Federal Circuit Finally Dispels Uncertainty Over the Scope of Product-By-Process Claims

By Edward Dailey.

May 2009 IP Update

The general rule of drafting claims has been that a product should be defined by its components. Still, the Patent and Trademark Office has long allowed a product to be claimed “by the process of producing it,” when the inventor lacks other knowledge to “define and discriminate” the invention. Ex Parte Painter (Comm’r Pat. 1891)”

This “product-by-process” rule has particular application to complex biological and chemical products where the structure of a product is not completely understood but can be described by the process from which it is made. And “in spite of the fact that a product-by-process claim may recite only process limitations, it is the product which is covered by the claim and not the recited process steps.” In Re Hughes(CCPA 1974).

Of course, it is one thing to permit claims to be drafted in product-by-process terms. It is an entirely different matter to determine the scope and reach of such claims for infringement purposes. This month, in Abbott Laboratories v. Sandoz, Inc., the Federal Circuit settled conflicting views of the scope of product-by-process claims, with decisive implications for the litigation of such claims.

Clearly, product-by-process claims enjoy open-ended scope if the product of the process is protected without regard for process limitations. In that event, a similar or equivalent product can be challenged as infringing even if it is produced through a materially different process. Since Hughes, however, there have been garbled and inconsistent decisions on the scope of product-by-process claims.

The PTO and some panels of the Federal Circuit have followed Hughes while others have pressed for a much more limited scope. The most significant decisions have been Scripps Clinic & Research Foundation v Genentech, Inc. (Fed. Cir. 1991) andAtlantic Thermoplastics Co. v Faytex Corp. (Fed. Cir. 1992).

In Scripps, the Federal Circuit, in an opinion by Judge Newman, reversed a trial court ruling that barred Scripps from pursuing a product-by-process infringement claim against Genentech which used a different process to produce the blood protein produced under Scripps’s patented process.”[T]he correct reading of product-by-process claims is that they are not limited to product prepared by the process set forth in the claims.”

Just a year later, in Atlantic Thermoplastics, the court, in an opinion by Judge Rader, cited but sidestepped Scripps. Instead, the court relied on the fundamental rule of infringement that requires the presence of every claim limitation or its equivalent. “An accused infringer can avoid infringement by showing that the accused device lacks even a single claim limitation.”

From this principle, the court declared that the process limitations in a product-by-process claim cannot be ignored in infringement analysis. Accordingly, Faytex innersoles manufactured under a different process did not infringe the product-by-process claim in Atlantic’s molded-innersole patent.

The Scripps and Atlantic Thermoplastics rulings cannot be squared and have been the source of repeated disputes over the last 17 years. At long last, the court’s en banc decision in Abbott Laboratories has resolved the issue. Reprising his opinion inAtlantic Thermoplastics, Judge Rader cites extensive support in Supreme Court decisions for a rule construing product-by-process claims as limited by the recited process. The rule in Atlantic Thermoplastics is expressly adopted by the court.

At issue in Abbott Laboratories was Abbott’s licensed patent for a semi-synthetic “crystalline” compound of cephalosporin which is used as a broad spectrum antibiotic. Sandoz and other generic drug manufacturers developed cephalosporin compounds to compete with Abbott. The competing compounds are produced by different processes from that set out in the four process claims in the Abbott patent.

In upholding trial court decisions rebuffing Abbott, the Federal Circuit declares that “process terms in product-by-process claims serve as limitations in determining infringement.” Rejecting Judge Newman’s spirited dissent (and defense of her 1991 opinion in Scripps), Judge Rader argues that the dissent, in bemoaning the abrogation of Scripps, is lamenting a “right” that never existed – “the right to assert a product-by-process claim against a defendant who does not practice the express limitations of the claim.”

Abbott Laboratories is a bright-line embrace of the fundamental rule of infringement that requires the presence of every claim limitation or its equivalent. Unquestionably, it will thwart product-by-process infringement claims except where the process itself is at issue. At the same time, it may lead to creative drafting of ever broader process claims.

More likely, however, this decision will lead patent attorneys back to drafting broader product and process claims. Indeed, Judge Rader implies as much when he notes in the decision that the Abbott attorneys failed to claim the very “Crystal B” product and process now used by Abbott’s competitors to produce generic equivalents. Abbott clearly hoped that  it had the protection of Scripps. Alas, times change.