Bifurcated Patent Trials, Expected Delays, and Press Statements
Petersburg, Virginia-based Star Scientific, whose published corporate mission is to “reduce toxins in tobacco so that adult consumers can have access to products that expose them to sharply reduced toxin levels,” sued R.J. Reynolds for patent infringement in the District Court for the District of Maryland in 2001. A bench trial on the issue of the enforceability of the asserted patents was held in 2005. Apparently put off by what it viewed as an excess delay in receiving the District Court’s decision, Star petitioned the Court of Appeals for the Federal Circuit (CAFC) seeking a writ of mandamus from the court that would order the Maryland District Court to issue its decision regarding unenforceability within 30 days. Star's petition was filed before June 7, 2007, which is the date the Maryland District Court issued an order stating that its decision would be posted on June 29, 2007. Defendants/respondents R.J. Reynolds Tobacco Company (a North Carolina corporation) and R.J. Reynolds Tobacco Company (a New Jersey corporation) opposed Star’s petition.
In an Order signed June 25, 2007, Federal Circuit Court Judge Pauline Newman denied Star’s petition, stating that the company had not “met its burden in this case,” which, for a writ of mandamus, required Star to establish that there had been a “clear abuse of discretion or that the District Court has ‘obstinately refuse[d]’ to adjudicate the matter” (citing Will v. Calvert Fire Ins. Co., 437 U.S. 655, 666-67 (1978)).
Ironically, the same day the Federal Circuit issued its Order denying Star’s petition, the Maryland District Court issued its decision on enforceability, effectively mooting Star’s petition to the CAFC. The District Court found Star’s patents to be unenforceable on the basis of inequitable conduct by Star’s attorneys during prosecution of Star’s patents before the U.S. Patent & Trademark Office. Star responded forcefully to the decision. In a June 27, 2007, press statement, it stated:
“The company is disappointed and frankly outraged by the U.S. District Court's ruling yesterday…. The Court's conclusion that highly respected and experienced senior attorneys at four national law firms were involved in an alleged plot to deceive the Patent Office is stunning and totally without support in the record. The opinion ignores significant portions of the record, distorts others, and spins a tale that is unrecognizable to those who attended the trial. … We welcome the opportunity to present the record in this case to objective decision-makers on the Federal Circuit.”
Comments and Notes:
- Star’s frustration over a two-year delay in receiving a decision regarding enforceability of its patents is understandable. However, bifurcated trials nearly always take longer to reach finality.
- It remains to be seen what effect Star’s press statement will have on its case-in-chief if the Federal Circuit remands the case back to the same Judge whose decision, in Star's view, ignored portions of the record, distorted portion of the record, and spun an unrecognizable tale.
- This case underscores one of the many pre-filing decisions Plaintiffs must evaluate before bringing a lawsuit: the speed with which a court adjudicates patent matters.
There was nothing about the bifurcation of the case that justified a delay of more than two years to then produce a "decision" that included fundamental errors in what had been, clearly at trial, the judge's understanding of the science involved, and which seemed entirely based on a concocted, fictional "remembrance" of the facts in the case and the otherwise-record of the trial.
It turned out that Star's view, as you put it, that the Garbis court's decision in the matter, after more than two years to think about it, "... ignored portions of the record, distorted portion of the record, and spun an unrecognizable tale", was apparently mirrored by the appeals court decision (and by their apparent incredulity at the Garbis court's decision, as seemed clearly expressed by the appellate judges during the oral presentations by the attorneys for both sides). One would hope that that, and the complete overturning of the whole matter on appeal (and subsequent refusal to hear the case by the SC), would "iron out the kinks" in the Garbis court and lead to close attention to fact and law this time.
As to pre-filing decisions, actually things were progressing very nicely and smoothly in this case until fall 2004, when, about three months before trial was tentatively scheduled, suddenly the case was, for reasons no one has ever explained to my knowledge, reassigned from Judge Alexander Williams to Garbis. From that moment on, the whole affair has been like a plane crash (much worse than a train wreck).
Perhaps you could shed some light as to how and why that happened? No one else has that I know of.
The only things "accomplished" by the subsequent ... and to my mind inexplicable and inexcusable 2+ year delay (to then produce a poorly written, factually flawed, "novelistic" accounting of the facts in the case) ... are the facts that (1) RAI/RJR has found friendlier law enacted in 2007 by the SC (which I presume had been anticipated for some time) under which to request reexamination of the patents in question (filed 12/28/2008) ... and Philip Morris has likely saved (assuming the patents had been upheld at the once-scheduled trial in 2005) about (my guess) $200M per year as the next likely defendant re the Star IP. Due to the delay, the 6 year statute of limitations lops off a year of possible royalties from them, the bigger fish in the pond, with each passing year of delay beyond 2006 or so.
Oh, and yes, tiny Star Scientific, unexpectedly, still hangs on ... barely ... by a thread.
This IP may not represent an "Einsteinian" moment, but Jonnie Williams was the first person, clearly, to "put it all together" to detail precisely what steps ... ALL the steps ... to take to cure tobacco so that the resulting product has virtually none of what are believed to be the most potent carcinogens in the cured product. It is unfortunate that the patents were not better written (so as to make defense of them less arduous), but tobacco curing is an art much more than a science, and an art is often hard to put into words (there was a glaring error in one numerical specification, too, fostering the "best mode" challenge on one group of claims).
In return for this discovery, Williams/Star asked only a 1% cut of the cost of the products (national average, about, over the ensuing years) as royalties ... to revolutionize the industry's products, almost certainly making smoked products much safer, and making, as already proved by epidemiology, smokeless products that carry no risk of cancer or other serious consequence at all. Plus, the cancer hazard of second hand smoke would have been likely greatly reduced.
Instead, like the piranha they seem to seek to emulate (in all matters), the industry has apparently colluded** to try to "neutralize Star", and has (again) disregarded completely any concern for the safety of their customers by using a process that, instead of removing the offending chemicals ("TSNAs") virtually completely, does so only to an extent, because of the industry's attempt at trying to walk the top rail of the "infringement fence" for the last 8 years. Likely hundreds or thousands (smokers and "second handers") will die of smoking-related cancers acquired from those 8 (and still counting) years of additional, UNNECESSARY exposure to TSNAs in tobacco smoke (albeit at a reduced level from that prior to 2001) ... all for the sake of not rewarding the person who put it all together, so as to save about 1% of "the bottom line."
** Witness the reversal of stance of once-friendly (to Star) B&W, which started out working with Star on new products using StarCure technology, and paying the royalties to Star in 1999. B&W then suddenly "decided" to merge with, of all things, its decades-long rival, RJR (forming RAI) and to fight Star, ditching the "safer" cigarette and smokeless products it had spent years jointly developing with Star (and thus doing Star much damage, as that investment in time and $$$ and publicity was scuttled). There are many other undercurrents afoot here, too. It appears that the industry feared having to compete with each other on the issue of product safety. Yes, all appearances are that the industry, completely ignoring any real consideration of its customers, formed another loose, anticompetitive coalition to fight the trend toward eliminating the (likely) deadliest chemical components in their products ... so as to pose what they perceived was less threat to their bottom lines. I can only hope that, if and when this whole story reaches the public eye, it leads to another huge round of liability cases against them. However, that seems safe for now: I and a few others have been writing about this incredible tale for years now ... and NO ONE EVER pays any attention. My only connection, by the way, is as an investor in Star, and as a close follower of this tale ... of greed and decadence and (more) utter disregard for the public safety ... for 11 years.