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July 29, 2003

FEDERAL CIRCUIT DECISIONS FOR WEEK ENDING December 13, 2013
Galderma Laboratories, L.P., v. Tolmar, Inc., (December 11, 2013) (precedential) Patent
Nos. 7,579,377; 7,737,181; 7,834,060; 7,838.558; and 7,868,044.
Key point(s):
• Claims to a compound known to have a property at a specific concentration can be shown to be obvious by introducing prior art that teaches the useful property over a range which includes the specific concentration. The burden then shifts to the patentee to show that secondary considerations merit patentability for the specific concentration. Facts/Background: Galderma sued Tolmar alleging that Tolmar’s ANDA application to market
adapalene infringed claims of the '377 patent (and the other patents). Each asserted claim
required a cream that included 0.3% by weight of adapalene. Galderma introduced prior art
(Shroot ‘720), which specifically disclosed the use of adapalene as the active ingredient in
concentrations within a range of 0.1%, and 1%. Based on this, Tolmar argued that claims
directed to the use of adapalene at a concentration 0.3% were obvious. After a bench trial, the
district court held the patent not invalid and infringed. The district court found that the prior art
“taught away” from the claimed composition, that the comparable tolerability (related to dose-
dependent side effects) was unexpected in view of the prior art and commercial success.
Holding: The only issue on appeal was whether the asserted claims were not invalid as obvious.
The Federal Circuit began by properly framing the obviousness inquiry, which was “whether
there was motivation to select the claimed 0.3% adapalene composition in the disclosed range."
Where a claim recites a value within a disclosed range, "the burden of production falls upon the
patentee to come forward with evidence that (1) the prior art taught away from the claimed
invention; (2) there were new and unexpected results relative to the prior art; or (3) there are
other pertinent secondary considerations." It was undisputed that the prior art patent disclosed all
of the limitations of the asserted claims, except for a precise teaching of 0.3% adapalene. The
appellate court then rejected the evidence of secondary considerations on which the district court
had relied. First, it rejected the district court’s finding that the prior art “taught away.” A
“reference does not teach away … if it …does not criticize, discredit, or otherwise discourage
investigation into other compositions. Here, the teaching, at best, provided a general
preference.” The appellate court rejected the district court’s finding of “unexpected results.” The
Federal Circuit agreed that comparable tolerability (i.e., no increase in side effects despite
increased concentration) was unexpected, but found it was not “an unexpected result that is
probative of non-obviousness.” Unexpected results that matter for the obviousness inquiry are
ones that “are different in kind and not merely in degree from the results of the prior art.” Here,
an expected increase in side effects that did not occur with the increase in adapalene
concentration was merely an unexpected difference in degree, not a difference in kind. The
Federal Circuit also disagreed with the district court’s finding “that [the] commercial success of
the adapalene product supported a finding on non-obviousness.” The evidence on which the
district court had relied simply did not support a conclusion of commercial success.
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CBT Flint Partners, LLC, v. Return Path, Inc., (December 11, 2013) (precedential) Patent
Nos. 6,192,114, 6,587,550
Key point(s):

• Only certain costs associated with e-discovery may be taxed as costs under 28 U.S.C. § 1920(4), provided the costs are an electronic equivalent of “making copies.” Facts/Background: After the district court construed the patent claims at issue, CBT stipulated
to non-infringement of the asserted claims of the ’114 patent. The district court then granted
summary judgment of indefiniteness of the one asserted claim of the ’550 patent. A prevailing
party then moved to recover its costs under 28 U.S.C. § 1920, including $243,453.02 in fees it
had paid to a company that handled electronic discovery for it. Rather than fit that amount into a
specific § 1920 category, the prevailing party’s bill of costs labeled those fees “other costs.” In
one prior ruling, the Federal Circuit reversed the finding of indefiniteness, and vacated the order
granting Cisco’s request to recover costs. On remand, the district court granted summary
judgment of non-infringement, which the Federal Circuit summarily affirmed in another prior
ruling. Cisco again submitted its bill of costs to the trial court. The district court denied CBT’s
motion to review, deeming the motion “in effect a motion for reconsideration of the previous
[2009] Order affirming the taxation of Defendants’ e-discovery costs.” CBT appealed this
decision.
Holding: A prevailing party may recover costs of e-discovery under 28 U.S.C. § 1920(4) related
to “making copies.” 28 U.S.C. § 1920 was amended in 2008 from “[f]ees for exemplification
and copies of papers necessarily obtained for use in the case” to “[f]ees for exemplification and
the cost of making copies of any materials where the copies are necessarily obtained for use in
the case.” The Federal Circuit first held that 1920(4) applied only to costs incurred in documents
produced to a requestor, not those a party creates for its own purposes. This includes costs to
make duplicates in a particular format or to preserve characteristics such as metadata. “But only
the costs of creating the produced duplicates are included, not a number of preparatory or
ancillary costs commonly incurred leading up to, in conjunction with or after duplication.” To
determine whether an expense is a recoverable cost as “making copies,” the Court evaluated 3
“stages” of electronic discovery. At stage 1, an electronic discovery vendor copies or images
computer hard drives – creating a forensic copy of digital information. Costs incurred at this
stage are recoverable “where they are, in fact, necessary to make copies of information required
to be produced and not incurred to make copies for the convenience of the producing party.” At
stage 2, documents are organized into a database. During stage 2, a party may extract
proprietary data, and perform de-duplication efforts. The cost of these activities was more like
the costs of preparing to make actual copies. However, some costs, e.g., creating load files, are
covered when they are part of the material to be produced to a requesting party. At stage 3,
documents selected for production are copied to memory media. The parties agreed that stage 3
costs were generally recoverable under 1920(4). Lastly, the appellate court noted that § 1920
created default rules, which could be changed by cost allocation agreements made by the parties.
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Source: http://www.pattersonsheridan.com/content/uploads/2013/12/FedCirSum121313.pdf

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