There Won't Be Blood • 2011 11 17 hematologyDid you miss me? This week I’ll be catching up on a few cases from October. First up, we have a story of a blood feud.

Streck, Inc. v. Research & Diagnostic Systems, Inc., No. 2011–1045 (Fed. Cir. Oct. 20, 2011) (Judges Newman, O’Malley, and Reyna)

We’ve written about interferences a few times. This opinion is about how to handle an interference action in the district court.

Trying to Gain Control

In this case, the parties argued about which one was the first to invent a control used by hematology (blood analysis) machines.

In order to check the accuracy of a hematology machine, you need a control that you can run through it and verify that it gives the expected test result. The control is stabilized so that it can be reused.

It used to be that machines couldn’t compute white cell counts and reticulocyte (immature red blood cells) counts at the same time, because the reticulocytes interfered with counting the white blood cells. In the mid–1990s, instruments that could measure both with a single blood sample were being developed, which meant that they would need an integrated control. The issue here is who invented a control first.

Flagged for Interference

The sequence of events in this case is kind of interesting. Streck sued R&D for patent infringement. At the same time, the USPTO declared an interference between Streck’s patent and a pending application of R&D. A jury found that R&D infringed Streck’s patent and also found that R&D hadn’t proven that it invented the control first.

Less than two weeks after the verdict, the Board of Patent Appeals and Interferences (BPAI) issued its decision in the interference, finding for R&D. Streck appealed the Board’s decision to the same district court where it had sued R&D. (You can appeal decisions in an interference to either the Federal Circuit directly or to a district court first under 35 U.S.C. § 146.) The district court disagreed with the Board, however, finding that Streck was actually the first inventor.

Can I Get a Witness?

Why the different result? Well, the district court heard testimony from live witnesses, while the BPAI just considers written submissions and legal arguments made at hearings. There were also some documents given to the BPAI with redactions, but the district court looked at the unredacted versions. And that live testimony and extra evidence apparently made the difference.

R&D argued that the district court had gone too far, and it should have just reviewed the Board’s findings to see if they were supported by substantial evidence. The Federal Circuit disagreed.

The Federal Circuit recently held in Hyatt v. Kappos, 625 F.3d 1320 (Fed. Cir. 2010), that in actions under 35 U.S.C. § 145 (which are appeals to the district court of decisions by the BPAI on patentability) you can introduce new evidence. (That decision is being reviewed by the Supreme Court this term.) The court said that, similarly, you can introduce new evidence in actions under Section 146.

You Gotta Count for It to Count

The court also agreed with Streck that its employees were the first inventors. R&D claimed that its employee, Dr. Johnson, was the first one to actually create the control. He did create a sample first. The problem is that he didn’t test it to make sure that it produced accurate counts, which is the purpose of the control. The court held that in order to be a reduction to practice (that is, making the invention), you have to be able to show that the thing you made worked for its intended purpose. R&D couldn’t prove that Johnson’s sample could be used to verify the accuracy of a hematology machine, so it wasn’t a reduction to practice.

Did the court demand too much from R&D? Read the opinion and tell me what you think.