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December 2019: Quinn Emanuel Scores Another Victory for Olaplex in the Federal Circuit

December 2019

On behalf of the California-based startup Olaplex, which invented novel products and processes for strengthening and repairing hair during bleaching treatments, Quinn Emanuel convinced the Federal Circuit recently to vacate and remand a Patent Trial and Appeal Board (“PTAB”) decision that had invalidated one of Olaplex’s crucial patents (the ’419 Patent).

            Olaplex invented and patented a process that uses maleic acid during hair bleaching treatments to protect and repair the damage that bleaching causes to hair.  Industry giant L’Oréal approached Olaplex, purportedly to inquire about acquiring Olaplex.  Under protection of a non-disclosure agreement, Olaplex provided L’Oréal a copy of a then-unpublished patent application concerning the maleic acid process.  About a year later, L’Oréal introduced to the market its own suite of products and processes using maleic acid.  Olaplex sued L’Oréal in federal district court for patent infringement and other claims, and with Quinn Emanuel won a substantial jury verdict in a recently concluded trial in August 2019.

            Before that federal court trial, L’Oréal had petitioned the PTAB seeking invalidation of Olaplex’s ’419 Patent on the maleic acid process as obvious in light of the prior art.  The PTAB ultimately agreed with L’Oréal that the patent was invalid.  Part of the PTAB’s decision addressed the objective evidence of non-obviousness known as copying; the idea being that, if the patent challenger or others copied from the patent rather than using the prior art, this is strong circumstantial evidence that the prior art did not make the invention obvious (because, if it did, there would have been no need to copy).  Although the PTAB found as a matter of fact that L’Oréal had copied from Olaplex’s then-unpublished patent rather than developed the process independently, the PTAB ruled as a matter of law that copying matters only when the thing copied is a patented product as opposed to the patent itself.

            QE’s challenge on appeal was to navigate through numerous Federal Circuit precedents to show that the PTAB had taken out of context a quote from the Circuit’s decision in Iron Grip Barbell Co., Inc. v. USA Sports, Inc., 392 F.3d 1317 (Fed. Cir. 2004)​.  We did so by explaining that what really drove that decision was the Circuit’s concern that copying doctrine should not be so broad as to assume that copying has occurred whenever the product/process of a competitor of the patent owner bears close similarities to the challenged patent.  We emphasized that we had much more here, thereby alleviating that concern:  (1) L’Oréal had gained access to a copy of an unpublished patent application to which, unlike a published patent, very few in the world had access; and (2) there was evidence that L’Oréal’s research changed course to focus on maleic acid shortly after it obtained the unpublished application.

            In a unanimous decision authored by Judge Reyna, the Federal Circuit agreed with Quinn Emanuel and Olaplex and vacated the PTAB’s decision, remanding for the PTAB to weigh this important evidence of copying in determining whether the ’419 Patent is obvious.