Teva Branded Pharmaceutical Products R&D, Inc., et al. v. Amneal Pharmaceuticals of New York, LLC, et al., No. 2024-1936 (Fed. Cir. (D.N.J.) Dec. 20, 2024). Opinion by Prost, joined by Taranto and Hughes.
Teva obtained FDA approval for its ProAir® HFA Inhalation Aerosol product, which contains both drug and device components (the device components being the physical machinery of the inhaler). The FDA approved the product as a drug because the primary mode of therapeutic action comes from the active ingredient, albuterol sulfate. As relevant here, Teva listed five patents in the Orange Book for its ProAir® HFA that relate to improvements in the device parts of inhalers, specifically the dose counter and the inhaler canister. None of the claims explicitly require the presence of an active drug.
Amneal filed an Abbreviated New Drug Application seeking approval to market a generic version of Teva’s ProAir® HFA. Amneal also filed a paragraph IV certification of noninfringement, prompting Teva to sue for infringement.
The district court found for Amneal and ordered Teva to delist the five asserted patents because they do not “claim[] the drug for which the applicant submitted the application” as required by 21 U.S.C. § 355(b)(1)(A)(viii)(I). Teva appealed.
The Federal Circuit affirmed. The court began by summarizing the statutory and regulatory background for FDA approval of market drugs. The court then upheld the district court’s statutory interpretation, rejecting Teva’s two core arguments.
First, Teva argued that its patents “claim the drug” under the statute because “a patent claims the drug if it reads on the approved drug.” The Federal Circuit rejected this interpretation “as allowing for the listing [in the Orange Book] of far more patents than Congress has indicated.” Instead, a patent claims the drug “when it particularly points out and distinctly claims the drug—not simply when the claim could somehow be interpreted to read on the drug.”
Second, Teva argued that a patent claiming any component of a drug is listable in the Orange Book. Again the Federal Circuit disagreed, explaining that “to qualify for listing, a patent must claim at least what made the product approvable as a drug in the first place—its active ingredient.” Thus, Teva could not list its patents just because they claim the dose-counter and canister parts of the ProAir® HFA.
The Federal Circuit summarized its analysis as leading “to only one conclusion: To list a patent in the Orange Book, that patent must, among other things, claim the drug for which the applicant submitted the application and for which the application was approved. And to claim that drug, the patent must claim at least the active ingredient. Thus, patents claiming just the device components of the product approved in an NDA do not meet the listing requirement of claiming the drug for which the applicant submitted the application.”
For these reasons, the Federal Circuit affirmed the district court’s order requiring Teva to delist its patents from the Orange Book.
CloudofChange, LLC v. NCR Corp., No. 2023-1111 (Fed. Cir. (W.D. Tex.) Dec. 18, 2024). Opinion by Stoll, joined by Dyk and Reyna.
CloudofChange sued NCR for infringement of two patents directed to a system to simplify building online point of sale (“POS”) systems for non-expert business operators. The patents’ system claims involve multiple components, including local hardware, software hosted by a vendor on remote web servers, and an internet connection between the two. The accused product was “NCR Silver,” an online POS builder with certain hardware, remote web-server-hosted software, and internet connection elements.
It was undisputed that NCR does not provide all the necessary components of the accused system. For example, NCR contractually requires its customer users to maintain an internet connection, which is necessary to use NCR Silver.
CloudofChange pursued only a single theory of infringement: that NCR directly used the claimed system by putting it into beneficial use under the Federal Circuit’s Centillion precedent. CloudofChange asserted that NCR controls and benefits from each component recited in the claimed system and thus, under Centillion, uses the system. A jury found that NCR directly infringed and that the claims were not proved invalid, and awarded damages. NCR moved for judgment as a matter of law (JMOL) arguing that no reasonable jury could find infringement. The district court denied the motion, and NCR appealed.
On appeal, the Federal Circuit began by agreeing with the district court “that it is NCR’s merchants (not NCR) that use the claimed system.” The court explained that “NCR’s merchants put the system into service because they initiate at the POS terminal a demand for service … and benefit from the back end providing that service.” Thus, NCR’s merchants “control the system as a whole and obtain benefit from it.”
The Federal Circuit next turned to whether NCR is vicariously liable for its merchant-customers’ use of the claimed system. The court ruled NCR is not vicariously liable: “NCR does not direct or control its merchants to subscribe to the NCR Silver system, download the NCR Silver app on their POS terminals, or put the NCR Silver system into use by initiating action at the POS terminals to cause the NCR Silver software to modify its POS terminals. NCR’s merchants take these actions of their own accord.”
Thus, the Federal Circuit reversed the district court’s denial of JMOL and vacated the jury verdict.
Palo Alto Networks, Inc. v. Centripetal Networks, LLC, No. 2023-1636 (Fed. Cir. (PTAB) Dec. 16, 2024). Opinion by Stoll, joined by Dyk and Stark.
Centripetal Networks owns a patent directed to a computing system that can correlate incoming and outgoing computer signal packets, and then, “responsive to the correlating,” transmit an indication that the packets are coming from a specific host.
Palo Alto Networks (PAN) filed an IPR petition challenging claims 1-18 as obvious over a combination of three prior-art references, including the “Paxton” and “Sutton” references. PAN relied on Paxton for all limitations except the requirement to transmit an indication of the host responsive to the correlating. For that limitation, PAN relied on Sutton.
The Patent Trial and Appeal Board concluded that PAN had not established obviousness of the challenged claims. The Board explained that Paxton disclosed a correlation “but with no specific actions post-correlation,” while Sutton disclosed a transmission, but the transmission was “unrelated to any correlation” and lacked “the necessary bridge showing that one of ordinary skill in the art would have appreciated that the transmission would be responsive to the correlation.” PAN appealed.
The Federal Circuit reversed, ruling that “the Board erred by not clearly explaining its holding or rationale regarding motivation to combine and whether the proposed combination teaches the final limitation of claim 1: transmitting an indication of the first host responsive to the correlating.” In particular, “the Board failed to make the requisite finding on motivation to combine, and … failed to explain what it meant by ‘necessary bridge.’”
In addition, the Board failed to resolve whether Paxton as modified by Sutton would have taught the required transmitting responsive to the correlation. The Board “erred by looking at the references individually.” The Federal Circuit held that the Board’s analysis “constitutes legal error” because “Paxton and Sutton must be read together, not in isolation.” The court thus reversed and remanded “for the Board to clarify and explain its holding.”