Fresenius USA, Inc. v. Baxter Int'l, Inc.

In order for a final court decision to be sufficiently final that PTO claim cancellation will not remove the patentee's ability to maintain its lawsuit, there must be nothing left for the court to do but execute its judgment. Where damages are on appeal, the decision is not sufficiently final.

Opinion (Dyk): Fresenius USA ("Fresnius") filed a lawsuit seeking a declaratory judgment that its dialysis machine did not infringe three patents owned by Baxter International, Inc. ("Baxter"). Baxter counterclaimed for infringement. Fresenius stipulated to infringing the patents but argued the relevant claims were invalid. A jury found the claims invalid. Baxter filed a motion for judgment as a matter of law that Fresenius had presented insufficient evidence to support the jury verdict. The district court granted the motion, which was upheld on appeal. While the district court was determining damages, the Patent and Trademark Office issued a final decision in its reexamination of the patent claims at issue, finding them invalid. Baxter appealed, but the PTO’s determination was upheld and the PTO canceled the invalidated claims. While the damages calculation of the district court was on appeal, Fresenius argued that given the PTO’s final cancellation of the relevant patent claims, Baxter no longer had a cause of action. Under the Reexamination Statute, claims that are canceled by the PTO cannot support a lawsuit based on those claims. Where reexamination leads to the cancellation of patent claims before a final decision has issued in an infringement action, the patent owner can no longer maintain its suit. Baxter argued that the cancellation did not remove its cause of action because the infringement determination made by the courts was final before the claims were canceled. Although the Federal Circuit agreed that the decision was final for purposes of appeal, it held that for a decision to be sufficiently final such that the PTO’s cancellation of patent claims does not remove its cause of action, the decision must be such that there is nothing for the court to do but execute its judgment. Where a patent is found valid by a court, but the damages phase has yet to reach final decision, the judgment is not final and invalidation by the PTO can still remove a patentee’s cause of action.