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SCOTUS Cases Shaping the IP Landscape in 2023

2023 promises to be a crucial year for IP observers awaiting resolutions in a handful of legal cases set to impact the IP industry. Induced infringement, divided infringement, and the patentability of abstract claims are all at issue on this year’s SCOTUS docket. The high court has received scrutiny from IP stakeholders in recent years for its opaque and contradictory rulings they allege have made it hard for innovators to compete.

Teva Pharmaceuticals USA, Inc. v. GlaxoSmithKline, LLC

Docket No. 22-37

Like 2022, 2023 will feature several cases involving U.S. drugmakers. On the Supreme Court’s docket is the Teva Pharmaceuticals USA vs. GSK case and the application of so-called “skinny labels.” Skinny labeling is used to thwart attempts by drug makers to delay competition by replacing expiring patents with new ones based on new uses for the drug. Generic competitors use skinny labels to cover uses of a drug no longer protected by a patent.

This practice of receiving subsequent patents with the goal of maintaining monopoly power has reduced competition in pharmaceutical markets. Generic drug alternatives are locked out by patent holders earning new patents under the guise of treating different conditions with the same drug. Modified FDA rules created a pathway to the skinny label system used to enhance drug industry competition. Skinny labeling has been in practice since the turn of the millennium when Congress passed a law that included provisions for the FDA to allow skinny labels.

The case has been active since 2014 and at the center is a $235 million liability verdict issued by the lower circuit court. It found that Teva violated existing GSK patents for its drug, Coreg, even though the original patent on the drug expired in 2007.

Teva’s stated use of the generic Coreg (treating heart failure–the drug’s original use) is not in question. Teva has been found in violation of induced infringement, a type of secondary infringement in which an initiating party “induces” another to commit patent infringement. Those who were directly marketing and selling Teva’s product included uses currently covered by in-force patents.

Apple, Inc. v. California Institute of Technology

Docket No. 22-203

The Patent Trial and Appeal Board was created in 2012 as an alternative system of inter partes reviews, post-grant reviews, and business method reviews. While its record of success is mixed, the PTAB was the product of congressional legislation administered by the department of commerce and the USTPO designed to expedite intellectual property cases. The PTAB is alleged to have effectively created a dual legal system for intellectual property. To deal with this, the court’s estoppel provision prevents raising any invalidity argument it could have reasonably asked the PTAB to rule on in another court.

At the heart of the case is whether or not Apple repeated its invalidity claim, first in the IRB and again in district court. Apple says their arguments only appeared in the petition stage of the IRB process, prior to the actual review. CIT asserts that according to the estoppel rule, Apple already had its chance and could have easily made the current circuit court invalidity claim in front of the PTAB. The PTAB’s formal review did not include all of the pre-trial claims and therefore was never formally reviewed or ruled on, potentially making Apple’s invalidity argument permissible in the parallel district court case. Companies will be hesitant to use PTAB, if it means having to defend patents in more than one court.

Tropp v. Travel Sentry

Docket No. 22-22

As this case gears up for its potential third appearance in front of the Supreme Court, the questions Tropp v. Travel Sentry raises are all but settled by IP industry observers who hope it’s a chance for the court to exhibit some consistency on IP matters. Tropp v. Travel Sentry also highlights other recent rulings that have upended the IP landscape. At issue is the definition of divided infringement per Akamai Techs., Inc. v. Limelight Networks, Inc. and the patentability of abstract methods per Alice Corp. v. CLS Bank International.

The technology at the heart of the dispute is a dual-lock system designed to protect airport luggage and prevent it from being accessed by anyone but the TSA during security screenings. Patent holder David Tropp holds two patents that describe both the mechanical orientation of the locks and the abstract steps airport security would undergo to execute their security goals. Travel Sentry is alleged to have infringed with the help of the TSA on the grounds that both parties have jointly committed infringement by using the patented system of locks as well as the abstract methodology behind the security screening.