In Norman IP Holdings, LLC v. Lexmark Int’l, Inc., a recent Eastern District of Texas decision, Chief District Judge Leonard Davis provided guidance on the application of Fed. R. Civ. P. 20 (“Rule 20”) joinder and Fed. R. Civ. P. 42 (“Rule 42”) consolidation in patent infringement cases post-enactment of the Leahy-Smith America Invents Act (“AIA”). Norman IP brought suit against Lexmark and others on September 15, 2011, one day before the AIA was signed into law. Norman IP later added an additional 23 defendants. The defendants filed a motion to dismiss for improper joinder or to sever, and Norman IP alternatively requested that any severed cases be consolidated under Rule 42. The Court granted defendants’ motion to sever and issued an order consolidating the cases for pretrial issues excluding venue.
On January 12, 2012, ICANN, the Internet’s domain name registration watch dog, began accepting applications for new generic Top-Level Domains (gTLDs) to add to those already in existence, including .com, .net, .biz and others. Under the new scheme, any company can apply for a gTLD, thereby expanding the domain name system (DNS). Ultimately, this expansion will change the Internet forever. Each new gTLD poses an incremental risk for trademark owners who are already under heavy assault in cyberspace from cybersquatting (registering, trafficking in, or using a domain name with bad faith intent to profit from the goodwill of a trademark owner), brandjacking (assuming the online identity of another entity for the purposes of trading on another’s brand equity), and typosquatting (registering URLs with common misspellings) by those seeking to generate illicit profits. According to the Coalition Against Domain Name Abuse (CADNA), cybersquatting already costs trademark owners more than $1 billion each year due to lost sales, lost goodwill, and increased enforcement costs. However, with a major increase in gTLDs, many corporations fear an expansion in expensive litigation to enforce their brands and trademarks.
Oral argument was recently heard before the Federal Circuit in the appeal of AstraZeneca Pharms. LP. v. Aurobindo Pharma Ltd. AstraZeneca, along with IPR Pharmaceuticals, Inc., and The Brigham and Women’s Hospital, Inc., (“Plaintiffs) sued ten generic drug companies alleging infringement of US Patent Nos. 6,858,618 (“the ‘618 patent”) and 7,030,152 (“the ‘152 patent”) under the Hatch-Waxman Act. These patents claim methods of treatment using rosuvastatin calcium, which Plaintiffs market as Crestor®.
Gibbons P.C. will once again sponsor lunch at the upcoming Rutgers University/Blanche and Irwin Lerner Center for Pharmaceutical Management Studies Program on Thursday, October 27, from 12:00 – 1:00 pm at Rutgers Business School – Newark.
Patent litigation has some eccentricities that, some say, require special attention in the court system. One historical effort to address this was the creation of the Federal Circuit in 1982 and the exclusive jurisdiction it possesses to hear patent litigation appeals from all district courts around the nation. This exclusive jurisdiction based on subject matter and not geographic location is fairly unique in the judicial system. Patent litigation often involves complex technical issues to determine patent invalidity and infringement, unique procedural devices (e.g. Markman hearings), and intricate legal issues with technical and economic underpinnings (inequitable conduct, price erosion, lost profits, etc.). For these reasons, patent litigants often prefer to have an experienced judge hear and manage the dispute so that the fairest outcome is had. To address and analyze these and other issues, on January 4, 2011, Congress created the “Patent Pilot Program.”
The Federal Circuit’s Myriad Genetics decision, Ass’n for Molecular Pathology v. U.S. Patent and Trademark Office, 99 U.S.P.Q. 2d 1938 (Fed. Cir. 2011), which invalidated most of the method claims in the patents at issue, brings to mind a concern about the value of method claims, particularly to the pharmaceutical industry. The Myriad Genetics patents at issue included two types of method claims relating to human genetics: one involved determining whether a female patient had abnormal BRCA1/2 genes by comparison of BRCA1/2 gene and BRCA 1/2 RNA from the patient’s tumor sample to those from a non-tumor sample; the second was an activity screening method for anticancer drugs that compared the growth of a host cell transformed with a cancer-causing BRCA gene in the presence and absence, respectively, of the test compound.
Litigation Expenses Alone Insufficient to Satisfy “Domestic Industry” Requirement Says ITC and Federal Circuit Affirms
Earlier this week the Federal Circuit affirmed an International Trade Commission (“ITC”) decision by refusing to find a patent owner complainant’s litigation expenses satisfied the “domestic industry” requirement of 19 U.S.C § 337. The Court’s decision in John Mezzalingua Assocs. (d/b/a PPC, Inc.) v. International Trade Comm’n, 2010-1536 (Fed. Cir. October 4, 2011) is a blow to ITC complainants, in particular, non-practicing entities intent on relying solely on patent litigation expenses to establish the domestic industry requirement of § 337.
Following a recent Federal Circuit decision, a patentee might now be able to assert a system claim against a single infringer for operating a distributed system, rather than naming joint infringers hosting portions of the distributed system. This is significant for entities that do business on-line, particularly enterprises with a cloud computing business model. Whereas in the past a patentee may have had to allege direct infringement among joint infringers (e.g., individual users, enterprises, and information technology system providers), and perhaps prove vicarious liability, now it may be possible to bring a direct infringement action against a sole infringer that might not be in possession of the complete system. E-commerce businesses, web-based providers of business services, providers of software as a service, electronic market makers, and other enterprises that use third-party server farms to host part, or all, of their system might now be named as the sole infringer. A patentee could perhaps now sue a competitor for infringement without having to sue the infringer’s IT provider. This could be particularly advantageous in cases where the patentee and the infringer share providers, and will permit the patentee to sue without jeopardizing its own business relationship with the provider.
Corporate Reorganization Absent Assignment or License of Patent Rights Results In Preclusion Of Patentee’s Lost Profits Damages
In a decision that highlights the import of assigning or licensing intellectual property assets during corporate reorganization, a district court recently ruled that a plaintiff patentee was not entitled to lost profit damages based on the patent at issue in an infringement action. In Duhn Oil Tool, Inc. v. Cooper Cameron Corporation (CAED January 24, 2011) Duhn Oil Tool, Inc. filed suit against Cooper Cameron Corporation alleging patent infringement. Following discovery, the defendant filed a motion for partial summary judgment arguing that the plaintiff patentee was not entitled to lost profits damages.
Recently, the U.S. District Court for the Southern District of New York ruled that a generic drug manufacturer may not be required to provide advance notice to the innovator of their intent to launch at-risk a competing product. This decision is noteworthy in that it contrasts with the practice in the District Court of New Jersey where at least one generic company has been ordered to provide advance notice to the brand companies of an impending at-risk launch.