Top Appellate Reversals: Fresenius USA Inc. v. Baxter International Inc.

Fish & Richardson PC convinced the nation's patent appeals court in July to overturn a $23.5 million judgment against its client, German medical device manufacturer Fresenius Medical Care AG & Co., in a decision with broad ramifications for federal judges and patent lawyers.

A split panel of the U.S. Court of Appeals for the Federal Circuit determined that the infringement claims Baxter International Inc. pursued against Fresenius were cancelled once the U.S. Patent and Trademark Office deemed Baxter's asserted patent invalid. Fresenius USA Inc. v. Baxter International Inc., 721 F.3d 1330 (Fed. Cir. 2013).

The Federal Circuit reasoned that the patent office's reexamination result must eliminate the lawsuit because Baxter had not obtained a final, unappealable decision. The appellate court denied a rehearing. But the decade-long dispute that originated in the Northern District of California may have another twist. Baxter has until March 5 to petition the U.S. Supreme Court to review the Federal Circuit's decision.

In the meantime, district judges are considering whether to stay patent infringement lawsuits to allow invalidity challenges at the patent office to conclude first, in light of the Federal Circuit's Fresenius ruling.

The office has added new patent review procedures, following passage of the America Invents Act, which provide alleged infringers with more options to invalidate asserted patents.

Juanita R. Brooks, Fresenius's lead counsel and a San Diego-based Fish & Richardson PC partner, said timing is crucial for litigants who are seeking stays in district court proceedings.

"If you're far along in litigation, I think the majority of district court judges would say no, you're trying to game the system," Brooks said. "But if you are early in the litigation, then a district court judge might think it's prudent to stay the case."

- KEVIN LEE

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