Defending a Patent Infringement Case by Finding Unusual Prior Art

By Andrew M. Solomon, Robert W. Stevenson and David B. Gornish

Anyone defending a patent infringement lawsuit knows that such a suit can divert time, energy and money from the business of the accused. Worse potential consequences include an unfavorable judgment (e.g., a court injunction against further infringement, significant compensatory damages, enhanced damages for willful infringement, etc.), and/or a costly “design around.” However, with a bit of resourcefulness, a defendant may succeed in obtaining an early dismissal or favorable settlement of such lawsuits. A patent infringement defendant’s case often stands or falls based on the quality of “prior art” that the defendant relies on to establish patent invalidity.

ACC Docket 63 October 2011 To be patentable, an invention must be, viously used. In some cases, it can be Andrew M. Solomon among other things, different from and is a vice president and difficult to find prior art the PTO has not nonobvious over the prior art. For purposes assistant general already considered. counsel at the Perrigo here, prior art generally includes technology Company, a generic While searching the same sources as the that predates the filing date of the patent(s)- health care company, where his PTO is certainly appropriate, a defendant’s practice includes management of in-suit, such as other patents, published intellectual property and commercial search efforts ought not to end there. But law issues. He has practiced as articles, product catalogues, and public in-house and outside counsel for 26 they all too often do, even if only less-than- uses or sales of products similar or identi- years and is a registered patent ideal prior art is located. This can be a mas- 1 attorney. He can be contacted at cal to the patented invention. A patent [email protected]. sive strategic error. A defendant should not owner cannot defend against an assertion settle with building its case on mediocre Robert W. of unpatentability over certain prior art by Stevenson is a prior art based only on search methods and claiming a lack of knowledge of it. partner at Caesar Rivise, sources that may differ little, if at all, from Philadelphia and has If an invention had been identically more than 29 years of what the PTO used. Since the territory for disclosed in a prior patent, for example, the patent litigation experience in a potential prior art is vast, there are roads variety of technical areas. He also has invention would be unpatentable since it is US patent prosecution experience with not traveled by the PTO, which a defendant not new. If an invention is not identically hundreds of patents and many should try to find — and later explore — re-examinations during those years of disclosed in the prior art, the invention still his practice. He can be contacted at before determining that it has reasonably may be obvious. For example, if a prior art [email protected]. exhausted its search efforts. publication discloses something similar, but David B. Gornish is a To find key prior art outside of the PTO- partner at Caesar Rivise, not identical to, an invention, the invention Philadelphia and search paradigm, we suggest that a defen- would not be patentable if the differences divides his practice dant try and understand the business of the primarily between patent between the invention and the disclosure in litigation and patent prosecution. He patent owner as of the patent filing date the publication were technically obvious. has experience handling matters in and consider at least the following: diverse technologies including, most A patent that is later determined not to significantly, pharmaceuticals, • What was the size of the market at have met the criteria for patentability (i.e., it mechanical inventions and business the time? methods. He can be contacted at should not have issued in the first place) is [email protected]. • Who were the market players at the time? an invalid patent. An invalid patent cannot • What problem(s) did the inventors face, be infringed. Defendants thus commonly and what other entities were motivated assert patent invalidity as a defense in patent infringement to solve the problem(s) in the same or lawsuits. The most common invalidity defenses are based similar way previously? on prior art. Accordingly, it is imperative that a patent in- • Did the inventor(s) and/or plaintiff make any public fringement defendant find and appreciate the most relevant statements (e.g., in marketing materials, SEC filings, prior art. Failure to do so may cause the defendant to lose clinical study reports and/or FDA filings to the PTO) a case that could have been won if only the defendant had that can be used as admissions or at least lead to known about the most relevant prior art. important evidence of invalidity? Finding prior art sufficient to upset a patent’s validity • Keep an open mind to the fact that previously can be daunting under the best of circumstances. One rea- someone may have invented or sold the same thing son is that during the patent procurement process (known without patenting or publishing it. as “patent prosecution”), the United States Patent and Trademark Office (PTO) searches available prior patents The bottom line is that in searching for prior art and and literature to determine patentability. In this and other building a case of invalidity, resourcefulness can be re- ways, the PTO plays a gatekeeping role — supposedly en- warded. Resourcefulness does not lend itself to a simple suring that patents are granted only for truly patentable in- definition or even a set of specific principles. We can best ventions. Because the PTO is presumed to have done iheats illustrate it by examples. The following examples describe job properly, an issued patent is presumed valid and can some of the authors’ own experiences in establishing patent be held invalid in court only upon a “clear and convincing” invalidity over prior art that the PTO or a standard search showing to the contrary (a high evidentiary burden). did not, and probably could not, find. At the beginning of a patent infringement lawsuit (if not earlier), most defendants conduct their own prior The case for the private investigator art searches. However, in many cases, the search tools A client was selling a cover designed to keep water from available to and used by defendants to locate prior art outdoor electrical outlets. A competitor sued for patent in- are the same as, or similar to, the tools the PTO pre- fringement. We did the usual PTO-type searching for prior

ACC Docket 64 October 2011 art (i.e., prior patents and journal literature) and found some that was not bad — enough to possibly establish invalidity. However, as many patent litigators know, “not bad” prior art Ultimately, this published prior is often not good enough to succeed at trial, much less ob- art — evidence that could not tain a dismissal or convince the plaintiff to drop the lawsuit. After our initial search efforts, we thought about which have been found in a typical non-US markets would have had a need for the patented outlet cover and where one might actually have been sold. prior art search — caused We had in mind technologically advanced countries that were safety conscious and rainy, and ultimately focused the plaintiff to drop its lawsuit our attention on the United Kingdom and Japan. We hired private investigators in the United Kingdom and Japan to and abandon its patent. contact electrical supply companies. We wanted to know whether the companies had ever sold such covers, and if so, whether the companies published catalogs prior to the patent’s filing date. That approach yielded a plethora of sis technician in Seattle, obtained actual product in dated non-patent, published prior art catalogs for us that were sterilized packages showing that it had been on sale. directly on point. Ultimately, this published prior art — In addition, it turned out that a technician had designed evidence that could not have been found in a typical prior an earlier version of the double seal connector and had art search — caused the plaintiff to drop its lawsuit and presented his design at a conference in Seattle prior to abandon its patent. The investigators we used actually cost the patent’s filing date. He provided us with copies of his considerably less than typical patent searches for prior art. presentation and the conference agenda listing his presen- tation. Separately, we obtained documents showing that Secrets in Seattle the plaintiff’s inventors attended that same conference. All A client — a large multinational company — was selling told, three fact witnesses agreed to testify (at a trial that dialysate (a solution used in dialysis), which was admin- never ultimately took place). Thus, without any formal istered to patients through an implanted catheter in the discovery (e.g., subpoenas or depositions), we found not patients’ abdomens from disposable plastic bags. The bags only terrific prior art, but evidence that the patent owner’s were connectable to the catheters with a double seal con- “inventors” may have obtained the double seal connector nector of a specific design that our client’s competitor had idea elsewhere! We informed the plaintiff of our findings, patented. The client attempted a “design around” but was the lawsuit settled, and our client remained on the market. nonetheless sued for infringement. As in the first example above, the client had performed What’s up, Doc? the usual PTO-type search, locating prior art that kept us A client was sued on a therapeutic method patent. in the game, but did not bring a quick end to the litigation. Prior to our involvement in the case, the client’s invalidity So we asked ourselves: What other companies were in the defense had been based on a publication that, as it turned dialysis business as of the patent’s filing date, and which out, may not have actually been prior art (its true publi- other medical indications might have benefited from double cation date was called into question). When we became seal connectors? After talking to business people and a few involved in the case, we did the usual PTO-type searches physicians in the field, we drew up what turned out to be a for additional prior art, which the client — a capable relatively short list of companies to contact. multinational company — had also previously done. Our The patented invention was fairly simple to describe combined searching for additional literature was not par- over the phone, and we called the companies on our list ticularly fruitful. describing what we were looking for. In a relatively short We engaged an expert and learned that there were time, we located a Seattle company that claimed to have only a limited number of medical centers involved in this sold such a connector during the relevant time period (the field prior to the patent’s filing date. We developed a very product had been discontinued, however, years before short list of such centers with him. Although the expert our phone call). We visited Seattle and learned that the was unaware of any center practicing the patented method company’s claim was true, and that its product was highly before the filing date, we began calling these centers any- relevant prior art to the patent-in-suit. Without any subpoe- way. After a few phone calls, we learned from a physician nas, we obtained dated manufacturing drawings and sales at one of the centers that he recalled another physician documents from the Seattle company, and through a dialy- practicing the method about 15 years prior to the pat-

ACC Docket 65 October 2011 by the second plaintiff; the patented product was the first ACC Extras on… Defending a plaintiff’s only commercial product prior to acquisition. Patent Infringement Case We knew from other experiences that small publicly traded companies have to report a lot about their products in their annual reports to the SEC, which are publicly available. We ACC Docket therefore reviewed the first plaintiff’s publicly available ECS • Crush a Patent Infringement Suit and Save Money filings prior to the patent’s filing date — a simple undertak- (May 2010). www.acc.com/patent-suit_may10 ing, which turned out to be fruitful beyond imagination. What we learned (from the reported SEC “risk factors”) SM InfoPAK was that prior to the filing date, the first plaintiff had no • Anatomy of a Patent (Sept. 2010). manufacturing capabilities of its own and relied on a sup- www.acc.com/infopaks/anatomy-patent_sep10 plier. We also learned under its reported financials that its “inventory” (an accounting term referring to things that ul- Quick References timately can be sold) had increased dramatically in a short • Tips, Tactics & Strategies for Effective period more than a year before the patent’s filing date. We Global Patent Enforcement (June 2010). inferred that this “inventory” was, in fact, its sole commer- www.acc.com/quickref/globalpat_june10 cial product, i.e., the later-patented drug. The dollar value • Strategies to Protect and Enforce Your of the inventory translated into several millions of doses of Patents Internationally (March 2010). the drug. We concluded that the first plaintiff had obvious- www.acc.com/quickref/intl-patents_mar10 ly been buying and stockpiling the drug the supplier made in advance of an expected FDA approval. These activities Presentation took place just over a year before the patent’s filing date. • Best Practices for Protecting Your IP in Emerging Markets Every patent attorney knows that selling a product more (Oct. 2010). www.acc.com/ip-emerging-mkts_oct10 than one year before the filing date is a prior art activity that renders the product unpatentable. Although these ACC has more material on this subject on our website. sales were not public and were made only between the Visit www.acc.com, where you can browse our resources patentee and its supplier, there is no “supplier” exception to by practice area or search by keyword. the on-sale bar to patentability “that ... allow[s] inventors to stockpile commercial embodiments ... via commercial contracts with suppliers more than a year before they file their patent application.”2 We filed a motion for summary ent’s filing date. That second physician was still alive. He judgment under seal that the invention had been “on sale” allowed us access to redacted patient records (a potential over one year before the filing date. prior art “public use” by itself) from which we learned Due to court protective orders, we cannot report what that yet a third physician was even more heavily involved the plaintiffs’ internal documents revealed about our suspi- in practicing this method during the relevant time period cions of prior sales. However, one fact we can report: After on a sizeable number of patients. He was still alive, several we brought our sealed summary judgment motion, the states away. When we found him, he gave us an article he plaintiffs soon thereafter dedicated the patent to the public. published on the method about 15 years prior to the patent. This was a remarkable turnaround in light of the fact that This old article had used different terminology from the the second plaintiff had paid over $600 million to buy the patent-in-suit to refer to the same method. In comparing first plaintiff company for just this one product. the text of the article against the search queries that we and the client used in conducting prior art searches, we learned Old Physicians’ Desk Reference yet another lesson about the limits of computer searching: We recently represented a defendant in a lawsuit involv- relevant terminology changes. The plaintiffs settled the ing a pharmaceutical formulation patent related to an FDA- case after we informed them of our findings, and the client approved product. We, along with the client, had done the remained on the market. usual computer searching of the standard chemical and patent databases, and actually found some pretty good Whatever you say can and will be used against you prior art. However, as mentioned in the other examples Two named plaintiffs sued a client over a patent to a described above, “pretty good” is not always good enough. pharmaceutical compound. The first plaintiff had been We chanced on searching Google with a broad search a small publicly traded company that was later acquired inquiry that located a current commercial (but very niche)

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Atlanta • Asheville • Birmingham • Chicago • Dallas • Denver • Jacksonville • Los Angeles • Melbourne • Memphis • Miami • Minneapolis • New York • Orlando Phoenix • San Francisco • Spartanburg • Tampa • Washington, DC • fordharrison.com product that was interesting. We discovered that it was listed patent filings, sometimes more than one year beforehand. in the Physicians’ Desk Reference (PDR), which is not ordi- Understanding your inventor and the kinds of activities he narily in the kinds of search databases that patent searchers might have engaged in pre-filing can lead to invalidating employ. We ordered PDRs, which pre-dated the patent’s prior art not otherwise on the radar screen. filing date, and found that the product was listed in them, al- beit in the name of another company. We also learned from Tying it all together an FDA website that the product had been FDA approved We can report other examples such as these. In each of more than 15 years earlier. These discoveries led us to the these examples, none of the plaintiffs expressed a willing- other company’s records including their Abbreviated New ness to settle or abandon their patents until after we suc- Drug Application to the FDA (with relevant formulation ceeded in the efforts we report. In fact, we believe most of information) and sales records. These records established these patent cases may well have gone to trial had we not that the product was indeed invalidating prior art. After we uncovered these types of evidence. unveiled this stuff to the plaintiff, the case ended. The main unifying themes in these examples are: (1) Patents can be invalidated by prior art that the More non-prior art leads to prior art typical PTO-type search would not reveal; In several cases we’ve experienced, there were instances (2) The invalidating prior art can be found from unusual in which third parties’ foreign patents were invalidating sources without significant expense (in some cases) prior art even though the third parties’ US counterpart and little or no formal litigation discovery; and patents were not. In one case, the foreign equivalent of an (3) Prior art can sometimes be found simply by issued third-party US patent qualified as 35 U.S.C. §102(b) understanding the backgrounds of the inventors, prior art against the competitor’s patent, whereas the third- understanding the market, making a few calls, and party US patent did not. In another case, the early grant of hiring investigators and the like. a Chilean counterpart third-party patent qualified as prior art under 35 U.S.C. §102(d) against a competitor’s patent, The underlying message to patent infringement defen- whereas the US counterpart third-party patent was not prior dants: Try to be resourceful and tenacious. And in every art. In both cases, a careful review of the foreign patent case, seek the road less traveled. Case-winning prior art landscape of counterpart non-prior art patents disclosing a may be just around the corner.∑ competitor’s patented invention led to the discovery of for- eign publications that qualified as prior art under US law. Have a comment on this article? Visit ACC’s blog at www.inhouseaccess.com/articles/acc-docket. Uncle Sam’s intellectual property In several cases we are aware of, the patentee’s “idea” Notes 1 the various types of prior art are defined in 35 U.S.C. §102 and had its genesis in government efforts to regulate industry or in case law interpreting that statute. impose product requirements. One case involved the FDA 2 Special Devices, Inc. v. OEA, Inc., 270 F.3d 1353, 1354 (Fed. advising drug companies of certain dosing requirements Cir. 2001). for a certain category of drugs. The patentee later sought 3 35 U.S.C. §102(f). to patent the application of those dosing requirements to a 4 In re Hall, 781 F.2d 897 (Fed. Cir. 1986) teaches us that indexed particular type of drug. It is black letter patent law that one theses are prior art; But see, In re Cronyn, 890 F.2d 1158 ( Fed. cannot get a valid patent if “he did not himself invent the Cir. 1989). 5 In re Klopfenstein, 380 F.3d 1345, 1352 (Fed. Cir. 2004) teaches subject matter sought to be patented.”3 Any patent practi- us that certain publicly presented posters can qualify as prior art. tioner understands the ramifications of those FDA require- ments on the validity of that patent, but it took an examina- tion of FDA records of public meetings — hardly a routine patent search effort –– to discover who really invented this.

University patent owners beware If the “inventor” is from a university or research center, with relative ease we have found relevant prior art report- ing of early stage research into a later patented invention. We have seen these in theses in University libraries,4 poster presentations at scientific meetings,5 and the like. We have also been beneficiaries of clinical trials reported prior to

ACC Docket 68 October 2011