March 2018

UNITED STATES

The Federal Circuit

Several interesting legal and business developments took place at the Federal Circuit over the past month.

In Xitronix Corp. v. KLA-Tencor Corp., No. 2016-2746, 2018 WL 798662 (Fed. Cir. Feb. 9, 2018), the court transferred an antitrust action to the 5th Circuit after holding that it lacked jurisdiction. Patent law, it reasoned, was not a “necessary element” of one of the claims, as required to support jurisdiction.

In Nalco Co. v. Chem-Mod, LLC, No. 2017-1036, 2018 WL 1055851 (Fed. Cir. Feb. 27, 2018), the court reversed the Northern District of Illinois’s dismissal of a patent infringement complaint due to purported factual pleading deficiencies. The patent-in-suit related to removing mercury (a toxic pollutant) from flue gas created from coal combustion at coal-fired plants.

In Aatrix Software, Inc. v. Green Shades Software, Inc., No. 2017-1452, 2018 WL 843288 (Fed. Cir. Feb. 14, 2018), the court reversed the Middle District of Florida’s dismissal of a patent infringement case, which was based on a finding of patent ineligibility. The Federal Circuit found that the asserted claim, directed to a “data processing system,” was not directed to an abstract idea, and emphasized that claims to “pure date” and “transitory signals” can be eligible.

WCM Indus., Inc. v. IPS Corp., No. 2016-2211, 2018 WL 707803 (Fed. Cir. Feb. 5, 2018), the court gave some life to the relatively rare doctrine of equivalents, reversing the Western District of Tennessee’s post-trial grant of JMOL overturning the jury’s verdict of infringement under the doctrine of equivalents.

The U.S. International Trade Commission

The Commission issued one notice of exclusion order—specifically a limited exclusion order in the case of In the Matter of Certain Composite Aerogel Insulation Materials and Methods for Manufacturing the Same, Inv. No. 337-TA-1003. The exclusion order prohibits unlicensed entry of infringing composite aerosol insulation materials made by the respondents, Guangdong Alison Hi-Tech Co., Ltd. (Guangzhou, China) and Nano Tech Co., Ltd. (Shaoxing, China).

Source: Section 337 Commission Notices (available at https://www.usitc.gov/secretary/fed_reg_notices/337.htm).

ASIA

China Issues Aggressive Official Policy Directives to Improve IP System

On February 27, 2018, China’s top policy officials—called the General Office of the Party and the General Office of the Council—published new initiatives geared towards improving China’s IP system in key strategic ways. For example, China plans to (i) reduce IP owners’ standard of proof in litigation, (ii) define standards for damages based on compensation, and potentially additional amounts for punishment, and (iii) add to case law guidance. Importantly, the policy initiatives also propose establishing a national IP appeal mechanism, as well as specialized IP litigation forums. These changes come largely in response to a drastic rise (about 40% in 2017) in Chinese IP litigation, and a desire by Chinese policymakers to continue that trend. In fact, Justice Tao Kaiyuan, Vice President of the Supreme People’s Court, stated in related press conference that China is striving to make its courts the preferred venue for international IP disputes.

Read more at http://www.gov.cn/zhengce/2018-02/27/content_5269267.htm; https://mp.weixin.qq.com/s/f452_T4Z9LmcLoZ58BQCfw.

China Forms “15 + 3” IP Tribunal System

In the past two weeks, China set up three more Expanded Intellectual Property Tribunals. With these tribunals, China now has a “15 + 3” IP judiciary structure—fifteen Expanded Intellectual Property Tribunals (in Zhengzhou, Tianjin, Changsha, Xi’an, Hangzhou, Ningbo, Jinan, Qingdao, Fuzhou, Hefei, Shenzhen, Nanjing, Suzhou, Wuhan and Chengdu) and three specialized IP courts (in Beijing, Shanghai, and Gangzhou).

Read more at http://www.stdaily.com/kjrb/kjrbbm/2018-03/04/content_643881.shtml.

Honda Sues Great Wall Motors in Beijing IP Court

In mid-February, the Beijing IP Court announced that Honda filed suit, asserting two patents against its Chinese competitor, Great Wall Motors. The case is notable partly because it is rare for Honda to sue for patent infringement. Honda demands about 32 million USD in damages. One patent-in-suit relates to a “hatchback door structure,” and the other pertains to a vehicle body’s “garnish attachment structure.” The accused product is Great Wall’s H6—the leading SUV in the Chinese market and a direct competitor with Honda’s CR-V.

Read more at https://www.lexology.com/library/detail.aspx?g=8a5a1352-7e8b-4f88-8c31-a7914058cabd.

China’s Favorable Innovation Policies Showing Results

The China Dashboard (by the Rhodium Group and the Asia Society Policy Institute) has recently issued, analyzing the Chinese economy. According to the report, innovation reform policy is a top-priority of the Chinese government. The report predicts that Chinese innovation will catch up to U.S. innovation levels. Perhaps the sectors with most innovation potential are the auto, information and communication technology, and instruments and meters.

Read more at http://chinadashboard.asiasociety.org/winter-2018.

Chinese Companies Lead in Ownership of Blockchain Patents

Blockchain is a way to keep track of a continuously growing list of related transactions using cryptography. A blockchain starts with a “genesis block.” A cryptographic hash function is applied to the data block, resulting in the next block, and so on. This technology was developed for Bitcoin and other cryptocurrencies.

IPRdaily has reported on the top owners of blockchain patents. Out of the top 100 patent owners, 49 are Chinese companies and 23 are U.S. companies. Alibaba is in the top spot, followed by Bank of America, and then Chin’s Digital Currency Research Institute.

Read more at http://www.iprdaily.cn/news_18252.html.

China Ramps Up Technology-Related Transactions

The number of China’s technical contracts increased by 14.7% in 2017, reaching about 367,000. The total transaction value is about 1.43 trillion yuan (213 billion USD). The three fields that gained the most value include electronic information, urban construction and social development, and transportation. Over 40% of transactions involved IP rights. Also notable is that the transaction value for biotechnology and pharmaceuticals fields rose by almost 63%. These developments are yet another indicator of China’s aggressive innovation policies.

Read more at http://www.xinhuanet.com/english/2018-02/11/c_136967182.htm.

EUROPE

Pfizer Risks Owing £500 Million to the U.K. National Health Service (NHS)

In mid-February, the U.K. Supreme Court heard a patent validity dispute between Pfizer’s subsidiary, Warner-Lambert, and multiple generic competitors. The patent covers the drug pregabalin (Pfizer’s Lyrica), which treats epilepsy, neuropathic pain, and fibromyalgia, among other diseases. In the case, Pfizer is trying to overturn a late-2015 ruling of patent invalidity.

Apparently, the NHS had ordered its Clinical Commissioning Groups to prescribe Lyrica rather than its generic alternatives. If the U.K. Supreme Court affirms the invalidity of the patent, Pfizer could owe the NHS essentially the price difference between Lyrica and a generic—totaling about £502 million.

Read more at https://www.lexology.com/library/detail.aspx?g=c953dd7a-0167-47ec-b5f4-7a41134ea40f.