CAFC Rules En Banc: Terms in Product-by-Process Claims are Limitations in Determining Infringement

Abbott Laboratories v. Sandoz, Inc., (Fed. Cir. 2009) (en banc in part) 07-1400

While considering an appeal of a claim construction ruling from the Eastern District of Virginia, the court suddenly found itself faced with a dilemma regarding the construction of certain product-by-process claims: the plaintiff argued that the district court erred in construing the process steps of the claims by using rule in Atlantic Thermoplastics, 970 F.2d at 846-47, which stated that "process terms in product-by-process claims serve as limitations in determining infringement." According to the plaintiff, the proper construction lied with Scripps Clinic & Research Foundation v. Genentech, Inc., 927 F.2d 1565, 1583 (Fed. Cir. 1991), which stated that "the correct reading of product-by-process claims is that they are not limited to product prepared by the process set forth in the claims."

Acting sua sponte, (or as Professor Crouch puts it: "en banc sua sponte sub secretum") the CAFC took the issue for en banc resolution, despite the fact that the court received no briefing and held no argument on the issue.

In Atlantic Thermoplastics, the CAFC considered the scope of a product-by-process claim that recited "[t]he molded innersole produced by the method of claim 1." The patentee urged that competing, indistinguishable innersoles made by a different method nonetheless infringed. The CAFC rejected the patentee’s position, and construed the product-by-process claims as limited by the process.

Looking at the line of 7 Supreme Court cases dealing with the issue (spanning over the years 1874-1938), the CAFC concluded that the Atlantic Rule "finds extensive support in Supreme Court opinions that have addressed the proper reading of product-by-process claims . . .
The Supreme Court has long emphasized the limiting requirement of process steps in product-by-process claims. " Moreover,

[T]he Supreme Court has reiterated the broad principle that "[e]ach element contained in a patent claim is deemed material to defining the scope of the patented invention." Warner-Jenkinson, 520 U.S. at 19. Although Warner-Jenkinson specifically addressed the doctrine of equivalents, this rule applies to claim construction overall. As applied to product-by-process claims, Warner-Jenkinson thus reinforces the basic rule that the process terms limit product-by-process claims. To the extent that Scripps Clinic is inconsistent with this rule, this court hereby expressly overrules Scripps Clinic.

Furthermore, the majority opinion (Chief Judge Michel and Judges Rader, Bryson, Gajarsa, Linn, Dyk, Prost, and Moore) stated that

The dissenting opinions lament the loss of a "right" that has never existed in practice or precedent – the right to assert a product-by-process claim against a defendant who does not practice the express limitations of the claim. This court’s en banc decision in no way abridges an inventor’s right to stake claims in product-by- process terms. Instead this decision merely restates the rule that the defining limitations of a claim – in this case process terms – are also the terms that show infringement.

Thus this court does not question at all whether product-by-process claims are legitimate as a matter of form. The legitimacy of this claim form was indeed a relevant issue in the nineteenth century . . . However, this court need not address that settled issue. The issue here is only whether such a claim is infringed by products made by processes other than the one claimed. This court holds that it is not.

Product-by-process claims, especially for those rare situations when products were difficult or impossible to describe, historically presented a concern that the Patent Office might deny all product protection to such claims. See In re Butler, 17 C.C.P.A. 810, 813 (CCPA 1930) ("Process claims are valuable, and appellant thinks he is entitled to them; but it is submitted that he should not be limited to control of the process when the article which that process produces is new and useful."). In the modern context, however, if an inventor invents a product whose structure is either not fully known or too complex to analyze (the subject of this case – a product defined by sophisticated PXRD technology – suggests that these concerns may no longer in reality exist), this court clarifies that the inventor is absolutely free to use process steps to define this product. The patent will issue subject to the ordinary requirements of patentability. The inventor will not be denied protection. Because the inventor chose to claim the product in terms of its process, however, that definition also governs the enforcement of the bounds of the patent right. This court cannot simply ignore as verbiage the only definition supplied by the inventor.

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Newman's Dissent (Joined by Mayer and Lourie)

Heretofore a new product whose structure was not fully known or not readily described could be patented as a product by including in the product description sufficient reference to how it can be made, to distinguish the new product from prior art products. Patentability was determined as a product, independent of any process reference in the claim, and validity and infringement were based on the product itself. This expedient for patenting products whose structure was not fully known at the time of filing the patent application has been called the "rule of necessity." It was pragmatic, fair, and just, for it attuned patent law and practice to the realities of invention.

Today the court rejects this expedient and discards this practice, ruling that all claims containing a process term under the rule of necessity now must be construed, for purposes of infringement, as limited to use of any process term that was used to assist in defining the product. That is, such a product is not patented as a product, however it is produced, but is limited to the process by which it was obtained. This is a new restraint on patents for new products, particularly today’s complex chemical and biological products whose structure may be difficult to analyze with precision. It is a change of law with unknown consequences for patent-based innovation.

The court acts sua sponte, without explanation of what policy is intended to be served by this change, without consideration of the technologies that may be adversely affected by elimination of this expedient, without notice to those whose property rights may be diminished. In so doing, the court departs from statute, precedent, and practice. This change is as unnecessary as it is flawed, gratuitously affecting inventions past, present, and future. I respectfully dissent.

NOTES:

- The en banc ruling clearly mitigates a potential certiorari showdown at the SCOTUS, which would have had a good chance of review if the Scripps ruling prevailed.

- While there appears to be some legitimate concern over procedural violations on the sua sponte ruling, Hal Wegner has notes that the CAFC's actions follow previous, similar actions in Kingsdown Medical Consultants, Ltd. v. Hollister Inc., 863 F.2d 867 (Fed. Cir. 1988)(Markey, C.J.)(en banc in part); Midwest Industries, Inc. v. Karavan Trailers, Inc., 175 F.3d 1356 (Fed.Cir.1999)(Bryson, J.)(en banc in part); and DSU Medical Corp. v. JMS Co., Ltd., 471 F.3d 1293 (Fed. Cir. 2006)(Rader, J.)(en banc in part).

- This ruling appears to follow a judicial trend of firming up the notice provision for patentees and their claim terms, and adding a further level of complexity to patent claim drafting: while insufficient claim detail may lead to invalidity, additional claim details may foreclose avenues of infringement.

- For whatever it's worth, 2 of the 3 dissenting judges hold PhD's in the chemical arts (Newman: PhD Yale, 1952, Lourie: Univ. of Penn., 1965).