Thursday, September 10, 2009

Fresenius v. Baxter International

(2008-1306,-1331, Sept. 10, 2009) Baxter’s argument before the trial court that Fresenius failed to show that a system was prior art was not sufficient to preserve other arguments regarding the prior art, such as that it failed to show all the limitations: “[O]ne specific challenge to an anticipation finding does not preserve all possible challenges to that finding. If a party fails to raise an argument before the trial court, or presents only a skeletal or undeveloped argument to the trial court, we may deem that argument waived on appeal, and we do so here.” (p. 10.) Further, the parties disputed what the prior art system showed, and therefore were presenting a new factual dispute on appeal that “should have been presented to the district court for its consideration in the first instance.” (p. 11.)

Fresenius failed to provide substantial evidence of invalidity for certain means-plus-function claims because it failed to include any evidence that the corresponding structure was disclosed. “Just as a patentee who seeks to prove infringement must provide a structural analysis by demonstrating that the accused device has the identified corresponding structure or an equivalent structure, a challenger who seeks to demonstrate that a means-plus-function limitation was present in the prior art must prove that the corresponding structure—or an equivalent—was present in the prior art.” (p. 17.)

KSR and Motivation to Combine. The court noted that the trial was conducted and JMOL issues decided before KSR, and that “the district court applied the teaching-suggestion-motivation test for obviousness as it existed before it was modified by KSR.” (p. 19.) The district court had reversed the jury’s finding of obviousness, and the Federal Circuit reversed the district court. Referring to the motivation to combine test relied on in some form by the jury and the district court, the court stated: “We first note that it remains appropriate for a post-KSR court considering obviousness ‘to determine whether there was an apparent reason to combine the known elements in the fashion claimed by the patent at issue.’” (p. 20 (quoting KSR).) The court went on to find that, under KSR, there was substantial evidence of a suggestion to combine to support the jury’s finding of obviousness.

Regarding the granting of a permanent injunction, the court found that the district court correctly applied the four-factor post-eBay test and did not abuse its discretion, but nonetheless vacated and remanded for reconsideration in light of the other holdings in its opinion (that some of the claims at issue were invalid for obviousness). (p. 24.)

Damages. The court also vacated the royalty award for reconsideration in light of the fact that now fewer claims (and patents) were found to be infringed, noting that this may alter the hypothetical negotiation. (p. 24-25.)

Reexamination. In separate concurring opinions, Judges Dyk and Newman disagreed about whether a stay of the remaining proceedings is warranted in this case. While noting that reexam can be useful, Judge Newman cautioned: “if routinely available to delay the judicial resolution of disputes, the procedure is subject to inequity, if not manipulation and abuse, through the delays that are inherent in PTO activity.” (p. 3 of Newman concurrence.)