Latest 5 Cases This Week: In re Lantus Direct Purchaser Antitrust Litigation (1st Cir.), Acoustic Technology, Inc. v. Itron Networked Solutions, ...

The Investors’ Control of Their Investment Advisers. Who Has the Final Word?

TAMAR FRANKEL

BU Law emerita professor Tamar Frankel discusses an emerging issue affecting financial advisers—when a client may exercise control over the actions of the adviser. Frankel relates the story of an investment adviser that did not follow the client’s orders to cease certain investments, at a cost of almost $5 million to the client. As Frankel explains, the Securities and Exchange Commission (SEC) got involved, resulting in the investment adviser’s settlement for a significant payment to the client and other conditions.

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In re Lantus Direct Purchaser Antitrust Litigation

Court: US Court of Appeals for the First Circuit

Docket: 18-2086

Opinion Date: February 13, 2020

Judge: William Joseph Kayatta, Jr.

Areas of Law: Intellectual Property, Patents

The First Circuit held that Sanofi-Aventis U.S., LLC improperly submitted a patent for listing in "the Orange Book" and that Sanofi was potentially liable under the antitrust laws to drug purchasers who were allegedly harmed by the effective extension of Sanofi's monopoly. At the center of this appeal was a publication maintained by the FDA called Approved Drug Products with Therapeutic Equivalence Evaluations, known as "the Orange Book," which lists patents said by their owners to claim FDA-approved drugs. When a patent is listed in the Orange Book the patent-owning drug manufacturer has the ability to trigger an automatic, thirty-month suspension of the FDA's approval of a competing product. Plaintiffs alleged that Sanofi artificially restricted competition in the market for insulin glargine by improperly listing a certain patent in the Orange Book, thereby delaying competition in the insulin glargine market and resulting in inflated prices. The district court dismissed Plaintiffs' Sherman Act claims. The First Circuit vacated the dismissal as to Sanofi's alleged improper Orange Book listing of the patent, holding that Sanofi improperly submitted the patent for listing in the Orange Book and that Sanofi potentially liable under the antitrust laws to drug purchasers who were allegedly harmed by the effective extension of Sanofi's monopoly.

Acoustic Technology, Inc. v. Itron Networked Solutions, Inc.

Court: US Court of Appeals for the Federal Circuit

Dockets: 19-1061, 2019-1059, 2019-1060

Opinion Date: February 13, 2020

Judge: Jimmie V. Reyna

Areas of Law: Intellectual Property, Patents

Acoustic’s 841 patent relates to communications systems for utility providers to remotely monitor groups of utility meters, e.g., electricity meters. According to Acoustic, the claimed invention was “an improvement upon prior art automated meter reading systems that used expensive and problematic radio frequency (RF) transmitters, or systems that relied on human meter-readers using hand-held or vehicle-mounted short-range wireless devices to obtain meter readings when they were in a customer’s vicinity.” On Network’s petition, the Patent Trial and Appeal Board instituted inter partes review (IPR). Nine days after institution, Network agreed to merge with Itron, an entity undisputedly time-barred under 35 U.S.C. 315(b). Network and Itron completed the merger during the IPR proceeding. The Board later issued a final written decision and found the challenged claim unpatentable. The Federal Circuit affirmed, rejecting Acoustic’s claim that the inter partes review was time-barred due to Network’s and Itron’s merger-related activities. Acoustic waived its time-bar argument because it failed to present that argument before the Board. Substantial evidence supports the Board’s unpatentability findings based on anticipation.

Apple Inc. v. Andrea Electronics Corp.

Court: US Court of Appeals for the Federal Circuit

Docket: 18-2382

Opinion Date: February 7, 2020

Judge: S[heldon] Jay Plager

Areas of Law: Intellectual Property, Patents

Andrea sued Apple for infringement of Andrea’s 345 patent, relating to certain aspects of digital audio processing. Apple filed two inter partes review (IPR) petitions. The Patent Trial and Appeal Board instituted review. In its 626 IPR Final Written Decision, the Board concluded that, in light of prior art, several challenged claims were unpatentable. The Board declined to consider certain arguments in Apple’s reply brief because Apple was raising new arguments in its reply brief. In its 627 Decision, the Board concluded that, in light of other cited art, several challenged claims are unpatentable. The Board construed the term “periodically” in favor of Andrea. Between the two IPRs, the Board held that all challenged claims except claims 6–9 are unpatentable. The Federal Circuit vacated with respect to the 626 IPR; the Board erred in refusing to consider Apple’s reply arguments. Apple’s reply does not cite any new evidence or “unidentified portions” of the reference at issue but merely demonstrates another example of the same algorithm to further explain why the reference discloses the “current minimum” and “future minimum” limitations of claims 6–9. Apple’s reply arguments are responsive to arguments raised in Andrea’s Patent Owner Response. The petitioner in an IPR may introduce new evidence after the petition stage if the evidence is a legitimate reply to evidence introduced by the patent owner. The court affirmed with respect to the 627 IPR, finding the decision supported by substantial evidence.

In Re: Google LLC

Court: US Court of Appeals for the Federal Circuit

Docket: 19-126

Opinion Date: February 13, 2020

Judge: Timothy B. Dyk

Areas of Law: Civil Procedure, Patents

SIT sued Google for patent infringement in the Eastern District of Texas. Under 28 U.S.C. 1400(b), “[a]ny civil action for patent infringement may be brought in the judicial district where the defendant resides, or where the defendant has committed acts of infringement and has a regular and established place of business.” Under Supreme Court precedent, “a domestic corporation 'resides’ only in its state of incorporation for purposes of the patent venue statute; the Federal Circuit has held that a “regular and established place of business” must be: “a physical place in the district”; “regular and established”; and “the place of the defendant.” Google provides video and advertising services to residents of the Eastern District of Texas through the Internet. Google Global Cache (GGC) servers function as local caches for Google’s data. Google contracts with internet service providers within the district to host Google’s GGC servers. The GGC servers cache only a small portion of content that is popular with nearby users but can serve that content with shorter wait times than Google’s central server infrastructure due to their physical proximity to the ISP’s users. No Google employee installed, performed maintenance on, or physically accessed any of the GGC servers. The district court denied Google’s motion to dismiss. The Federal Circuit ordered that the case be dismissed or transferred. A “regular and established place of business” requires the regular, physical presence of an employee or other agent of the defendant conducting the defendant’s business at the alleged “place of business.”

Serta Simmons Bedding, LLC v. Casper Sleep Inc.

Court: US Court of Appeals for the Federal Circuit

Docket: 19-1098

Opinion Date: February 13, 2020

Judge: Timothy B. Dyk

Areas of Law: Civil Procedure, Intellectual Property, Patents

Serta filed a patent infringement action against Casper, citing the 173, 763, and 935 patents. Those patents cover mattresses that include a channel and methods for forming it. These mattresses can have varying areas of firmness by inserting reinforcement of various types into their channels that can be located at regions where additional support is desired. Casper filed three motions for summary judgment directed to non-infringement of Casper’s accused mattresses, accused methods of manufacturing, and redesigned mattresses. While Casper’s summary judgment motions were pending, the parties executed a settlement agreement and advised the district court of the settlement. The district court nevertheless granted Casper’s summary judgment motions of non-infringement. It later denied Serta’s motions to vacate the summary judgment order and to enforce the settlement agreement. The Federal Circuit vacated and remanded with instructions to enforce the settlement agreement. There is no contention that the settlement or the relief sought by Serta is unlawful or contrary to public policy. There is also no dispute that the parties executed the agreement before the district court issued the summary judgment order; Casper has admitted that the agreement was binding. The settlement agreement mooted the case even though it included terms that required future performance.