In Astellas Pharma v. Sandoz et al the Federal Circuit vacated the judgment of the Delaware district court finding claims of U.S. Patent No. 10,842,780 invalid under 35 U.S.C. §101 as directed to an ineligible natural law.
This was an interesting case. Not only had the defendants not made a 101 challenge, they had stipulated at trial to only challenge the claims' validity under section 112. But the district court found that by arguing for enablement based on a routine methods obeying a natural law, Astellas had conceded that the claims were not patent eligible. Unsurprisingly, the Federal Circuit vacated, holding the district court to the party presentation rule - that district courts are to decide the issues presented to them.
The panel rejected the idea that patent eligibility was a threshold issue and stated that "the presumption of validity afforded to patents under § 282 applies equally to all grounds of validity, including the eligibility of the claimed subject-matter." While this was not a new holding, as the Court cited the 2019 decision in Cellspin v. Fitbit reaching the same conclusion, it is interesting to note that many courts had previously ruled the presumption did not apply to eligibility (e.g., Kindred Studio Illustration & Design, LLC v. Elec. Commc'n Tech., LLC, No. 2:18-CV-07661 (GJS), 2019 WL 3064112, at *9 (C.D. Cal. May 23, 2019) ("The presumption of validity, however, does not equate to a presumption of patent eligibility.")- and Judge Mayer in a concurrence argued that it should not. See Ultramercial, Inc. v. Hulu, LLC, 772 F.3d 709, 720 (Fed. Cir. 2014) ("Because the PTO has for many years applied an insufficiently rigorous subject matter eligibility standard, no presumption of eligibility should attach when assessing whether claims meet the demands of section 101....Although the Supreme Court has taken up several section 101 cases in recent years, it has never mentioned—much less applied—any presumption of eligibility."). It will be interesting to see if anyone tries to get the Federal Circuit to weigh in en banc on this issue.
The panel also rejected Sandoz's argument that the "stunning admissions at trial regarding the invention" justified the district court sua sponte eligibility analysis, finding Sandoz's cited cases pre-dated the codification of the presumption of validity in the 1952 patent act and its corresponding requirement that a patent challenger affirmatively plead its defenses. Interestingly, the court refused to consider Sandoz' position at oral argument that a section 101 defense had been plead, finding it was forefeited for not being briefed. While in my opinion this would have been unlikely to change the outcome given the pre-trial stipulation, it is interesting the court did not reject the argument on its merits as well. Nor did the panel leave open the opportunity of defendants adding a 101 defense on remand, stating unequivocally the issues on remand "are limited to infringement and validity under 35 U.S.C. § 112."
The case provides a key lesson, especially to those representing defendants, preserve your defenses and embrace in-the-alternative arguments. See Nuvo Pharms. (Ireland) Designated Activity Co. v. Dr. Reddy’s Lab’ys Inc., 923 F.3d 1368 (Fed. Cir. 2019) (finding claims invalid under 112 in part based on patentee's non-obviousness arguments).
A final interesting note was the district court's readily apparent frustration with ANDA litigants - stating that industry has "perverted the intent of the Hatch-Waxman amendments" and parties "have colluded to protect weak or invalid patents and share in the startling profits." While the panel agreed such statements had no relevance, and it understood Astellas' concerns, the panel declined to send the case to a different judge on remand, though it did caution the district curt that "these proceedings are not an appropriate venue for those frustrations to be aired, let alone acted upon."
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