United States: Spotlight On Upcoming Oral Arguments – August 2020

August 4, 2020

Conversant Wireless Licensing S.A.R.L. v. Apple, Inc., No. 19-2039

Conversant sued Apple for allegedly infringing U.S. Patent No. 6,477,151 (the "'151 patent"), which Conversant obtained from Nokia. At trial, Conversant won on the issues of validity and infringement. Apple also challenged the enforceability of the '151 patent, losing at the district court but securing a remand on appeal. On remand, the district court found the '151 patent unenforceable under the doctrine of involuntary waiver. As part of its decision, the district court concluded that: (1) Nokia convinced the European Telecommunications Standards Institute ("ETSI") to include an idea in the General Packet Radio Service ("GPRS") standard, while Nokia also filed patent applications covering the same idea (including the application that matured into the '151 patent), (2) under ETSI rules, Nokia had an obligation to disclose those applications to the ETSI, (3) Nokia concealed those applications from the ETSI, and (4) Nokia, and later Conversant, leveraged the '151 patent by incorporating it into the GPRS standard to receive higher licensing fees from companies making GPRS-compliant products. According to the district court, by breaching ETSI disclosure requirements, Nokia and Conversant obtained an unjust benefit and therefore were subject to involuntary waiver, preventing them from enforcing the '151 patent against companies making GPRS-standard-compliant products.

Conversant appeals to the Federal Circuit, arguing for reversal on three grounds. First, Conversant argues that the district court failed to find 'but-for' causation, required for a finding of implied waiver by Therasense, Inc. v. Becton, Dickinson & Co., 649 F.3d 1276 (Fed. Cir. 2011). Second, Conversant argues the district court failed to apply the correct evidentiary standard, clear and convincing evidence, to its findings of materiality and causation. Third, Conversant maintains the district court erred by finding the '151 patent covers an essential part of the GPRS standard, when in fact the standard can be practiced without practicing the '151 patent. Apple responds by arguing that there is no "but-for" causation requirement in the implied waiver doctrine, pointing to Qualcomm, Inc v. Broadcom Corp., 548 F.3d 1004 (Fed. Cir. 2008). Second, Apple argues that the district court's findings were properly based on the testimony of a witness whom the court was entitled to credit. Third, Apple argues that the '151 patent is essential to the GPRS standard, pointing to positions taken by Nokia and Conversant during the litigation. Apple therefore asks the Federal Circuit to affirm the district court's ruling that the '151 patent is unenforceable against products practicing the GPRS standard, due to the egregious misconduct of concealing the '151 patent. 

August 5, 2020

Anacor Pharmaceuticals, Inc v. Flatwing Pharmaceuticals, LLC, No. 19-2264. 

Flatwing filed petitions for inter partes review ("IPR") against four Anacor patents. The patents cover method claims for treating toe fungus infections with tavaborole, a boron-based pharmaceutical. In its petition, Flatwing presented prior art allegedly disclosing the use of boron-based chemicals as a biocide generally and as a toenail fugus treatment specifically along with prior art allegedly disclosing topical toe fungus treatment at various concentrations of active ingredient. Following unfavorable outcomes in IPRs on other related patents, Anacor conceded the obviousness of most of the challenged claims, contesting only those claims requiring tavaborole at a 5% w/w (by weight) concentration. In defense of those claims, Anacor argued first that the prior art taught away from using a 5% w/w concentration of tavaborole, suggesting instead concentrations from 10% to 20% w/w were better suited for topical use. Additionally, Anacor pointed to the unpredictable nature of boron chemistry, as well as the infant state of boron-based pharmaceutical research, to argue that a 5% w/w concentration would not have been reached through routine experimentation. The Patent Trial and Appeal Board ("PTAB") sided with Flatwing, finding the disputed claims in all four patents obvious.

Anacor appeals, seeking reversal of the PTAB's decision on two grounds. First, Anacor argues that the PTAB acted arbitrarily, capriciously, and without evidence when it found that a personal of ordinary skill in the art ("POSA") would have arrived at a 5% w/w concentration through routine experimentation. Anacor argues that the PTAB engaged in impermissible "reverse-reasoning" when it used the unpredictability of boron chemistry to conclude that routine testing would have led a POSA to the claimed concentration, that the PTAB misconstrued Anacor's evidence of boron's unpredictability from a prior case, and also impermissibly conflated claims with different elements. Second, Anacor argues that the PTAB lacked substantial evidence to conclude that the prior art would not have taught away from a 5% w/w concentration. According to Anacor, its expert provided uncontradicted testimony that the prior art would have discouraged and led POSAs away from using a 5% w/w tavaborole solution. Rather than base its decision on the record, Anacor argues, the PTAB impermissibly based its factual findings on its expertise and rejected Anacor's argument, an improper action under Brand v. Miller, 487 F.3d 862 (Fed. Cir. 2007). Flatwing responds to Anacor's arguments first by pointing out that the issues on appeal are all questions of fact reviewed for substantial evidence. Next, on Anacor's first ground for appeal, Flatwing asserts that substantial evidence supported the PTAB's finding with respect to routine experimentation: the prior art allegedly disclosed that a 5% w/w concentration could be effective and also that the concentration of active ingredient affects dose effectiveness. Turning to teaching away, Flatwing argues that the prior art allegedly does teach a 5% w/w solution is effective while also allegedly teaching higher concentrations as more effective. Because merely disclosing a preference, according to Flatwing, does not equate to teaching away, Flatwing argues that the prior art would not have taught away, and the patents are invalid as obvious.

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