Patent Infringement

August 26, 2013

Eli Lilly Defending Method-of-Use Patent for Blockbuster Drug

Indianapolis, Indiana – Patent lawyers for Eli Lilly and Company (“Lilly”) of Indianapolis, Indiana are in trial again this week in the Southern District of Indiana pursuing patent-infringement allegations against five generic-drug challengers, including AAP Pharmaceuticals of Schaumberg, Illinois and Pliva Hrvatksa of Croatia. At issue is Lilly’s patent on the use of Alimta in conjunction with specific vitamins; patents for the two Alimta treatments, both with and without the supplemental therapy, have been issued by the U.S. Patent Office.

Lilly sells the drug Alimta to treat various types of lung cancer, including mesothelioma. However, certain side effects were troublesome, including treatment-related hematologic and gastrointestinal toxicity. Deaths among some patients were attributed to treatment with Alimta. In response to this concern, Lilly took the unusual step of mandating supplementation of the Alimta protocol with two vitamins, folic acid and vitamin B12. The patentability of that idea is the focus of a patent challenge by five makers of generic drugs.

Patent-infringement litigation between brand-name manufacturers and generic-drug makers is common. In a typical lawsuit, a company which wishes to sell a generic version of a brand-name drug, usually a widely used drug, will try to invalidate the patent on the drug, in the hopes that it could then offer the same drug in generic form.

This litigation is different from traditional patent litigation. The original patent on Alimta, administered as a stand-alone treatment, protects only Alimta’s active ingredient. That patent will expire in 2017. However, the focus of the current litigation is on the combination treatment which involves both Alimta and the vitamin regimen. The patent on the method of administration, if upheld, would expire in 2022.

The generic challengers contend in part that the patent on the combined therapy is invalid, arguing that someone knowledgeable about both nutrition and medicine could have easily concluded that supplementation with B12 and folate might alleviate certain side effects of Alimta.

Lilly, in contrast, argues that the vitamin regimen was not only counterintuitive when it was proposed, it was called “crazy” a leading cancer doctor before testing showed its benefits.

The case, which is before Judge Tanya Walton Pratt, began last Monday and is expected to continue another week.

Practice Tip:

Lilly is facing a significant patent cliff. Its patent for a former top product, the antipsychotic Zyprexa – which once generated $5 billion in annual revenues – expired in 2011. Its current top-selling drug, the antidepressant Cymbalta, will lose patent protection this year. The patent on blockbuster Evista, a breast cancer drug, will expire in early 2014.

Alimta is currently Lilly’s second-best-selling drug. It generated $2.6 billion in sales last year, or about 11 percent of total Lilly’s revenue. Since it was launched in 2004, Alimta has generated $12 billion in total sales for Lilly through 2012.

Under patent law, a court can deem a patent invalid if its claims are “obvious” and anticipated by previous research. In this case, the court will weigh the merits of the separate “method-of-use” patent on the administration of Alimta with B12 and folic acid.

If successful in defending this patent, intellectual-property law will grant market exclusivity to Lilly until 2022, allowing it to exclude generic manufacturers and, thus, to charge the higher brand-name price for Alimta therapy. If the patent is not upheld in this litigation, Lilly will lose the five additional years of exclusivity that the second patent would have afforded.

August 19, 2013

Lifetime Industries Sues Trim-Lok for Patent Infringement

By Overhauser Law Offices, LLC

South Bend, Indiana — Lifetime Industries, Inc. (“LTI”) of Elkhart, Indiana has sued Trim-Lok, Inc. of Buena Park, California in the Northern District of Indiana alleging patent infringement of its “TWO-PART SEAL FOR A SLIDE-OUT ROOM,” Patent No. 6,966,590 (the “‘590 patent”), which has been issued by the U.S. Patent Office.

Plaintiff LTI’s claims are based on the allegedly unauthorized, infringing manufacture, use, importation, sale and/or offer for sale by Defendant Trim-Lok of its seal products including, for example, the two-part seal for a slide-out room product which is mountable to mobile living quarters. LTI contends that these products include a mounting portion and a separate bulb portion that is slidably connected to the mounting portion.

LTI claims that Trim-Lok’s actions infringe one or more claims of the ‘590 patent under the intellectual-property laws of the United States. It further alleges that Trim-Lok has induced others, including its distributors, sales representatives, resellers, dealers and customers, to infringe at least claim 1 of the ‘590 patent by making, using, offering for sale and/or selling the allegedly infringing products.

LTI also asserts that Trim-Lok has known about the ‘590 patent since it was issued. Finally, LTI states in its complaint that, on July 15, 2013, it gave actual notice to Trim-Lok of its belief that Trim-Lok was infringing the ‘590 patent. Plaintiff LTI concludes that, consequently, Trim-Lok acted despite an objectively high likelihood that its actions constituted infringement of a valid patent and/or that it knew or should have known that its actions demonstrated infringement of a valid patent. Accordingly, LTI accuses Trim-Lok’s actions, from at least July 15, 2013, of constituting willful infringement of the ‘590 patent.

In the complaint, filed by patent lawyers for LTI, a single claim of patent infringement, specifically “Infringement of the ‘590 Patent,” is made. LTI asks the court for judgments that:

· the ‘590 patent is directly infringed by Defendant;

· the ‘590 patent is indirectly infringed by Defendant;

· Defendant’s infringement of the ‘590 patent has been willful;

· Defendant be preliminarily and permanently enjoined from manufacturing, using, selling and offering to sell the infringing products in the United States prior to the expiration of the ‘590 patent;

· Plaintiff be awarded damages adequate to compensate it for Defendant’s infringement of the ‘590 patent including lost profits, but in an amount no less than a reasonable royalty, and that such damages be trebled according to 35 U.S.C. § 284; and

· this case is exceptional within the meaning of 35 U.S.C. § 285, and that all costs and expenses of this action, including reasonable attorneys’ fees, be awarded to Plaintiff.

Practice Tip: A patent holder has the right to exclude others in the United States from using, selling, or attempting to sell the patented invention. See 35 U.S.C. § 154(a)(1). A patent has two chief parts. First, it contains a specification describing the invention in such full, clear, concise, and exact terms as to enable any person skilled in the art to make and use the same. Second, a patent includes one or more “claims,” which particularly point out and distinctly claim the subject matter which the applicant regards as his invention. The claim defines the scope of a patent grant.

August 14, 2013

Stryker Prevails Again: Court Considers Zimmer’s Willful Infringement, Triples Jury’s $70 Million Award to $210 Million and Adds Another $18 Million

By Overhauser Law Offices, LLC

Grand Rapids, Michigan — In 2010, Stryker Corp. of Kalamazoo, Michigan; Stryker Puerto Rico, Ltd. and Stryker Sales Corp. (collectively, “Stryker”), sued Zimmer, Inc. and Zimmer Surgical, Inc. of Warsaw, Indiana (collectively, “Zimmer”), alleging infringement of U.S. Patent Nos. 6,022,329; 7,144,383; and 6,179,807, which have been issued by the U.S. Patent Office. A jury awarded $70 million in damages. In August 2013, the U.S. District Court for the Western District of Michigan trebled the jury’s award. The court also awarded supplemental damages, which were also trebled; attorneys’ fees and prejudgment interest.

Stryker and Zimmer are the two principal participants in the market for orthopedic pulsed lavage devices. A modern, orthopedic pulsed lavage device is a combination spray-gun and suction-tube, used by medical professionals to clean wounds and tissue during surgery. In 2010, Stryker sued Zimmer, alleging that Zimmer’s line of Pulsavac Plus pulsed lavage devices infringed three of Stryker’s patents — U.S. Patent No. 6,022,329 (“the ‘329 patent”), U.S. Patent No. 7,144,383 (“the ‘383 patent”) and U.S. Patent No. 6,179,807 (“the ‘807 patent”). Zimmer lost every argument it advanced at claim construction and subsequently lost most of the disputed claims on summary judgment. After claims construction and summary judgment, one infringement claim and 22 invalidity defenses remained for trial.

In February 2013, after two weeks of trial — featuring hundreds of exhibits, more than a dozen witnesses, and multiple days of deliberation — the jury returned a verdict unequivocally in Stryker’s favor. In particular, the jury found: (1) that the Pulsavac Plus products infringed upon the ‘329 patent; (2) that Zimmer failed to establish any of its 22 invalidity contentions; and (3) that Stryker was entitled to $70 million in lost profits.

Zimmer brought ten post-verdict motions for judgment as a matter of law (“JMOL”) or for a new trial:

for JMOL to preclude Stryker from recovering lost profits damages from before November 5, 2010;
for JMOL as to the invalidity of claim 2 of the ‘329 patent, or, in the alternative, for a new trial on the validity of claim 2;
for JMOL barring Stryker from recovering pre-suit damages under the doctrine of laches;
for JMOL of non-infringement of claim 2 of the ‘329 patent, or, in the alternative, for a new trial on the issue of non-infringement of claim 2;
for JMOL limiting Stryker’s damages because Stryker failed to mark its pulsed lavage devices in accordance with 35 U.S.C. § 287(a) and for a new trial on the issue of marking;
for a new trial;
for JMOL that Stryker’s asserted claims under the ‘383 patent are invalid, or, in the alternative, for a new trial on the validity of those claims;
for JMOL that claims 45, 50, 51, and 52 of the ‘807 patent are invalid, or, in the alternative, for a new trial on the validity of those claims;
for JMOL that Zimmer did not willfully infringe Stryker’s patents; and
for JMOL to preclude Stryker from receiving lost profits damages and limiting Stryker’s reasonable royalty recovery, or, in the alternative, for a new trial on damages.

In its 58-page decision, the court discussed the various motions by Zimmer and elucidated the standard for granting a JMOL: Rule 50 of the Federal Rules of Civil Procedure permits a court to render JMOL only if a party has been fully heard on an issue and there is no legally sufficient evidentiary basis for a reasonable jury to find for that party on that issue. It then discussed the standard for granting a new trial following a jury trial: “a court may grant a new trial under Rule 59 if the verdict is against the weight of the evidence, if the damages award is excessive, or if the trial was influenced by prejudice or bias, or otherwise unfair to the moving party.”

The court held that neither the standard for granting JMOL nor the standard for granting a new trial had been met in any instance and denied all ten motions.

Stryker also brought several post-verdict motions; specifically, it sought:

a permanent injunction against Zimmer or, in the alternative, an ongoing royalty;
supplemental damages;
a finding that the case was an “exceptional case” and an award of attorney’s fees;
an award of prejudgment interest; and
enhanced damages for willful infringement.

Each of Stryker’s five motions was granted. The court entered a permanent injunction prohibiting Zimmer from manufacturing, marketing or selling any products found to have infringed the ‘807 patent, including the infringing Pulsavac Plus products. This was held to be appropriate as the evidence had shown that Zimmer’s sale of infringing products had cost Stryker between 15% and 18% of its market share. Such a loss of market share to an infringer was cited as a textbook example of irreparable harm which, in turn, supported the injunction.

Supplemental damages were also awarded. The court held that the jury’s $70 million award to Stryker of lost profits reflected the damages Stryker had suffered only through November 30, 2012. Subsequently, Zimmer had supplemented the sales data for its infringing products, reflecting sales from December 1, 2012 through February 28, 2013. Based on those supplemental data, Stryker’s damages expert calculated Stryker’s additional lost profits for that time frame to be $2,351,257.66, which the court awarded.

Stryker also moved for an award of attorneys’ fees under 35 U.S.C. § 285. Section 285 provides that, if the prevailing party establishes by clear and convincing evidence that the case is “exceptional,” the court may exercise its discretion to award attorneys’ fees. The court cited various factors that could be used in determining whether a case was exceptional, for example: “willful infringement, fraud or inequitable conduct in procuring the patent, misconduct during litigation, vexatious or unjustified litigation, [or] conduct that violates Federal Rule of Civil Procedure 11.” The court awarded Stryker’s attorneys’ fees, holding that that the jury’s finding of willful infringement weighed heavily in favor of such an award (“indeed, when a trial court denies attorney fees in spite of a finding of willful infringement, the court must explain why the case is not ‘exceptional’ within the meaning of the statute.”)

Prejudgment interest of $11,167,670.50 was also granted on both the jury award and the supplemental lost-profit damages Stryker incurred from December 1, 2012 to February 28, 2013. In addition, for the same reasons the court found this to be an “exceptional case,” the court awarded Stryker additional prejudgment interest on its reasonable attorney’s fees.

Stryker’s final motion was for enhanced damages under 35 U.S.C. § 284, based on Zimmer’s willful infringement. Under § 284, “the court may increase the damages up to three times the amount found or assessed” at trial. For this determination, the court referred to Read Corp. v. Portec, Inc.. In Read, the Federal Circuit held that the “paramount determination in deciding to grant enhancement and the amount thereof is the egregiousness of the defendant’s conduct based on all the facts and circumstances.” In evaluating the egregiousness of the defendant’s conduct, courts typically rely on the nine Read factors, which are:

whether the infringer deliberately copied the patentee’s ideas or design;
whether the infringer investigated the scope of the patent and formed a good faith belief that it was invalid or not infringed;
the infringer’s conduct during litigation;
the infringer’s size and financial condition;
closeness of the case;
duration of the infringing conduct;
remedial actions, if any, taken by the infringer;
the infringer’s motivation for harm; and
whether the infringer attempted to conceal its misconduct.

The court found that all nine Read factors favored substantial enhancement of the jury’s award. It noted that, regarding the first factor, multiple trial witnesses testified that Zimmer deliberately copied Stryker’s patented inventions. On the second factor, Zimmer had presented no evidence that it had retained intellectual property counsel to advise it about the scope of Stryker’s patents to form a good faith belief about invalidity or infringement, or that it had or had otherwise investigated whether it was likely infringing. The third factor also favored enhancement, as Zimmer had needlessly delayed in producing requested information concerning its application for a patent for the Pulsavac Plus. With respect to the fourth factor, the court noted that Zimmer is a multi-billion dollar company with reported annual profits in excess of three-quarters-of-a-billion dollars. It opined that while a $70 million verdict may sound large in the abstract, in the context of the substantial size and profitability of Zimmer, $70 million may not be enough, without enhancement, to deter infringing conduct.

As to the fifth factor, the court noted for again that this was not a close case. Every major decision — from claim construction through post-verdict motions — had gone against Zimmer. On the sixth factor, the court commented that Zimmer’s infringement had spanned more than a decade, from 2000 all the way through the date of the opinion. With respect to the seventh factor, the court observed that at no point during its 12-plus years of infringement had Zimmer taken any remedial action to stop infringement or mitigate damages, including the two-plus years covered by the litigation. In fact, as of the date the opinion was written, Zimmer was still manufacturing and selling the infringing products. The eighth factor also counseled in favor of enhancement, principally because Zimmer and Stryker had been the only major competitors in the orthopedic pulsed lavage device market. As a result, Zimmer’s infringement of Stryker’s patents could only have been motivated by a desire to harm Stryker by depriving it of market share. Finally, on the ninth factor, although Zimmer had not attempted to hide the entirety of its misconduct, it had attempted to prevent Stryker from discovering certain aspects of its infringement in the period before the trial.

The court held that its analysis of the Read factors “overwhelmingly favor enhancement.” In accordance with that analysis, the court trebled both the jury’s award of $70 million and the court’s award of supplemental damages.

In total, Zimmer has been ordered to pay Stryker over $228 million. According to Reuters, Zimmer plans to appeal both the jury verdict and the recent rulings by the court.

Practice Tip:

While Zimmer’s decision to infringe was presumably a business strategy, the findings of willfulness — and, later, egregiousness — made this approach an extremely expensive one. The court acknowledged and considered Zimmer’s tactic in its opinion, stating, “Zimmer chose a high-risk/high-reward strategy of competing immediately and aggressively in the pulsed lavage market and opted to worry about the potential legal consequences later.”

Willfulness consists of two elements: (1) an objective element that is often, but not always, a question of law, and (2) a subjective element that is inherently a question of fact, to be decided by the jury.

Under the first prong, if an “accused infringer’s position is susceptible to a reasonable conclusion of no infringement,” the infringer’s conduct cannot be objectively unreasonable. Conversely, an action is objectively unreasonable if the infringer acted despite an objectively high likelihood that its actions constituted infringement of a valid patent.

When considering the second prong — the element of subjective willfulness — fact-finders should consider: (1) whether the infringer copied the patentee’s commercial products; (2) whether the infringer presented evidence that it obtained legal opinions of patent counsel to justify its infringing actions; (3) whether the infringer attempted to avoid infringement by designing around the patents; and (4) whether the infringer acted in accordance with the standards of commerce.
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August 1, 2013

Endotach Sues Cook Medical for Infringement of Patented Endovascular Technology

By Overhauser Law Offices, LLC

Indianapolis, Indiana — Endotach, LLC (“Endotach”) of Plano, Texas sued alleging that Cook Medical Incorporated (“Cook Medical”) of Bloomington, Indiana infringed two patents: Endovascular Bypass Graft, Patent No. 5,122,154, and Endovascular Stent with Secure Mounting Means, Patent No. 5,593,417, which have been issued by the U.S. Patent Office.

The patents, both of which were issued in the 1990s, were granted to Dr. Valentine Rhodes, an award-winning surgeon who practiced in the field of vascular medicine for over 30 years. The patents are directed to intraluminal and endovascular grafts for placement within a blood vessel, duct or lumen to hold it open. As it pertains to this lawsuit, the patents-in-suit are used for revascularization of aneurysms or stenosis occurring in blood vessels which includes anchoring projections to aid in securing the graft in place within the blood vessel.

Upon the death of Dr. Rhodes, the patents-in-suit passed as part of his estate to his wife, Brenda Rhodes. While Mrs. Rhodes remains the owner of the patents, Endotach asserts that it is the exclusive licensee and has the right to enforce the patents against all infringers.

In its complaint, patent attorneys for Endotach asserted infringement of one or more claims in each of the patents-in-suit. It seeks a judgment that the patents-in-suit have been infringed, either literally and/or under the doctrine of equivalents; damages, including treble damages; costs; interest; attorneys’ fees and an injunction.

Practice Tip:

This complaint was filed to err on the side of caution. A previous matter, Endotach LLC v. Cook Medical Incorporated, Civil Action No. 1:12-cv-01630-LJM-DKL, which was initiated by a complaint making similar allegations, is currently pending before the same court. However, in that matter, Cook Medical has challenged the sufficiency of the transfer of the exclusive license to Endotach and, thus, Endotach’s standing to bring that prior lawsuit. Pursuant to that allegation, Cook Medical asserted that the matter should be dismissed. That motion is still pending.

Endotach entered into a subsequent agreement that purports to remedy any deficiencies related to standing. It then filed this current complaint. It has indicated its intention to consolidate this later-filed action with the matter currently before the court.

July 26, 2013

Lippert Components Manufacturing Sues AL-KO Kober for Patent Infringement

By Overhauser Law Offices, LLC

South Bend, Indiana — Lippert Components Manufacturing, Inc. (“Lippert”) of Goshen, Indiana sued AL-KO Kober, LLC (“AL-KO”) of Elkhart, Indiana alleging patent infringement of three patented inventions: Retractable Room Actuation Assembly for Recreational Vehicle Having Engagement Means for Maintaining Constant Distance Between Drive Members and Engagement Members, Patent No. 8,235,455 (the “‘455 Patent”); Retractable Room Actuation Assembly for Recreational Vehicle Having Engagement Mechanism for Maintaining Constant Distance Between Drive Members and Engagement Members, Patent No. 8,240,744 (the “‘744 Patent”); and Retractable Room Actuation Assembly for Recreational Vehicle, Patent No. RE44,002 (the “‘002 Patent”); which have been issued by the U.S. Patent Office.

Lippert claims ownership of the three patents-in-suit, which related to a retractable room assembly used in extending and retracting slide-out compartments for recreational vehicles. The patents were granted in 2012 and 2013.

AL-KO is accused of having made, used, offered for sale and/or sold its retractable room actuation assembly for use in extending/retracting recreational vehicle slide-out compartments. Lippert notified AL-KO of Lippert’s ‘002 Patent, ‘455 Patent and ‘744 Patent and claimed infringement of those patents in a letter dated June 28, 2013 and received by AL-KO on July 1, 2013.

Patent attorneys for Lippert sued AL-KO on July 11, 2013 claiming patent infringement by AL-KO. The complaint also asserts that AL-KO has induced and contributed to others’ use of the patents-in-suit, including at least Augusta RV, by selling to them and instructing them to use Lippert’s intellectual property.

The complaint lists the following:

· Count I: ‘002 Patent Infringement

· Count II: ‘455 Patent Infringement

· Count III: ‘744 Patent Infringement

Lippert also contends that AL-KO has engaged in its conduct willfully and in complete disregard of, or with indifference to, Lippert’s rights and interests. It asks the court to consider this an “exceptional case” as that term is defined in 35 U.S.C. §285.

Lippert, via its patent attorneys, asks for an injunction; for an accounting; for damages, up to treble the amount of actual damages; for attorneys’ fees and costs; and that the court require AL-KO to notify AL-KO’s customers of AL-KO’s unlawful acts.

Practice Tip: While the exact contents of the letter to AL-KO are unclear from the complaint, a company that receives a notification letter alleging infringement is well advised to contact intellectual-property counsel promptly. The receipt of such a letter may constitute a legally significant event which triggers a duty by the recipient to take action, such as investigate whether any of the infringement claims in the letter have merit. If the letter threatens legal action, the alleged infringer should consider initiating a suit under the Declaratory Judgment Act. Declaratory judgment actions are frequently filed in intellectual-property matters, especially patent litigation. Such a suit allows the potential defendant not only to choose its own forum, to the extent that the forum is consistent with jurisdictional restrictions, but also to remove an ever-present cloud of potential litigation and potential damages for patent infringement that may be continuing to accrue.

July 25, 2013

CarCheckup Alleges Infringement by CarMD.com and Innova Electronics of Patented Vehicle Code Readers

By Overhauser Law Offices, LLC

Indianapolis, Indiana — CarCheckup, LLC of Carmel, Indiana has sued CarMD.com Corp. (“CarMD”) and Innova Electronics Corp. (“Innova”), both of Irvine, California, for infringing two patents, Patent Nos. 6,807,469 (the “‘469 Patent) and 6,925,368 (the “‘368 Patent) both titled “Auto Diagnostic Method and Device,” which have been issued by the U.S. Patent Office.

CarCheckup sells a device designed to improve teen-driver safety, track business mileage and explain the check-engine light in vehicles compliant with on-board diagnostic II (also known as “OBD-II”) technology.

CarMD sells a “Handheld Device and Software Solution Kit,” along with “Vehicle Health System” products. The CarMD Vehicle Health System is a consumer product designed to enable car owners to monitor a vehicle’s function, to catch hidden problems and to diagnose dashboard warning lights. CarMD’s products work on newer-model vehicles with on-board diagnostic technology by retrieving diagnostic codes from the vehicle’s computer. By using a CarMD code reader, a car owner, even one unsophisticated in car repair, can identify the problem(s) with his or her vehicle.

CarMD sells its products directly to consumers via infomercials, on its website at www.CarMD.com, through the Home Shopping Network and on www.Amazon.com. Its products are also sold at various retail outlets, including Pep Boys. Innova, an allegedly related enterprise, sells two different code readers in the United States and maintains web sites at www.CodeReader.com and www.Innova.com.

Patent attorneys for CarCheckup sued CarMD and Innova, asserting a right to relief against them jointly, for infringing the ‘469 and ‘368 Patents, which are owned by CarCheckup. CarCheckup alleges that, as part of a joint endeavor, CarMD sells and offers for sale infringing CarMD products, while Innova distributes and manufactures the products. CarCheckup alleges that one or both of the Defendants has known about the patents-in-suit since at least as early as December 2012.

The complaint lists the following claims:

· Count I: Infringement of the ‘469 Patent against CarMD and Innova

· Count II: Infringement of the ‘368 Patent against CarMD and Innova

CarCheckup asks the court for a judgment against CarMD and Innova; for a finding that the infringement has been willful and deliberate; for an award of damages adequate to compensate CarCheckup for the infringement it alleges, but in no event less than a reasonable royalty; for treble damages; for an injunction; and for a finding that this is an exceptional case and, thus, for an award of reasonable attorneys’ fees and costs.

Practice Tip: The law of the “reasonable royalty” has been in transition recently. The “25% rule,” an approach that allocated 25% of the profits from an infringement to the patentee and the remaining 75% to the infringer, has been abandoned. Long used in federal courts to establish a reasonable royalty as compensation for patent infringement under § 284 of the Patent Act, it was rejected by the Federal Circuit in 2011. In its ruling in Uniloc v. Microsoft, the court held: “the 25 percent rule of thumb is a fundamentally flawed tool for determining a baseline royalty rate in a hypothetical negotiation. Evidence relying on the 25 percent rule of thumb is thus inadmissible under Daubert and the Federal Rules of Evidence, because it fails to tie a reasonable royalty base to the facts of the case at issue.”

July 24, 2013

Diamond Back Gutter Covers and Daniel Feldhaus Sue Midwest Enterprises for Patent Infringement

By Overhauser Law Offices, LLC

Lafayette, Indiana — Diamond Back Gutter Covers, Inc. (“Diamond Back”) of Lafayette, Indiana and Daniel E. Feldhaus (“Feldhaus”) of Monticello, Indiana sued Midwest Enterprises of Saint Clair, Missouri alleging infringement of its “Gutter Debris Cover,” Patent No. 7,627,991, (the “‘991 Patent”) which has been issued by the U.S. Patent Office.

Diamond Back manufactures and sells products related to the protection of gutter and drainage systems. Diamond Back states that Midwest Enterprises is in a similar business and also does business under the name E-Z Products.

A complaint against Midwest Enterprises was filed by patent attorneys for Diamond Back. It focuses on Midwest Enterprises’ EZ Double Lock gutter protectors, which Diamond Back asserts infringe upon the ‘991 Patent. That patent, for a Gutter Debris Cover, was issued to Feldhaus in December 2009; Diamond Back is licensed to use the patent.

Specifically, the complaint asserts that Midwest Enterprises has been and still is infringing the ‘991 Patent by making, selling and/or using a gutter-protection system embodying one or more of the patented inventions or by inducing others to infringe the ‘991 Patent.

In June 2012, correspondence to Midwest Enterprises alerted them that Diamond Back believed that they were infringing. Diamond Back claims that Midwest Enterprises’ actions which continued after having received notice, constitute willful conduct in disregard of its rights in the ‘991 Patent.

Diamond Back asserts that this is an exceptional case as defined by 35 U.S.C. 285. It is asking the court for an injunction; for the destruction of infringing goods; for the destruction of items relating to the making and marketing such goods; for corrective advertising; for damages, including treble damages; and for attorneys’ fees.

Practice Tip: If a court finds that a patent has been infringed upon, it may then consider the additional issue of whether the infringement was willful. Infringing behavior that continued despite an allegation of infringement can support such a finding. The determination that an infringement was “willful” can, in turn, increase damages significantly.

June 12, 2013

Eli Lilly Sues Perrigo for Patent Infringement of Axiron

By Overhauser Law Offices, LLC

Indianapolis, Ind. — Patent lawyers for Eli Lilly & Co. of Indianapolis, Ind. (“Lilly”), Eli Lilly Export S.A., of Vernier/Geneva, Switzerland (a wholly owned subsidiary of Eli Lilly & Co.) and Acrux DDS Pty Ltd. of West Melbourne, Victoria, Australia (“Acrux”) filed a patent infringement suit alleging that Perrigo Company of Allegan, Mich. (“Perrigo Company”) and Perrigo Israel Pharmaceuticals Ltd. of Bnei Brak, Israel (“Perrigo Israel,” a wholly owned subsidiary of Perrigo Company), infringed Patent Nos. 8,435,944; 8,419,307; and 8,177,449, filed with the U.S. Patent Office.

Lilly is engaged in the business of research, development, manufacture and sale of pharmaceutical products. Acrux is engaged in the development and commercialization of pharmaceutical products for sale. Both sell their products worldwide.

Perrigo Company and Perrigo Israel (collectively, “Perrigo”) are pharmaceutical companies that develop, manufacture, market and distribute generic pharmaceutical products for sale throughout the United States. These products include pharmaceuticals, infant formulas, nutritional products, dietary supplements and active pharmaceutical ingredients. Perrigo’s consumer-healthcare segment includes over 2,100 store-brand products which are marketed to major national chains such as Wal-Mart, CVS, Walgreens, Sam’s Club and Costco. They also sell to major drug wholesalers.

Lilly is the holder of approved New Drug Application No. 022504 for the manufacture and sale of a transdermal testosterone solution made at a concentration of 30 mg/1.5L, which is marketed by Lilly under the trade name “Axiron.” Axiron is a pharmaceutical drug which raises the amount of testosterone in a patient’s body. Recent sales of Axiron are estimated to be $229 million annually, according to Symphony Health Solutions. Axiron is subject to Patent Nos. 8,435,944, 8,419,307, 8,177,449 (the “‘944 patent,” the “‘307 patent,” and the “‘449” patent, respectively). All three patents have been licensed to Lilly.

Perrigo announced on May 29, 2013 that it had filed an Abbreviated New Drug Application (“ANDA”) with the U.S. Food and Drug Administration (“FDA”) for approval of a generic version of Axiron. Prior to filing the ANDA, No. 204255, Perrigo sent a letter to Lilly to inform Lilly that “in Perrigo’s opinion and to the best of its knowledge, the ‘449 patent is invalid, unenforceable, and/or will not be infringed by the commercial manufacture, use, sale, or importation of the drug product described in Perrigo’s ANDA.” Perrigo sent similar letters regarding the ‘307 and ‘944 patents.

After receiving the letter, Lilly filed suit alleging infringement of the three patents. It states in its complaint that the ‘944 patent claims, inter alia, methods of increasing the testosterone blood level of an adult male by applying a transdermal drug-delivery composition that contains testosterone. The ‘307 patent includes in its claims a method of increasing the level of testosterone in the blood by applying a liquid pharmaceutical that contains testosterone. The claims for the ‘449 patent include a method of transdermal administration of a physiologically active agent. All three patents are used in connection with Axiron.

Lilly’s complaint lists the following claims:

· Count I for Patent Infringement (Direct Infringement of U.S. Patent No. 8,435,944)

· Count II for Patent Infringement (Inducement to Infringe U.S. Patent No. 8,435,944)

· Count III for Patent Infringement (Contributory Infringement of U.S. Patent No. 8,435,944)

· Count IV for Patent Infringement (Direct Infringement of U.S. Patent No. 8,419,307)

· Count V for Patent Infringement (Inducement to Infringe U.S. Patent No. 8,419,307)

· Count VI for Patent Infringement (Contributory Infringement of U.S. Patent No. 8,419,307)

· Count VII for Patent Infringement (Direct Infringement of U.S. Patent No. 8,177,449)

· Count VIII for Patent Infringement (Inducement to Infringe U.S. Patent No. 8,177,449)

· Count IX for Patent Infringement (Contributory Infringement of U.S. Patent No. 8,177,449)

· Count X for Declaratory Judgment (Infringement of U.S. Patent No. 8,435,944)

· Count XI for Declaratory Judgment (Infringement of U.S. Patent No. 8,419,307)

· Count XII for Declaratory Judgment (Infringement of U.S. Patent No. 8,177,449)

Lilly’s lawsuit asks for an injunction to stop Perrigo from producing the generic version of Axiron until the expiration of Lilly’s three patents-in-suit. In addition, Lilly asks that the court declare the three patents to be valid and enforceable; that Perrigo infringed upon all three by, inter alia, submitting ANDA No. 204255 to obtain approval to commercially manufacture, use, offer for sale, sell or import its generic version of the drug into the United States; that Perrigo’s threatened acts constitute infringement of the three patents; that FDA approval of Perrigo’s generic drug be effective no sooner than the expiration date of the patent that expires last; that this is an exceptional case; and for costs and attorneys’ fees.

Practice Tip: The FDA’s ANDA process for generic drugs has been abbreviated such that, in general, the generic drug seeking approval does not require pre-clinical (animal and in vitro) testing. Instead, the process focuses on establishing that the product is bioequivalent to the “innovator” drug that has already undergone the full approval process. The statute that created the abbreviated process, however, had also created some interesting issues with respect to the period of exclusivity. For an interesting look at some of these issues, see here.
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June 10, 2013

Patent Trolls – A Growing Problem Receives National Attention

By Overhauser Law Offices, LLC

Litigation by patent-assertion entities (“PAEs,” commonly known as “patent trolls”) has skyrocketed in the last two years. A chart released by the White House in a June 2013 report entitled “Patent Assertion and U.S. Innovation” demonstrates that such trolls now file over 60% of all patent-infringement lawsuits. (The red portion of the bars shows patent lawsuits brought by PAEs.)

The patent-trolling business model includes no productive operations. Instead, investors’ money is used to purchase patents for the sole purpose of alleging infringement and extracting payment under the threat of litigation. Because litigation can be very costly, the patent trolls’ targets face a difficult decision: settle (typically by buying a license from the troll) or pay significant litigation expenses — and face the potential of losing at trial, which is somewhat unlikely but where damages can be enormous. In contrast, the trolls often use contingency-fee attorneys and, thus, have little more at stake in any given lawsuit than a few hundred dollars for a court-filing fee.

Many view this type of litigation with suspicion, if not outright derision. At least four patent-reform bills are pending in Congress and the Obama Administration recently released a harsh indictment detailing the damage to innovation and the economy caused by the “abusive practices in litigation” committed by patent trolls. Various measures to curb frivolous patent litigation have been suggested, including increasing transparency of patent ownership and establishing a website through the U.S. Patent and Trademark Office to inform patent-troll victims of their rights.

June 7, 2013

CordaRoy’s Originals Sues Lovesac for Infringement of Patented Bag-Bed Assembly

By Overhauser Law Offices, LLC

Evansville, Ind. — CordaRoy’s Originals, Inc. of Gainesville, Fla. (“CordaRoy’s”) has sued The Lovesac Corporation of Stamford, Conn. (“Lovesac”) alleging infringement of Patent No. 7,131,157, “Bag Bed Assembly,” (the “‘157 Patent”) which has been issued by the U.S. Patent Office.

Patent lawyers for CordaRoy’s filed a patent infringement suit alleging that Lovesac has been and continues to infringe on CordaRoy’s ‘157 Patent for a bag-bed assembly by using, selling, offering to sell, and/or importing a “knock-off” bag-bed assembly which embodies the patented invention. It is also alleged that Lovesac has induced others to do likewise. CordaRoy’s asserts that the claimed infringement has been, and continues to be, intentional, willful and deliberate.

In its complaint, CordaRoy’s asks for a judgment that the ‘157 Patent has been infringed; that Lovesac be required to account for all of its profits and advantages realized from the alleged infringement of the ‘157 Patent; for an award of lost profits and a reasonable royalty; for an award of treble damages upon a finding of willful, intentional, and deliberate infringement; for an injunction against further actions of infringement; for pre-judgment interest; and for costs and attorney’s fees.

A jury trial has been demanded.

Practice Tip: If a court finds that a patent has been infringed upon, it may then consider the additional issue of whether the infringement was willful. Infringing behavior that continued despite an allegation of infringement can support such a finding. The determination that an infringement was “willful” can, in turn, increase damages significantly.