, like forward-looking statements, opinions, and beliefs, a defendant may not be held liable for an alleged misrepresentation that consists of nothing more than vague and nonspecific expressions of corporate optimism. In re Advanta, 180 F.3d at 538. Such statements “constitute no more than ‘puffery’ and are understood by reasonable investors as such.” Id. (quoting Burlington, 114 F.3d at 1428 n. 14). Thus, if a false or misleading statement is “too vague to ascertain anything on which a reasonable investor might rely,” it is inactionable as corporate [*25] puffery. In re Aetna, 617 F.3d at 284.

    (…)

    As articulated by the Third Circuit, material representations contrasted with statements of subjective analysis or extrapolations, such as opinions, motives and intentions, or general statements of optimism, “constitute no more than ‘puffery’ and are understood by reasonable investors as such.” In re Aetna, 617 F.3d at 283 (internal quotations and citation omitted). In the same vein, “[a] representation is immaterial if the statement at issue is too vague to be actionable,” and, in turn, cannot form the basis of a claim for securities fraud. Id. (internal quotations and citations omitted).

    (…)

    Likewise, Plaintiff fails to state a claim under the second subset of statements, wherein Insmed merely described the EMA as, inter alia, “collaborative and supportive,” as well as “enthusiastic” about the results of the trial. Based on Plaintiff’s pleadings, it appears that “support” and “enthusiasm” were expressed by the EMA during the applicable time period. In fact, Insmed, following discussions with the EMA, was confident in submitting an MAA based solely on the Phase 2 Trial, which was not initially intended to support regulatory approval. That decision, which was made after Insmed’s discussions with the EMA, is suggestive of Insmed’s positive interactions with that agency. These representations, therefore, cannot serve as a basis for Plaintiff’s securities claims. Gillis, 197 F. Supp. 3d at 589 (holding that the challenged statements [*52] were statements of opinion, because they did not “address[] existing objective facts,” but rather “express[ed] [the defendants’] views, either as to the FDA’s actions and communications, or as to [its drug’s] prospects.”); Kleinman, 706 F.3d at 153 (“We have also held that words like ‘encouraging’ are the type of ‘expressions of puffery and corporate optimism’ that do not generally ‘give rise to securities violations.'”) (quoting Rombach v. Chang, 355 F.3d 164, 174 (2d Cir. 2004))).

    Lastly, the third group of statements, with respect to Arikayce’s approvability, are both forward looking and inactionable as corporate puffery. For instance, the statement, given by Mr. Lewis during Insmed’s first investor conference in March of 2015, reads, in pertinent part: “I think one of the nice things about this company two and a half years ago when I had the privilege to talk to the board and to look at the opportunity was, I saw an approvable drug, bottom line.” Pl.’s Opp’n, at 14; AC ¶ 50. This statement suffers from the same flaw in Plaintiff’s previous arguments; in demonstrating falsity, Plaintiff references concerns which were raised after the fact. And, more to the point, a reasonable investor would not rely on this statement. Indeed, it clearly embodies the opinion [*53] of Mr. Lewis, and amounts to nothing more than a “gut feeling” stemming from a vaguely described interaction with Insmed’s corporate board, at a time before conducting a Phase 2 Trial. Statements of this kind are a paradigm of corporate puffery, and, therefore, they cannot serve as the basis for § 10(b) liability. Vallabhaneni v. Endocyte, Inc., No. 14-1048, 2016 U.S. Dist. LEXIS 673, at *47 (S.D. Ind. Jan. 4, 2016) (“Courts frequently consider loosely optimistic statements that are so vague, so lacking in specificity, or so clearly constituting the opinions of the speaker that no reasonable investor could find them important to the ‘total mix of information available’ to be immaterial as a matter of law.” (internal citation omitted)); Lopez v. CTPartners Exec. Search, Inc., 173 F. Supp. 3d 12, 28 (S.D.N.Y. 2016) (holding that statements which are “so broad and nebulous as to not provide any specific or concrete guarantee” are not relied on by reasonable investors); Medimmune, 873 F. Supp. at 964 (“Mere expressions of hope or expectation regarding future approval, not worded as guarantees, are not actionable.”)

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  • US District Court of Delaware rules against Merck in case related to hepatitis C drugs Sovaldi and Harvoni

    On 16 February 2018, U.S. District Judge Leonard Stark of D. Delaware overturned a $2.54 billion jury verdict against Gilead and instead ruled that Merck’s patent, asserted against hepatitis C drugs Sovaldi and Harvoni, was invalid.

    Of past events, see Merck wins $2.54 billion in hepatitis C drug trial against Gilead from 16 Dec 2016:


    Merck on Thursday was awarded $2.54 billion in royalties by a federal jury in a patent lawsuit against Gilead Sciences over Gilead’s blockbuster hepatitis C drugs Sovaldi and Harvoni.

    (…)

    Harvoni’s list price is $1,125 per pill and $94,500 for a 12-week regimen. Foster City, California-based Gilead, one of the world’s largest biotechnology companies, made nearly $20 billion on the two drugs in 2015.

    See also a piece by MICHAEL HILTZIK in the October 26, 2017 Los Angeles Times:


    To begin with, the evidence that Gilead itself uses its profits to “innovate” is thin at best. In 2016, the company reported profit of $13.5 billion. It spent $11 billion to repurchase its own shares, and about $2.5 billion on stock dividends. So the buybacks and dividends together came to $13.5 billion, in effect consuming 100% of the company’s profit.

    All that spending benefits shareholders — the repurchases prop up the value of their shares and enhance their gains when they sell, and dividends are, of course, a direct payout. Innovation? Gilead spent $5 billion on research and development, according to its annual report.

    In 2015, a similar phenomenon reigned. Gilead recorded $18.1 billion in profit, and spent $10 billion of it on buybacks and $1.87 billion on dividends. R&D cost $3 billion. Since 2011, the Gilead board has authorized stock repurchases totaling $37 billion, of which $9 billion was still unspent as of the end of 2016. Gilead declined to comment for this column.

    Gilead doesn’t do much research and development itself. Instead, it has acquired firms that have done the heavy lifting and market their successes. It acquired its blockbuster hepatitis C drug, Sovaldi, by paying $11 billion for the drug’s developer, Pharmasset, in 2011.

    (…)
    Gilead rationalized the price by noting that the near-term cure of hepatitis C meant even greater savings over time from a reduction in liver disease; but that was cold comfort to public budget makers and private insurers. They were faced with the prospect of laying out millions of dollars in a single year for benefits that would appear over decades, often reaped by other insurers or programs.

    The near-term consequences included rules that limited approvals for the new drug to the sickest patients — ironically, those who probably would benefit from Sovaldi the least. Because of the price, potentially millions of hepatitis sufferers went without a cure, if temporarily, until the company and insurers were able to work out discounts.

    Evidence produced in 2015 by the Senate Finance Committee showed that Gilead executives didn’t spend much time on the consequences for patients deprived of the cure by budgetary pressures. Instead, they calculated how high they could set the price of Sovaldi without shrinking its potential market so much that total profits would fall. The executives concluded that Gilead could make a profit by charging $55,000 per 12-week treatment. But the company decided to charge $84,000, which would deliver higher profits, albeit from fewer patients. A follow-on drug known as Harvoni, which incorporates Sovaldi, was introduced in 2016 at a price close to $100,000 for a full treatment.

    Gilead at first refused to offer anything but minimal discounts to big insurers and Medicaid programs, even though they acknowledged that thousands of patients might have to go without the treatments. The company didn’t seem concerned about a public backlash over its pricing, figuring that complaints from patient advocates wouldn’t lead to problems with regulators or legislators. “Let’s not fold to advocacy pressure … whatever the headlines,” one top executive counseled his colleagues.

    It’s certainly true that drug development doesn’t come cheap. But there’s reason to believe it doesn’t cost nearly what the industry claims, and no reason to believe that the enormous profits reaped on some drugs get funneled back into research and development. When drug companies have a potential blockbuster in hand, they’ll charge whatever the market will bear to maximize profits. And funding “innovation” isn’t always the goal.

    BUT, Business Monitor Online discussed the cost of a drug being successful:


    Since 2015, Gilead’s revenue has been decreasing, following the decline of its highly successful hepatitis C virus (HCV) portfolio. The medication’s high cure rates reduced the patient pool, and pricing pressures rose due to greater levels of competition. Indeed, the firm’s total revenue has decreased from USD30.4bn in 2016 to USD26.1bn revenue in 2017.

    Text of relevance in the 2018 D. Del. opinion:


    Two limitations are of particular significance in resolving Gilead’s enablement challenge.

    First, the claim includes structural limitations (hereinafter, the “Structural Limitations”). The term “β-D-2′-methyl-ribofuranosyl nucleoside” encompasses any β-D-nucleoside that includes “a five member sugar ring with a methyl group in the 2′ up position and non-hydrogen substituents at the 2′ down and 3′ down positions.” (D.I. 237 at 12; D.I. 516 at 22)

    Second, at Idenix’s urging, the Court construed the claims to contain a functional limitation, through claim l’s preamble (“A method for the treatment of a hepatitis C virus infection”) and its “effective amount” term. (See D.I. 446 at 8-13) Specifically, the Court concluded that claim 1’s preamble is limiting and that the term “effective amount” means “an amount [of the . . . ribofuranosyl nucleoside . . .] that is effective to treat HCV” (hereinafter, the “Functional Limitations”) (D.I. 447).

    Combining these two limitations, the claims cover all those nucleosides, but only all those nucleosides, that meet the Structural Limitations — including a methyl group at the 2′-up position [*29] — and the Functional Limitations of exhibiting effective anti-HCV activity. (See, e.g., D.I. 446 at 8-13; Secrist Tr. at 1576-77; Meier Tr. at 1865-66) Thus, as further explained below, the claims as construed combine Structural Limitations that are satisfied by an enormous number of compounds with Functional Limitations that are satisfied by an unknown, but far smaller, number of undisclosed compounds.

    Also pertinent to the Court’s analysis is what is not in its claim construction. Targeting the NS5B polymerase — which Idenix contends is the key to a compound demonstrating effectiveness in the treatment of HCV (see, e.g., D.I. 554 at 8) (identifying “a defined target (NS5B)”) — is not an explicit claim limitation. The patent claims are not limited to compounds that are effective in treating HCV due to their acting on the NS5B polymerase. Nor does the patent specification even teach that to identify effective compounds a person of ordinary skill in the art (“POSA”) must or even should be looking for compounds that target the NS5B polymerase. Instead, the patent explains that effective compounds can act through “inhibiting HCV polymerase, by inhibiting other enzymes needed in the replication [*30] cycle, or by other pathways.”

    Of note:

    The Court now turns from the undisputed facts to those facts that are disputed but which, in the Court’s view, present disputes on which a reasonable jury, taking the trial record in the light most favorable to Idenix and drawing all reasonable inferences in favor of Idenix, could only have found in favor of Gilead. “The rule that a jury verdict is reviewed for support by ‘substantial evidence’ does not mean that the reviewing court must ignore the evidence that does not support the verdict…. That is, the court should give credence to the evidence favoring the nonmovant as well as that evidence supporting the moving party that is uncontradicted and unimpeached.” Integra Lifesciences I, Ltd. v. Merck KGaA, 496 F.3d 1334, 1345 (Fed. Cir. 2007).

    The Court concludes that while each of the following topics were disputed, they are not genuinely in dispute, in that a reasonable factfinder could only have found for Gilead on these disputes. Nor does the Court find that there are any other material factual disputes regarding enablement that are in genuine dispute. Instead, Gilead has shown that “the record is critically deficient of the minimum quantity of evidence to sustain the verdict.” Accumed LLC v. Advanced Surgical Servs., Inc., 561 F.3d 199, 211 (3d Cir. 2009) (internal quotation marks omitted).

    (…)

    For the reasons stated above, a reasonable jury, even taking all the evidence in the light most favorable to Idenix and drawing all reasonable inferences in favor of Idenix, could only have concluded that Idenix’s ‘597 patent is invalid due to lack of enablement. The only reasonable finding, based on the trial record, is that Gilead met its burden to prove nonenablement by clear and convincing evidence. The trial revealed that there are no genuinely disputed material facts with respect to enablement. Accordingly, Gilead is entitled to judgment as a matter of law that the asserted claims of the ‘597 patent are invalid due to lack of enablement.

    Footnote 13:

    Neither Gilead nor its experts have endorsed the position that inventions in this area of art — or even inventions in this area of art having structural limitations that are literally satisfied by billions of compounds — are automatically non-enabled or inherently suspect. As is made clear throughout the remainder of this Opinion, the required enablement analysis must take into account numerous factors, facts, and circumstances, leading to an ultimate conclusion as a matter of law. A wide disparity between the number of compounds satisfying the Refined Structural Limitations and those also satisfying the Functional Limitations, combined with only a little bit of guidance given in the patent for how to navigate from the larger to the smaller category, are big factors (though not the sole considerations) in rendering the ‘597 patent invalid for lack of enablement. See generally Wands, 858 F.2d at 737 (“Whether undue experimentation is needed is not a single, simple factual determination, but rather is a conclusion reached by weighing many factual considerations.”); but see also generally In re Fisher, 427 F.2d 833, 839, 57 C.C.P.A. 1099 (C.C.P.A. 1970) (“In cases involving unpredictable factors, such as most chemical reactions and physiological activity, the scope of enablement obviously varies inversely with the degree of unpredictability of the factors involved.”).

    Relevant:
    7,608,597
    Methods and compositions for treating hepatitis C virus

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  • CBS Sunday Morning on February 18, 2018 does puffery

    The February 18 show continued the slide into puff over substance.

    The Almanac feature celebrated the birthday of Vanna White, born as Vanna Marie Rosich on February 18, 1957. Not mentioned in the clip was White’s foray into intellectual property. From the case:

    In running a particular advertisement without Vanna White’s permission, defendants Samsung Electronics America, Inc. (Samsung) and David Deutsch Associates, Inc. (Deutsch) attempted to capitalize on White’s fame to enhance their fortune. White sued, alleging infringement of various intellectual property rights, but the district court granted summary judgment in favor of the defendants. We affirm in part, reverse in part, and remand.

    California state law and the Midler case arose: White first argues that the district court erred in rejecting her claim under section 3344. Section 3344(a) provides, in pertinent part, that “[a]ny person who knowingly uses another’s name, voice, signature, photograph, or likeness, in any manner, … for purposes of advertising or selling, … without such person’s prior consent … shall be liable for any damages sustained by the person or persons injured as a result thereof.”

    White argues that the Samsung advertisement used her “likeness” in contravention of section 3344. In Midler v. Ford Motor Co., 849 F.2d 460 (9th Cir.1988), this court rejected Bette Midler’s section 3344 claim concerning a Ford television commercial in which a Midler “sound-alike” sang a song which Midler had made famous. White’s loss on summary judgment was affirmed by CA9. White obtained reversal of adverse SJ decisions on right of publicity and Lanham Act claims.

    Mo Rocca did a piece supposedly picking the worst president. On the internet this piece begins:


    A question on this Presidents’ Day weekend: Which of our former Chief Executives was the worst ever? Presidential historians have been making a list … and our Mo Rocca may have the winner:

    No survey of forgotten presidents (such as James Buchanan, Chester A. Arthur or Millard Fillmore) would be complete without our 17th president, Andrew Johnson.

    On the broadcast, Warren Harding, rather than Arthur, was the second “candidate” mentioned. It appears that CBS transcripts are not really reproductions of what is broadcast.
    Furthermore, whether there is an agreement that Johnson was the worst president remains to be seen.

    Adding further puff to the broadcast was the Tracy Smith piece Jimmy Buffett and “Margaritaville” come to Broadway

    The cover story, Infidelity: Why the oldest taboo continues to be broken by Tony Dokoupil [of Katy Tur and George Washington University, where the marketing major earned a 3.87 GPA and was named to GW’s Dean’s Honor List ] included favorable discussion of Ashley Madison.

    The broadcast included an opinion piece by Stoneman Douglas high school senior David Hogg; for some reason, it was followed by a piece by Faith Salie, as if Hogg’s thoughts needed re-enforcement. [One notes that Hogg appeared on “Face the Nation” and thereon asserted President Trump controlled the Senate and House. There was discussion of a march on March 24.]

    The “moment of nature,” on Everglades National Park, included a reference to Marjory Stoneman Douglas. As to “who” pushed for creation of the park, consider text from wikipedia:


    The [Tropical Everglades National Park ] commission was also tasked with proposing a method to raise the money to purchase the land.[74] The search coincided with the arrival of the Great Depression in the United States, and money for land purchase was scarce.[75] The U.S. House of Representatives authorized the creation of the new national park on May 30, 1934, but it passed only with a rider that ensured no money would be allotted to the project for at least five years.[74] Coe’s passion and U.S. Senator Spessard Holland’s politicking helped to fully establish the park, after Holland was able to negotiate 1,300,000 acres (5,300 km2) of the park, leaving out Big Cypress, Key Largo, the Turner River area, and a 22,000-acre (89 km2) tract of land called “The Hole in the Donut” that was too highly valued for agriculture. Miami Herald editor John Pennekamp was instrumental in pushing the Florida Legislature to raise $2 million to purchase the private land inside the park boundaries.[76] It was dedicated by President Harry Truman on December 6, 1947, one month after Marjorie Stoneman Douglas’ book; “The Everglades: River of Grass” was released.[77]

    One notes the existence of Garald G. “Jerry” Parker, Sr. (1905–2000) who was a B.S. level hydrologist and is known as the “Father of Florida groundwater hydrology.”

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  • Patents and Antitrust: Trump DOJ Sees Little Connection

    For the first time ever, the head of the Antitrust Division for the Department of Justice is a patent attorney – Makan Delrahim – who is known to be “Makan Antitrust Great Again” In a recent speech, Delrahim explained his general position – that patent holders rarely create antitrust concerns.  Rather, it is equally likely that the […]

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  • Is there a Light at the End of the Alice Tunnel?

    Maybe I’m being too optimistic. But in a pair of decisions issued within a week of each other, Berkheimer v. HP and Aatrix Software v. Green Shades, the Federal Circuit just vacated two patent ineligibility determinations… And if you think these declarations are too good to be true, take a look at the decisions, both drafted by Judge Moore. Both are in the software field… The Court held that the district court erred in granting summary judgment of ineligibility with respect to some of…

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