News

Here is a report on recent news and commentary related to the Federal Circuit and its cases. Today‚Äôs report includes a New York Times article highlighting the Federal Circuit’s holding last Thursday that the appointment of the Patent Trial and Appeal Board’s judges is unconstitutional, a comment by the Brookings Institution on the Moda Health Plan, Inc. v. United States case pending before the Supreme Court, and a report by Bloomberg News on the Federal Circuit’s affirming of a trial court decision tossing a $2.5 billion verdict against Gilead Sciences Inc. in a patent case.

Jonathan Stempel reported for the New York Times on the Federal Circuit’s decision in Arthrex, Inc. v. Smith & Nephew, Inc. “declar[ing] unconstitutional the structure of the federal tribunal that reviews the validity of patents.” According to Stempel, “[s]ome conservatives supported the patent board’s creation in 2011 to rein in trial lawyers, as well as patent ‘trolls’ that acquire patents for the purpose of seeking licensing fees.” “But,” noted Stempel, “in recent years they have become critical of board decisions favoring larger companies over smaller rivals.” (We previously reported on news related to the oral arguments in the Arthex case, Thursday’s decision, and Friday’s orders in other cases impacted by the Arthex decision.)

At the Brookings Institution, Christen Linke Young commented on Moda Health Plan, Inc. v. United States, which is set to be argued at the Supreme Court later this year. As explained by Young, Moda Health Plan is “a case about the Affordable Care Act’s risk corridors program” in which “[d]ozens of insurance companies are arguing that they are owed $12 billion in risk corridor payments associated with their participation in the early years of Obamacare.” In a 2-1 decision, “the Federal Circuit agreed with the federal government and ruled . . . against the insurance companies,” noting that “while so-called ‘repeals by implication’ are generally disfavored, there are a number of Supreme Court and Court of Appeals rulings holding that appropriations bills had repealed the underlying statutory obligation in somewhat similar cases.” (We have previously reported on activity in the Moda Health Plan case.)

Susan Decker of Bloomberg News highlighted the Federal Circuit’s recent decision in Idenix Pharmaceuticals LLC v. Gilead Sciences Inc., in which the court, “in a 2-1 decision, affirmed a trial court decision that tossed [a] 2016 jury verdict” awarding Idenix $2.5 billion in damages. Decker notes that the court ruled that Idenix’s “patent on a hepatitis C treatment is invalid” because the patent’s claims cover “‘at least many, many thousands’ of potential compounds and ‘each of these compounds would need to be screened in order to know whether or not they are effective’ against the hepatitis C virus.” The Federal Circuit concluded that, as a result, the claims violate the written description and enablement requirements.