U.S. ex rel Silbersher v. Allergan, Inc., 21-15420, — F.4th — (9th Cir. Aug. 25, 2022) [21-15420]
Zachary Silbersher is a NY Patent Attorney. In 2018, Silbersher filed a qui tam action against Allergan under the False Claims Act (FCA). The allegation was that Allergan fraudulently obtained patents covering Alzheimer’s drug treatments with the result of inflated Medicare drug prices. The district court denied a motion to dismiss but certified the issue for interlocutory appeal. Silbersher v. Allergan Inc., 506 F. Supp. 3d 772, 809 (N.D. Cal. 2020). The Ninth Circuit has now decided the case in Allergan’s favor–holding that the action fails under the FCA’s “public disclosure bar.”
The FCA has been a part of U.S. government since 1863 (the “Lincoln Law”) and is designed as a mechanism for catching (and thus deterring) fraud against the Federal Government. The law incentivizes whistleblowing — non-governmental folks (known as “qui tam relators”) can file the action on behalf of the U.S. government and will then receive a portion of any recovered damages (15-30% depending upon whether the Gov’t steps in to do the litigating).
In its current embodiment, the FCA contains a “public disclosure bar” that prohibits qui tam actions when the allegations are ‘based upon’ information that had already been publicly disclosed. The statute particularly defines public disclosure as being publicly disclosed in at least one of three ways:
(i) in a Federal criminal, civil, or administrative hearing in which the Government or its agent is a party;
(ii) in a congressional, Government Accountability Office, or other Federal report, hearing, audit, or investigation; or
(iii) from the news media,
31 U.S.C. § 3730(e)(4)(A) (2010). Here, the basis of Silbersher claim stem from the prosecution history files of the Allergan patent applications. On appeal, the Federal Circuit concluded that the patent prosecution files stemmed from an administrative hearing and thus qualifies as an “other Federal … hearing.” Part ii above is a bit quirky as written, but the Ninth Circuit concluded that the best interpretation is that four type-ii disclosures are: “report, hearing, audit, or investigation.” Further, those disclosures qualify under ii if they are “congressional, Government Accountability Office, or other Federal.” Id.
An ex parte patent prosecution is clearly “Federal”: the PTO is an agency of the U.S. Department of Commerce. To determine the meaning of “other,” we look to look to dictionaries. . . . “Other” means distinct from that just mentioned, different, or additional. “[O]ther Federal” here clearly means Federal reports, hearings, audits, or investigations not from Congress or the Government Accountability Office, a definition that of course includes ex parte administrative hearings before the PTO. Congress, then, intended for “other” to be a broader category that includes additional, information-obtaining methods distinct from those already mentioned.
U.S. v. Allergan, Inc. The result of this interpretation is that “other Federal” is controlling and the provision could have simply been written as “in a Federal report, hearing, audit, or investigation.” The appellate panel justifies its broad interpretation by the Supreme Court’s 2011 pronouncement that the public disclosure bar has a “generally broad scope.” Schindler Elevator Corp. v. U.S. ex rel. Kirk, 563 U.S. 401 (2011) (interpreting a prior version of the Act).
The result then is that Silbersher’s qui tam case is likely blocked. The law does have a separate provision though would allow the case to move forward if he is an “original source” of the information in his complaint rather than simply finding it within the patent prosecution record. On remand, the district court will need to determine that origin question.
Allergan is looking to win on a ‘technicality,’ but to be clear, the company also argues that it did not make any false claims and so would also ultimately win on the merits.
The Reverse Doctrine of Equivalents can shrink the scope of a patent to exclude acts literally covered by the claims. The Supreme Court in Graver Tank explained that the doctrine comes up to prevent abuse of the patent system:
[W]here a device is so far changed in principle from a patented article that it performs the same or a similar function in a substantially different way, but nevertheless falls within the literal words of the claim, the doctrine of equivalents may be used to restrict the claim and defeat the patentee’s action for infringement.
Graver Tank & Mfg. Co., Inc. v. Linde Air Prods. Co., Inc., 339 U.S. 605 (1950). The Graver Tank decision traced its provenance back to Westinghouse v. Boyden Power Brake Co., 170 U.S. 537 (1898) (“correspond[ence] with the letter of the [claim] does not settle conclusively the question of infringement.”). Both Westinghouse and Graver Tank describe this scope-shrinking as an aspect of the doctrine of equivalents that can either increase or decrease literal scope. The term “reverse doctrine of equivalents” was seemingly first used by Judge Markey in a 1977 decision rejecting application of any reverse doctrine of equivalents in the validity context. Ex parte Hogan, 559 F.2d 595, 607 (Cust. & Pat. App. 1977). Hogan places the term within quotation marks–“reverse doctrine of equivalents”–but did not indicate whether those quotes were for emphasis or citing some prior usage. The usage was later solidified by the Federal Circuit in SRI International v. Matsushita Electrical Corp. of America, 775 F.2d 1107 (Fed. Cir. 1985). In Roche Palo Alto LLC v. Apotex, Inc., 531 F.3d 1372 (Fed. Cir. 2008), the court endeavored to cabin-in the doctrine’s use by explaining that (1) “The reverse doctrine of equivalents is rarely applied”; and (2) the Federal Circuit “has never affirmed a finding of non-infringement under the reverse doctrine of equivalents.” Id.
The Reverse DOE has not seen much action of late. In Steuben Foods, Inc. v. Shibuya Hoppmann Corp., CV 19-2181-CFC-CJB, 2021 WL 4775996, at *1 (D. Del. Oct. 13, 2021), the court denied summary judgment. The defendant apparently admitted that its product was covered by the literal scope of the patent, but argued no infringement based upon the reverse doctrine of equivalents. In particular, the defense argued that its sterile region was substantially different than that disclosed by the invention. The jury was asked whether the accused machine “is no more than insubstantially different from the second sterile region of the invention.” The jury marked the box labelled YES-INFRINGED.
Unlikely that the defendant will choose this issue to appeal given the history of the Federal Circuit and reverse DOE, but we’ll see. In another recent Delaware decision, the court noted that Teva had initially raised the reverse doctrine of equivalents, but later dropped that defense. Vifor Fresenius Med. Care Renal Pharma Ltd. v. Teva Pharm. USA, Inc., CV 18-390 (MN), 2022 WL 3562555, at *6 (D. Del. Aug. 18, 2022). In, Kewazinga Corp. v. Microsoft Corp., 558 F. Supp. 3d 90, 112 (S.D.N.Y. 2021), the patentee sought summary judgment rejection of Microsoft’s reverse DOE defense. The district court refused, holding that any decision regarding reverse DOE must follow a finding regarding literal infringement. Id.
In many ways, the Reverse Doctrine of Equivalents has the potential of doing some of the same work as our doctrines of full-scope enablement & written description. A key difference though is that the outcome is a narrowed patent claim rather than an invalid patent claim.