Court Refuses to Vacate Markman Ruling Following Settlement

In the case Unigen Pharmaceuticals v. Walgreen Co. (07-471 RAJ), which is actually a consolidation of three cases brought by plaintiff Unigen, asserting infringement of US Patent No. 7,192,611 (for more on the consolidation, click here), the parties recently settled and approached the court jointly to dismiss the case and to also vacate a prior claims construction ruling.

The claims of the '611 patent are directed to a method for treating osteoarthritis using what is known as a Free-B-Ring flavonoid, which includes baicalein. The three defendants are Walgreens, Target, and Perrigo Company of South Carolina Inc. On March 18, 2009, Judge Jones construed the claims of the '611 to require inter alia: "that the patient recognize that he has a 'COX-2 and 5-LO mediated inflammatory condition' and to take the claimed composition for treating that condition by direct inhibition of COX-2 and 5-LO." This effectively required that the "Host Must Intend to Take the Extracts to Treat a Condition as Described in the Preamble." In other words, just proving that the extracts were taken, and that they exhibited the function as claimed, was not enough to show direct infringement. The court further concluded that "each of the preambles of the disputed claims contains a limitation restricting the claimed method to enzyme inhibition of an enzyme mediated disease (e.g., osteoarthritis in ‘611 Claims 1 and 8), condition (e.g., inflammatory condition in ‘868 Claims 1 and 4), or physical limitation (e.g., limited physical function, flexibility, and mobility in ‘611 Claim 15)."

In his order refusing to vacate the Markman ruling, Judge Jones concluded as follows:

Despite begin unable to point out why vacatur would be valuable, the parties want it. It would be more accurate, of course, to say that Plaintiff wants it. No Defendant has any stake in the order being vacated, as they are no doubt shielded from future litigation over the patents-in-suit by virtue of their settlement with Plaintiff. There is something (or perhaps many somethings) in the claim construction order that Plaintiff does not like, and vacating it is apparently preferable to Plaintiff. But again, the court has no idea what underlies Plaintiff’s belief. Whether the court vacates the order or not, it remains in the public record, and has as much persuasive effect as any court or party wishes to accord it. Vacatur does not make an order disappear. See Cisco, 590 F. Supp. 2d at 831 (“[The claim construction order] is now on the internet, available to anyone with a computer.”). If vacating the claim construction order is a nugatory act, then the court declines to take it if for no other reason than it does not wish to encourage parties to file motions requesting that the court issue meaningless orders.

If, on the other hand, vacating the claim construction order has some impact, either in terms of the slight possibility that a court will give it preclusive effect, or in terms of its value as a persuasive precedent, the equities counsel against vacating it. Only Plaintiff has an interest in vacating the order, whereas a larger set of potentially interested third parties has an interest in it as a precedent. The court’s orders “are not merely the property of private litigants and should stand unless a court concludes that the public interest would be served by a vacatur.” United States Bancorp Mortg. Co. v. Bonner Mall P'ship, 513 U.S. 18, 26 (1994) (quoting Izumi Seimitsu Kogyo Kabushiki Kaisha v. U.S. Philips Corp., 510 U.S. 27, 40 (1993)). Because “[j]udicial precedents are presumptively correct and valuable to the legal community as a whole,” id., vacating them in the service of a single litigant is generally inadvisable.

Moreover, the court cannot overlook the investment of judicial (and thus public) resources in the claim construction order. See, e.g., Tumulty v. FedEx Ground Package Sys., Inc., No. C04-1425P, 2007 U.S. Dist. LEXIS 20429 (W.D. Wash. Mar. 22, 2007) (declining to impliedly undo decision reached after intensive litigation by vacating judgment). Patent cases, perhaps more than any other genre of litigation, strain the resources of district courts. The claim construction process in particular is burdensome, as the parties almost invariably flood the court with lengthy briefs and exhibits, and the court’s analysis of disputed claim terms is labor-intensive, to say the least. In this case, the court reviewed the parties’ voluminous claim construction materials, held a Markman hearing, and issued a lengthy (by this court’s standards) claim construction order. In doing so, it diverted focus from hundreds of other cases on its docket. Vacating a claim construction order deprives the public of whatever benefit inures from the court’s investment in resolving patent cases. Zinus, Inc. v. Simmons Bedding Co., No. C 07-3012PVT, 2008 U.S. Dist. LEXIS 33359, at *3-6 (N. D. Cal. Apr. 23, 2008) (declining to vacate claim construction order). As the Zinus court bluntly put it: The public paid for this use of court resources through its tax dollars. Vacatur would render that expenditure a waste, and the parties cite no public interest that would be served by vacatur which would justify the waste of public funds.
Id. at *6.

Finally, the court’s declining to vacate its order will not discourage settlement. It will not discourage settlement in this case because the parties’ settlement is not conditioned on vacatur. As to other litigants, vacating the claim construction order would set a dangerous precedent. This court is not a place for a patent holder to “test drive” its patent. A patent holder who asserts its patent and proceeds to claim construction must be prepared for the possibility of an unfavorable construction, and must not believe that vacatur will serve as its get-out-of-jail-free card. Otherwise, there is nothing to discourage a patent holder from refusing to settle questionable patent claims prior to the expensive claim construction process. Id. at *5 (citing United States Bancorp, 513 U.S. at 28). Indeed, in this case, the parties filed numerous motions before claim construction, leading to several other interlocutory orders. The prospect of a claim construction that will not be erased at the request of the parties can only discourage unnecessary litigation.

For all of these reasons, the court finds that the equities weigh against vacating its claim construction order. The court therefore DENIES the parties’ motion to vacate

Unigen%20Motion%20to%20Vacate%20Markman%20Ruling.pdfUnigen%20Order%20Denying%20M%20Vacate%20Markman.pdf

Seattle Patent Litigation Update: August, 2008

While August was a relatively slow month for new cases in Seattle (only one, Laughing Rabbit Inc. v. OpticsPlanet, Inc (08-01176 JLR), area technology companies were busy elsewhere dealing with a variety of patent issues. Notably, Microsoft settled its dispute with Immersion Corp, obtaining a one-time payment of $20.75 M. The settlement resolves a contract dispute stemming from patent litigation Immersion won against Sony Corp over game controllers with so-called "rumble" or "haptic" technology (vibrating controllers, set to move in response to on-screen gaming events, like an explosion or car crash). Immersion sued Sony in 2004 in the ND of California. The suit targeted Sony's Playstation and Playstation 2, as well as Microsoft's X-Box controllers. In 2005, Microsoft and Immersion entered into a sublicense agreement as part of a $26 M settlement, where Microsoft paid Immersion $20 M to obtain licensing rights to the technology and $6 M to buy a 10% stake in the company. Microsoft's 10% stake became pretty valuable when Sony agreed to pay Immersion more than $150 M to settle remaining claims for infringement. Last month's payment resolved any remaining interest Microsoft had in proceeds from this patent litigation. Overall, one might say that Microsoft settled this dispute for $6M (but I have no idea whether Microsoft expects any more return on its 10% "investment" in Immersion ... Regardless, this is definitely some creative lawyering at work. ... Hats off to lawyers for MSFT).

In other Microsoft patent news from last month, Portland-based patent law blogger, Gary "Patent Hawk" Odom, author of The Patent Prospector, sued Microsoft in East Texas, alleging Infringement of his patent for "Tool Group Manipulations," US Pat. No. 7,363,592. (Complaint available here) Patent Hawk is represented by Susman Godfrey, among three other law firms and no fewer than 10 lawyers, including the Susman firm's Seattle-based patent litigators, Brooke Taylor and Genevieve Vose. The suit was filed in Tyler, TX, but it is not likely to get to trial very quickly there. The Texas Rocket Dockets (even Tyler's) are not as speedy as they once were.

Nintendo was also busy last month. It was dealt a one-two punch: (1) ITC investigation and (2) Federal Court patent litigation in USDC, Northern District of Maryland, both stemming from allegations that the Wii infringes certain patents owned by Hillcrest Laboratories, Inc. Hillcrest owns US Patent Nos. 7,158,118; 7,262,760; and 7,414,611, which allegedly cover a technology used on TV sets for user access to digital content like photographs, web sites, and games. The software typically uses a main menu that prompts users to choose which program they want to use. Hmmm, sounds like my Apple TV. Hillcrest also asserts infringement of US Patent No. 7,139,983, a patent alleged to cover hand-held three dimensional pointing devices that (unlike a traditional mouse) allow a user to translate or rotate the pointing tool in space instead of merely detecting movement relative to a flat surface.

Hillcrest is a different sort of plaintiff than Nintendo is perhaps used to (at least during the "modern age" of patent litigation, i.e., since about 2004). Hillcrest makes products and is relying on US trade law to seek a general exclusion order barring importation of any product infringing its US patents; this would apply to any importer of such products, so this case has implications beyond the immediate parties. Nintendo can stay litigation in Maryland district court or decide to proceed along parallel tracks in both US District court and the ITC. Things will move fast in the ITC, not as fast as they used to, but considerably faster than they will move in USDC in Maryland. It will be interesting from a strategy perspective to see which route Nintendo chooses to go. So far, no filings have been made by Nintendo in the district court litigation.

Finally, I was catching up on some of the cases that I've written about, and I noticed that in July, Judge Jones agreed to consolidate three cases brought by Unigen Pharmaceuticals over US Patent No. 7,192,611, a patent covering methods for treating osteoarthritis. Unigen sued Walgreens and others for selling an herbal supplement that is a blend of flavans from Acacia catechu and flavanoids from Chinese Skullcap (Scutellaria Baicalensis). Unigen markets this herbal supplement under the mark Univestin. Walgreens filed a motion for summary judgment seeking to invalidate the '611 patent in view of US Patent No. 5,650,433. Judge Jones has a standing order explaining that he normally does not entertain summary judgment motions that implicate claims construction issues until after Markman briefing and (if necessary) a Markman hearing and decision on claim construction. In view of this order, Judge Jones asked for a claims construction "proffer" from Unigen, saying that it would be accepted as true for purposes of summary judgment and limited only by counsel's obligations to have a good faith basis for the construction, consistent with Rule 11. My earlier post explains this in better detail.
Well, Unigen submitted its proffer, and this was accepted by Judge Jones and held sufficient to create a genuine issue of material fact, and hence, order denying summary judgment (at least for now). From Judge Jones' Order:

[T]he court notes that the parties’ evidence shows that osteoarthritis itself is a degradation of joint cartilage.The symptoms of osteoarthritis, or the effects of that degradation, include inflammation and pain. COX-2 is the shorthand name of an enzyme that promotes inflammation. Treatments that target COX-2 seek to inhibit its production to produce an
anti-inflammatory effect.

For each of the independent claims, Unigen proposes a construction that not only
makes each preamble a claim limitation, it makes each preamble a claim limitation with
meaning beyond its plain language. See Philips v. AWH Corp., 415 F.3d 1303, 1313
(Fed. Cir. 2005) (noting that claim terms must be construed according to their “ordinary
and customary meaning” to a person of skill in the art). The “method for treating
osteoarthritis” of claims 1 and 8 becomes a “method for alleviating those symptoms of
osteoarthritis that result from COX-2 mediated inflammation.” The “method for
improving impairments . . . in a living host having arthritis” of claim 15 becomes a
“method for improving impairments . . . that result from COX-2 mediated inflammation
in a living host having osteoarthritis.” The “effective amount” and “host in need thereof”
limitations that follow the preambles of the independent claims are similarly imbued with
meanings that limit them to targeting COX-2 mediated inflammation.

Accepting this claim construction, there is no clear and convincing evidence that
the ‘433 Patent anticipates the ‘611 Patent. The ‘433 Patent is targeted at protecting
cartilage (“chondroprotection”), not at COX-2 mediated inflammation. Indeed, the ‘433
Patent teaches away from anti-inflammatory treatment, noting that “conventional
analgesic and anti-inflammatory agents . . . were not effective against the destruction of
the articular cartilage, and in fact sometimes exhibited adverse effect . . . .” ‘433 Patent
at 1:36-40. If Unigen correctly construes the ‘611 Patent to require a method that targets
COX-2 mediated inflammation, then Walgreen has not provided uncontroverted clear and
convincing evidence that the ‘433 Patent is anticipatory prior art.1
It appears, then, that Unigen’s construction of the independent claims of the ‘611
Patent as limited to targeting COX-2 mediated inflammation is critical to sustaining the
validity of the patent. Expeditiously resolving that dispute may be key in efficiently
resolving these consolidated actions.

That's all for now.