En Banc Decision Clarifies Scope of Product-By-Process Claims and Highlights Philosophical Divide in the Federal Circuit

En banc decisions from the Federal Circuit are rare. They serve to clarify the law, typically being invoked when conflicting precedent has been identified and needs to be reconciled. As such, en banc decisions are important. On May 18, 2009, the Federal Circuit issued its decision in Abbott Laboratories et al. v. Sandoz et al., 2007-1400, 1446 (http://www.cafc.uscourts.gov/opinions/07-1400.pdf). Most of the decision was panel-only. However, the Court, acting sua sponte, took on one issue en banc. That issue was the “proper interpretation of product-by-process claims.”

The Majority Holding

First, the law. The majority noted conflicting precedent from Federal Circuit panel decision regarding whether the process recitations in a product-by-process claims were properly construed as claim limitations. In other words, would an identical product, made by a different process, infringe a product-by-process claim? Making a long story short, the majority held that process recitations in a product-by-process claim are indeed claim limitations and if a product is made by a different process, there is no infringement.

Judge Newman’s Dissent

Judge Newman’s dissenting opinion, joined by J. Laurie and J. Mayer, is a 38 page dissertation taking issue with both the process used by the Federal Circuit in dealing with this issue en banc, and the substance of the majority’s holding.

Judge Newman is perhaps the Federal Circuit’s most consistent supporter of a strong patent system. Her opinions demonstrate a high level of respect both for patents and the patent bar. This dissent is fully consistent with these values.

First, the dissent is clearly unhappy with the perceived short-cutting of the en banc process in this case. For example, Judge Newman notes that the parties were not invited to brief or argue the en banc question and neither were amici. The dissenting opinion states that the Federal Circuit ran afoul of Fed. R. App. Proc. 34 and 35, as well as its own internal operating procedures, in taking on this issue without seeking such input. In Judge Newman’s view, those constituents likely to be effected by this change in the law should have been provided an opportunity to be heard.

Turning to the substance of the dissent, Judge Newman methodically dissects each case relied on by the majority and effectively points out why those cases fail to support the bright line test adopted by the majority. Rather, long standing authority, she points out, supports evaluating a product-by-process claim under a “rule of necessity” that traditionally allowed a patentee to claim the product by describing the process of manufacture when there was no known way of characterizing an otherwise novel product. Since both patentability and infringement were measured by the scope of the product, Judge Newman characterizes this approach as “pragmatic, fair, and just, for it attuned patent law and practice to the realities of invention.”

Practical Impact

From a practical standpoint, this decision will have limited impact since the use of product-by-process claims tend to be rare. (Indeed, its not even clear that they were appropriate in the case before the court since there were other claims involved that claimed the product based on measurable properties, rather than the process steps used to make the product). Nonetheless, the majority holding seems to present yet another small, but measurable, erosion of patent rights that are now available to inventors.