Court Affirms Board's Decision Of Unpatentability Despite Previous Affirmance Of Earlier Declaration Of Validity By District Court

Last Month at the Federal Circuit - June 2012

Judges: Newman (dissenting), Lourie (author), Moore [Appealed from Board]

In In re Baxter International, Inc., No. 11-1073 (Fed. Cir. May 17, 2012), the Federal Circuit affirmed the Board's decision that claims of U.S. Patent No. 5,247,434 ("the '434 patent") are invalid as obvious, despite the claims having been held valid in an earlier appeal from a district court.

The '434 patent is entitled "Method and Apparatus for Kidney Dialysis," and is owned by Baxter International, Inc. ("Baxter"). The '434 patent is directed to hemodialysis machines with touch screen user interfaces, and, according to the specification, permits dialysis machine operators to control the parameters of dialysis and deliver specified dialysate solutions.

In 2003, the '434 patent was subject to litigation when Fresenius Medical Care Holdings, Inc. ("Fresenius") sued Baxter for a declaration of patent invalidity. After a jury found the '434 patent claims invalid as obvious, the district judge granted Baxter's JMOL motion, finding that Fresenius failed to meet the clear and convincing evidentiary standard. Fresenius Med. Care Holdings, Inc. v. Baxter Int'l, Inc., No. C 03-1431 SBA, 2007 WL 518804, at *1 (N.D. Cal. Feb. 13, 2007). Fresenius appealed the district court's JMOL ruling to the Federal Circuit, but the Federal Circuit affirmed, explaining that "Fresenius failed to present any evidence—let alone substantial evidence—that the [disputed limitations], or an equivalent thereof, existed in the prior art." Slip op. at 5 (quoting Fresenius USA, Inc. v. Baxter Int'l, Inc., 582 F.3d 1288, 1299 (Fed. Cir. 2009)).

In 2006, in parallel with the Fresenius litigation, the PTO reexamined the '434 patent upon request by Fresenius and rejected the claims as obvious. Baxter appealed the rejection to the Board. Before the Board issued a decision, the Federal Circuit affirmed Baxter's JMOL motion and upheld the claims.

Upon petition by Baxter, the Director ordered the Board to consider the Federal Circuit's Fresenius decision when reviewing the examiner's rejections. The Board, however, affirmed the examiner's rejections of the '434 patent claims despite the contrary result by the Federal Circuit in affirming the district court's decision. The Board explained that "a lower standard of proof and the broadest reasonable interpretation standard of claim construction apply at the PTO," as compared to a district court, "and therefore the...